Casino revenue in Macau, the world’slargest gambling hub, rose 35 percent in January, beatinganalyst estimates as Chinese tourists spent more during theLunar New Year holiday. Chinese gamblers have fueled growth in the formerPortuguese colony, where gambling sales have more than tripledin the past four years. But this spending bonanza is widely believed to be another way to get money out of China, evading the legal limit on cash taken out of the country (US$3,100).
According to FT, capital flight out of China has been part of the landscape for many years:
That money comes from a mix of party officials, the lucky executives of state-owned enterprises that have listed and newly wealthy entrepreneurs. But in times of political transition the flows outside China become ever more intense.
And some more on the “shady” money …
The money that flows out is the … money that is not looking for the highest returns but the safest haven. Those flows reflect the insecurity of the wealthy. While some of their money is legitimate, some of it is not. Very few entrepreneurs will reveal where and how they got their seed capital, keeping the beginnings of their corporate empires shrouded in mystery.
… rising discontent … because of the sense that the money washing across China and into the region and across the pacific is mostly ill-gotten. As sentiment about the renminbi grows more pessimistic, more money might leave China.
Forex traders reversing their bets….
Citing these factors, many of the smartest foreign exchange traders have reversed their bet on the swift appreciation of the Chinese currency. In December, renminbi deposits in Hong Kong dropped 6 per cent from November, the largest fall ever, reflecting broadened capital flows and more balanced current account dealings.
Having said that, here is a “take the money and run” video showing the volume of the corrupt money leaving the country…