China takes steps to check capital flight

China’s foreign exchange regulator said on Wednesday that risks from cross-border capital flows will be generally under control in 2017, a day after the country reported that its forex reserves had fallen to near six-year lows. 
Chinese authorities have taken a raft of steps in recent months to curb capital flight from the country to support its weakening yuan currency, while trying to bring in more foreign investment.
The crackdown may have slowed outflows in January, but China’s forex reserves unexpectedly fell below the closely watched $3 trillion level, sowing doubts over how much longer authorities can afford to defend both the currency and its reserves.
“International payments will remain basically balanced and risks from cross-border capital flows are generally controllable,” the State Administration of Foreign Exchange (SAFE) said in a statement.
The regulator also said that China’s capital and financial account deficit would narrow somewhat this year, while it will maintain a current account surplus.
Policies to attract Taiwanese
China says it is drafting policies to attract Taiwanese to live and work on the mainland, amid a deepening political standoff between the sides.
The Cabinet’s Taiwan Affairs Office said Wednesday that residents of the self-governing island democracy would be offered incentives in employment, education and government benefits.
Spokesman An Fengshan said the measures aim to boost “economic and social integration between the sides.”
Beijing froze diplomatic contacts with Taiwan in June over Taiwanese President Tsai Ing-wen’s refusal to endorse the concept of a single Chinese nation.

New Silk Road summit
China has invited British Prime Minister Theresa May to attend a major summit in May on its “One Belt, One Road” initiative to build a new Silk Road, diplomatic sources told Reuters, as London said she would visit China this year.
“One Belt, One Road” is Chinese President Xi Jinping’s landmark program to invest billions of dollars in infrastructure projects including railways, ports and power grids across Asia, Africa and Europe.
China has dedicated $40 billion to a Silk Road Fund and the idea was the driving force behind the establishment of the $50 billion China-backed Asian Infrastructure Investment Bank (AIIB).
The country’s top diplomat, State Councilor Yang Jiechi, told the official China Daily last week that leaders from about 20 countries have confirmed their participation, representing Asia, Europe, Africa and Latin America, though he did not give names. 
Speaking in London, May’s aides confirmed she would visit China this year to discuss trade ties, the latest in a series of foreign trips to cement relations with major powers as she negotiates Britain’s divorce from the EU.
May’s aides gave few details about the trip, but she is keen to strengthen her hand by securing foreign support before launching Brexit talks, which are set to be among the most complicated Britain has ever undertaken.

Source: Arab News