Agarwal et al. (2019) argue that just 10% of China’s bank deposits moving to buy foreign assets would mean USD 2 trillion of funds flowing to markets offshore. The history of capital account liberalisation, however, shows that freeing up household flows is the least predictable and hardest to control part of capital flows. As a result, such a move is usually one of the last changes in the process of capital account liberalisation.
