The quarter-trillion dollar rush to get money out of China

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Subscribe to enjoy similar stories. Chinese residents have been illicitly moving billions of dollars out of the country under authorities’ noses as a cratering property market and economic uncertainties push people to find safer places to park their wealth overseas. Moving fortunes out of China is hard: The country imposes strict capital controls that cap individual purchases of foreign exchange at $50,000 a year.

Violators can receive big fines, or even prison sentences, if they break the law. Nevertheless, the stampede for the exit in the past few years appears to dwarf the outflows that occurred in 2015 and 2016, when an earlier property downturn propelled what at the time was the biggest episode of capital flight from China, in dollar terms, according to economists and a Wall Street Journal data analysis. The Journal’s tally suggests as much as $254 billion might have left China illicitly in the four quarters through the end of June.

That is a larger sum than fled the country almost a decade ago, when outflows raised fears of a possible financial crisis. However, estimates of such outflows are inherently imprecise and overall capital flight appears to be smaller today as a share of China’s overall economy, which is now much larger. Some of the missing money likely includes export earnings stashed overseas instead of being brought back to China in order to take advantage of higher deposit rates and investment opportunities abroad.