China has imposed a cap on purchases of insurance products in Hong Kong through UnionPay credit and debit cards in an effort to prevent capital outflow from the country.
Under the new move, payments of insurance premiums in Hong Kong by UnionPay cards issued in China have been capped to $5,000 per transaction.
However, no daily cap has been set for the total number of UnionPay transactions.
The latest move comes in the wake of China’s concerns to stem capital outflow after the value of the yuan dropped in comparison to the dollar in recent months.
In order to tighten rules regarding use of credit card overseas, regulators in China have also set a new annual withdrawal limit of RMB100,000 or about $15,200 on use of UnionPay cards overseas from 1 January.