Foreign companies face new restrictions on offshoring funds

Multinational companies are suddenly finding themselves in the crosshairs as China dials back its effort to turn the yuan into a global currency, alarmed that it has accelerated capital flight, according to The Wall Street Journal. In recent days, China’s foreign-exchange regulator has instructed banks to sharply limit how much money companies move out of the country and into their other operations around the world. Until this week, it was possible for big companies to “sweep” $50 million worth of yuan or dollars in or out of China with minimal documentation. According to sources, the cap is now the equivalent of $5 million, a pittance for the largest corporations. Beijing is fighting an increasingly vicious cycle of capital outflows that weaken the yuan.