Media reports billions of dollars ‘illegally’ smuggled out of China

(MENAFN) A newspaper has reported that billions of dollars have been "illegally" smuggled out of China, reflecting growing concerns over the country’s economic situation. According to the American newspaper, an estimated USD254 billion may have left China by the end of June this year, as individuals circumvented strict capital controls. This figure significantly exceeds the amount of money that left the country about a decade ago when fears of a financial crisis were prevalent.

The report highlights that China’s real estate market is deteriorating amid economic uncertainty, driving many to seek safer options for storing their wealth abroad. The country’s economy has been struggling since 2020 following the collapse of major construction companies, contributing to a property debt crisis and weakened consumer spending. Industrial activity has also contracted for five consecutive months as of September, deepening concerns.

China’s abandonment of its "zero-Covid" policy, which had been championed by President Xi Jinping, has led to an underwhelming economic recovery. In response, the government introduced a stimulus plan to revive growth. Despite these efforts, China posted one of its lowest growth rates in three decades, at 5.2 percent, far below its previous levels that had propelled it to become the world’s second-largest economy.

While Chinese authorities still project a growth rate of around 5 percent for the year, reaching that target seems increasingly unlikely due to ongoing economic challenges. The International Monetary Fund (IMF) predicts that China’s economic growth could slow further to about 3 percent by the end of the decade, reflecting long-term structural issues in the economy.

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