With the massive trade surplus that China runs, why is it concerned about people taking currency out of the country? Is it purely a question of control of the population?
I'd say it has something to do with the policy placed when the country needed dollars in 70s and 80s, and no one is taking the risk of removing it. China doesn't want to free foreign exchange on Chinese Yuan, mainly because it has shielded its financial institutes from western hedgefunds attacks. The Chinese financial institutes are new, and not as sophisticated as the western counterparts, IMO, this has been something working well for China, and I would hope it can continue to serve this purpose.
Now that the credit tsunami looks to inexorablly ebb under its own weight, a looming population implosion, the party will have to prevent a collective cashing-out from the speculators they once rolled out the red carpet for. esp. in the form of offshore currency.
By trapping them in, to keep people from panic dumping.