Times are going to start getting tough in the world of money laundering, ladies and gentlemen. The word on the street is that Those in Command are determined to stem the flow of money out of China, and with estimating that capital flight came to more than US$600 billion in the first 10 months, you can see why they are getting worried. While stopping money from moving is easier said than done, they are going to be squeezing all the available channels. Over just the last few days, we have had an official and remarkably categorical announcement that the worldwide M&A spree of the past 15 years is over. Foreign companies have been told that the amount of profit made in the China market that they are allowed to repatriate to the head office has been slashed by 90%. And the black market bucket shops in Hong Kong that have been for years handling such huge flows of funds out of China are facing a drought like nothing seen before. The banks in Hong Kong which they use to deposit the funds being mirrored across the border have informed them that if a bank account receives a sum of money that is particularly large and from a source not already registered or known as a source of remittances, then the bank may well reject it, refuse to deposit it. All you need is for one of those failed payments to not get re-deposited in the sender bank account in China, and the market will just shut down.
But always remember that there is a special thing about money. It has a mind of its own, and a determination that will not, in the end, take no for an answer. If money wants to move, it will in the end find a way. And obstacles simply raise the determination of money to be free, yes, free! Cue in some swelling strings, and have a great weekend.