And the Chinese seem to want to move money out of China in phenomenal amounts. Global Financial Integrity, an organisation with whom I have worked, estimate that more than $100 billion has left China each year for more than a decade now – making it the biggest source of illicit financial flows in the world. In that same period about $60 billion also returned illicitly annually to China via Hong Kong according to GFI. In other words, this money ’round trips’ out of and back into China where it is then used for speculative purposes – in no small part to fuel the Chinese house price boom. The rest, of course, ends up invested in ‘off plan’ housing investment in London.
People want to move their money out of a place that does not have the rule of law, a place that is a Curajus State, and into somewhere that does have the rule of law.
Then, once protected by said rule of law they’re quite happy to invest back in the most boomingest economy on the planet.
It’s just such a remarkable finding, isn’t it? You’d almost think that economists have never noted the propensity of human beings to loss aversion.