There’s a story making the rounds of Chinese startup investors in Beijing and San Francisco. A Chinese firm wanted to invest a few million dollars in an overseas venture. To avoid tougher new regulations on taking money offshore, the firm’s principal sliced up the money and had 30 employees wire tranches of $50,000 each to a foreign bank account. Regulators uncovered his illegal plot and the would-be investor was sentenced to nine months in jail.
The tale might be apocryphal but the underlying truth is real. It’s getting really hard to take money out of China. I predict some of that money will start chasing Chinese assets, driving up valuations in everything from stock markets to startups.