Chinese media have reported that authorities have ordered UnionPay and other credit card services to limit cash withdrawals for visitors to the gambling enclave Macau in a bid to stem capital flight from mainland China.
From Saturday, UnionPay cardholders would only be able to get 5,000 patacas (around $600, 591 euros) each time they go to automated teller machines (ATMs), the Monetary Authority of Macao announced Friday, in a move that was aimed to "further strengthen the measures to regulate Mainland bank card cash withdrawals."
A South China Morning Post report on Thursday said the limit would actually apply to total daily withdrawals, meaning that Macao visitors from mainland China would have seen their daily cap for UnionPay withdrawals reduced by half.
UnionPay issued a statement Friday, saying it had not changed its policy on overseas cash withdrawals using cards issued on the mainland, adding the daily limit was still 10,000 yuan ($1,450) per day with an annual cap of 100,000 yuan. It added, however, that it complied with regulations and laws issued by relevant authorities.
About half of all Chinese visitors to Macau use UnionPay for cash even though ATM withdrawals are not a major source of finance for most Chinese gamblers, especially its high rollers. Many normal players use UnionPay to buy goods, which they then return to get a cash refund that they use for gamble.
Despite their incremental nature, the changes appear to be an attempt by Chinese authorities to stem a growing tide of capital flowing out of China as locals seek to escape a falling yuan.
According to Bloomberg News, capital flight is estimated to have reached $1 trillion in 2015 and has continued during 2016, despite recent efforts by Beijing to tighten restrictions on currency flows.
China has the world's largest foreign exchange reserves, totaling $3.05 trillion in November but depleting rapidly as Beijing is trying to shore up its weakening national currency.
The Chinese State Administration of Foreign Exchange (SAFE) has been vetting transfers abroad worth $5 million or more, and has increased scrutiny of big outbound deals, even those with prior approval.
Although analysts dismissed Friday's action by Macau's authorities as limited, they warned that the broader worry of china stepping up measures persisted.
"The risks of more capital outflow control measures should not be ignored," said Chelsey Tam, analyst at Morningstar, noting this could limit a recovery in gaming revenues next year.
And Francis Lun of Hong Kong-based GEO Securities said the move was intended to make cash withdrawals less convenient. "It makes it more difficult for people to send money out of the country. They hope they can reduce the spending of Chinese overseas by limiting the amount they can take out at one time, so they have to do it more than once. They're putting in more roadblocks," he told the news agency AFP.
uhe/jd (Reuters, AFP)