COMMERCIAL property developer Soho China said it scrapped a deal to sell its Shanghai commercial building because it would not be able to move the proceeds offshore due to China’s tightened capital controls.

    “Because of the country’s capital controls, money cannot go out ... Where can I invest the (renminbi) proceeds? I have nowhere to invest,” founder and chairman Pan Shiyi told an earnings conference Thursday.

    “Although the rental yield is a bit low, under the asset crush holding a property inside China is better than holding renminbi inside China.”

    China’s tighter grip on funds moving out of the country after the yuan plummeted to more than eight-year lows has hurt some Chinese companies’ overseas expansion plans and created extra challenges for firms or deals reliant on mainland investment.

    Dalian Wanda Group’s offer to buy Dick Clark Productions Inc. for US$1 billion also collapsed last month over problems getting currency out of China.

    (SD-Agencies)