China's reliance on foreign-exchange reserves and capital controls cannot be maintained for more than a few quarters before it runs the risk of hurting the country's economy, according to Autonomous Research's renowned analyst Charlene Chu. She says that China's focus on outflows could have a negative impact not only on business, but also in average Chinese households. "The government is trying to keep its currency from appreciating too much," she says.
China's reliance on foreign-exchange reserves and capital controls cannot be maintained for more than a few quarters before it runs the risk of hurting the country's economy, according to Autonomous Research's renowned analyst Charlene Chu. She says that China's focus on outflows could have a negative impact not only on business, but also in average Chinese households. Chu also warned of the consequences of entering a trade war with the US, and says measures such as levying taxes and onerous investigations will do more harm than good.