Why more Chinese tourism means more capital flight

Arailway tour of Laos, a trip to the far corner of Russia to see the Northern Lights, or a polar cruise in the Arctic. These are some of the adventurous options being marketed in China as the country reopens. The urge to travel seems strong: Ctrip, a travel agent, has reported a quadrupling of inquiries in the space of a month; students are searching more for study-abroad opportunities, too. In Macau, a gambling centre, two of the fanciest hotels are fully booked this month. If pre-pandemic patterns reassert themselves, China’s travel spending could increase by $160bn this year, according to Natixis, a bank.After three years of covid-19 restrictions, this wanderlust is understandable. But alongside the obvious motives—sun, sea, sand and study—is another unstated one: spiriting money out of the country. Capital controls limit the foreign currency Chinese citizens can buy. The movement of people across borders creates cover for the movement of money. In 2017, for example, China’s authorities reported how an individual from Tianjin got hold of 39 bank cards and withdrew more than C$2.4m ($1.8m) “in the name of studying abroad”.