Raising the interest rate of the US FRS could lead to capital outflows from China, experts say

Almaty. December 21. Silkroadnews - The decision of the Federal Reserve System (FRS) to raise interest rates may lead to an increased risk of capital outflow from China. Such an opinion was expressed by Chinese experts, reported the newspaper "People's Daily".
Raising rates - is not an event but a process, and the likelihood of further rate hikes is quite high, according to a leading economist at Bank of Communications of China Lian Ping.
According to the director of China Institute of currency investments Tan Yaling, in the long term, the US Federal Reserve has two main objectives: modernization of the sectors of the economy and the resumption of the hegemony of the interest rate.
The Organization for Economic Cooperation and Development (OECD) predicts a steady growth of the US economy, which at the end of 2015 will be 2.5%. Raising interest rates will strengthen the dollar and increase the attractiveness of the United States to private investors.
Starting the process of rate hikes in the US could accelerate capital outflows from China, Chinese experts have warned.
According to Lian Ping, the capital outflow from China needs to be under control. He proposed to improve and accelerate the process of opening the capital and financial accounts and to create an appropriate supervisory mechanism.
With the inclusion of the Chinese yuan in the currency basket of Special Drawing Rights of the IMF, China is already possible to accelerate and deepen financial reform, he said. In his view, China should seize the opportunity and accelerate the reform of the financial sector and increase openness. The first is to improve the legal framework in the areas of trade and finance and to make the domestic financial market less vulnerable to shocks from the outside.
On December 16 the US Federal Reserve System for the first time in a decade raised interest rates to a historic low from 0-0.25% to 0.25-0.5%.