• Billionaire Mark Mobius says he can’t withdraw his money out of HSBC in Shanghai, China due to severe capital control.
• Mobius warns that the Chinese government is becoming more and more control-oriented in its economy.
• He advises caution when investing in China and suggests looking into Hong Kong instead.
Mark Mobius’s Money Troubles with HSBC
Billionaire Mark Mobius, founder of Mobius Capital Partners, revealed during an interview with Fox Business that he cannot take his money out of HSBC in Shanghai, China. Citing severe capital control by the Chinese government, he stressed: „It’s crazy … They’re putting all kinds of barriers.“
Capital Control Barriers
Mobius explained that while the bank does not explicitly deny him access to his funds, they require him to provide records from 20 years of how he made this money before allowing him any withdrawals. This is a significant problem for many investors in China due to increasing government restrictions on the flow of money out of the country.
Be Cautious When Investing In China
In light of these issues, Mobius advised caution when investing in China and suggested looking into Hong Kong instead. He also warned against the potential for the Chinese government to take „golden shares“ in companies all over China which could mean increased control over certain firms such as Tencent and Alibaba.
A Different Direction From Deng Xiaoping
Mobius noted that this situation marks a departure from reforms instituted by former leader Deng Xiaoping which opened up investment opportunities within China. The billionaire highlighted that current policies indicate a move towards greater governmental oversight and control which may have negative implications for investors moving forward.
Overall, it appears that there are significant challenges facing investors who choose to put their money into Chinese markets due to heavy capital controls imposed by the government as well as risk associated with increased ownership stakes taken by state entities. Those considering investments should be aware of these risks and proceed cautiously if choosing to invest within mainland China rather than looking at other options such as Hong Kong which may present fewer obstacles for withdrawals or transfers down the line.