Experts urge tighter scrutiny of cross-border capital flows

The country should strengthen scrutiny of cross-border capital flows and increase the flexibility of its monetary policy to offset any adverse effect from the drastic tax cuts by the United States, economists said on Monday.

The tax bill approved by the US Senate on Saturday will likely prompt US companies to repatriate profits back home and the tax measures will attract greater capital inflows into the country, which will in turn lift US asset prices and the value of the dollar.

One immediate impact on China could be rising pressure of capital outflows and the potential depreciation of the yuan, said Xu Hongcai, an economist at the China Center for International Economic Exchanges.