For every action there is a reaction. Or as we say in Chinese, above is policy, below is work-around.

New capital restrictions are allegedly being introduced from July 1, making cross-border money movements even tougher, and also no doubt increasing the determination of funds to find a way. New email restrictions are being introduced later this month that seem to amount to the creation of a "white list," so revenues for VPN operators will soar as a result. Schools that are in any way private, international or aiming to prepare students for studies elsewhere will be subject to new curriculum restrictions from September to provide a healthier cultural experience with stronger Chinese characteristics for students. Interest in sending kids to other countries for studies will probably increase as a result. Anecdotally, interest in migrating to somewhere else, amongst those for whom it is potentially a possibility, actually does seem to be increasing. It's the core anomaly in this system.  

Meanwhile, the train wreck that is the Trump administration continues on its way towards what appears to be an inevitable premature demise. The Comey Hearing was the highlight of the week, and he gave every indication that, as we postulated last week, he and Mueller understand the threat Trump poses to the US system and are working to get him out. Much of the Comey testimony set up points for Mueller to develop. It's going to be a vicious brawl, but our prediction is that the system will prevail, and that September will see a crunch point. But this emetic process is creating incalculable collateral damage along the way, domestically and internationally.

Tough times for optimists.