WITH $21 TRILLION SAVINGS INSIDE THE BANKS OF CHINA–THE ERA IS HERE IN THE NEXT 15 YEARS WHERE CHINA TO BECOME THE EXPORTER OF MONEY INVESTMENT TO THE WORLD TO RIVAL THE WORLD BANKS OF THE US, EUROPE, JAPAN

Few events will be as significant for the world in the next 15 years as China opening its capital borders, a shift that economists and regulators across the world are now starting to grapple with.

With China’s leadership aiming to scale back the role of investment in the domestic economy, the nation’s surfeit of savings -- deposits currently stand at $21 trillion -- will increasingly need to be deployed overseas. That’s also becoming easier, as Premier Li Keqiang relaxes capital-flow regulations.

The consequences ultimately could rival the transformation wrought by the Communist nation’s fusion with the global trading system, capped by its 2001 World Trade Organization entry. That stage saw goods made cheaper across the world, boosting the purchasing power of low-income families at the cost of hollowed-out industries.

Some changes are easy to envision: watch out for Mao Zedong’s visage on banknotes as the yuan makes its way into more corners of the globe. China’s giant banks will increasingly dot New York, London and Tokyo skylines, joining U.S., European and Japanese names. Property prices from California to Sydney to Southeast Asia already have seen the influence of Chinese buying.

Other shifts are tougher to gauge. International investors including pension funds, which have had limited entry to China to date, will pour in, clouding how big a net money exporter China will be. Deutsche Bank AG is among those foreseeing mass net outflows, which could go to fund large-scale infrastructure, or stoke asset prices by depressing long-term borrowing costs.

‘Historic Proportions’

“This era will be marked by China shifting from a large net importer of capital to one of the world’s largest exporters of capital,” Charles Li, chief executive officer of Hong Kong Exchanges & Clearing Ltd., the city’s stock market, wrote in a blog this month. Eventually, there will be “fund outflows of historic proportions, driven by China’s needs to deploy and diversify its national wealth to the global markets,” he wrote.

The continuing opening of China’s capital account will also promote the trading of commodities in yuan, and boost China’s ability to influence their prices, according to an analysis by Bloomberg Intelligence.

http://www.bloomberg.com/news/articles/2015-06-25/with-21-trillion-china-s-savers-are-set-to-change-the-world