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China FX capital controls

Discussion in 'General Property Chat' started by Dean Collins, 4th Jan, 2017.

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  1. Dean Collins

    Dean Collins Well-Known Member

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    Anyone have any more info about this?
    - China Gets Strict on Forex Transactions to Stop Money Exiting Abroad

    Would be great to get some local Chinese news sites with google translations on what people are saying about their decisions.

    Will this finally mark the top of Chinese investment in Sydney and Canada?
    Is this a "bluff" or is it a marked change in govt policies and we'll see the end of Chinese smurfing?
    Anyone have any insights if its just a January 1st issue or if this will last (/and be enforced) the whole year?

    I'm not too concerned about my Sydney property investments as the actual newly built chinese property purchases versus the overall market is fairly insignificant, however I have more exposure than most because of my investment in Australian Property Bank so feel free to contact offlist via PM if you have any insights.

    Cheers,
    Dean Collins
     
  2. highlighter

    highlighter Well-Known Member

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    I doubt it's a bluff, China has been cracking down with increasing veracity for a year. Whether it will work is the question. It may affect Australia more than Canada as it will require more non-resident investors to seek onshore finance, and Aussie banks are reluctant (or unwilling) to lend to foreign investors. If it does have an effect it's most likely to hit the apartment market.
     
  3. willair

    willair Well-Known Member Premium Member

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    They have been doing that for a while now plus selling off in the bonds US markets and it's going to be a busy calendar for China once Mr-Trump brings in professional energy and expertise into the money markets..
     
  4. tc8

    tc8 Active Member

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    I work in the finance industry and I can tell you it's not a bluff.

    To remit money out from China, a Chinese individual (or company) needs to exchange the local currency (Yuan) to a foreign currency. This is monitored by the local exchange authorities namely SAFE.

    In the past, a deal to acquire a foreign investment can be made without SAFE intervenance. Simply showing the relevant contract to SAFE and they will let you off. Nowadays even with a valid sales and purchase agreement and other supporting documents, the SAFE would not approve the outward remittance payment which makes foreign outbound acquisition extremely difficult. This applies to acquisition of property and companies.
     
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  5. JDP1

    JDP1 Well-Known Member

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    Yrs, this is not new but maybe some of the controls and processes are.
    No doubt it's tougher yo get money out of China.
    Have said before, Sydney and Mel won the Chinese lottery a few years ago...will not see that level of Chinese funds into any Australian real estate market for a while.
     
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  6. melbournian

    melbournian Well-Known Member

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    A lot of discussion about China (Mainland China).

    what about the rest of asia and people should realise there are Chinese in Indonesia, Malaysia, Singapore, Taiwan. Throw in combos of Indians (Malaysia, Singapore, india etc). Firms like UEM sunrise, SP Setia Group buying up super big in Melbourne. Singapore (Far East Corporations) they not buying millions they buying 100 millions.

    My personal friend Indian (10-15 million in 1 year) buying up property in Melbourne (and religiously flies airasia)

    The rise of the Indians changed the suburbs in Western Sydney and the likes of west in point cook and tarneit as well.

    Even the springfield suburb or town (in Queensland) is from a Malaysian migrant developer. Smart move on his part trying to get in 2 Chinese universities into springfield (something Brisbane is seriously lacking - university twinning matriculation programs) - which has been around since the 90s in Melbourne and Sydney.
     
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  7. sash

    sash Well-Known Member

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    Yep....agree....people forget the Indian subcontinent wealth....lots are already residents of Australia but also some from overseas.

    They don't flash wealth as much....but a lot with 10-30m in wealth....the ones with over $100m play in the US and UK markets.
     
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  8. melbournian

    melbournian Well-Known Member

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    yup, patels in the US hotels etc, different breed (work 2-3 jobs to pay off as much of their loans)

    The Indians were the ones that took pt cook, tarneit , hoppers surroundings from what was mid 300kish to 500Kish not the Chinese. The Chinese + Non-Mainland Chinese took the prime suburbs (like balwyn and glen Waverley).

    Access routes, the owner of Airasia is not a fool (someone who is part owner of English Premier League, US soccer club, Formula One ) he can afford to go to any city to land his planes if there is demand. He connects all the smaller cities of india, china to Australia through his airline. All my recent indian tenants are not from dehli or Bombay but smaller cities.
     
  9. Ted Varrick

    Ted Varrick Well-Known Member

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    Probably means there is a better than even chance that Bitcoin will go through the roof... (assuming it hasn't already...)
     
  10. Dean Collins

    Dean Collins Well-Known Member

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    Ted,
    Yes Bitcoin is going up.....but I don't get why you think it matters eg yes it might help you get your money out of the country but you still need a counterparty who wants to accept yuan for bitcoin.....
     
  11. Ted Varrick

    Ted Varrick Well-Known Member

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    Hi Dean,
    It's not controlled by any govt, so if you REALLY want get some money out of the country prior to a currency devaluation (and I have no idea if this will happen or not, but i suppose the risk is heightened...) anything going up looks good... and there doesnt seem to be any info on Bitcoin sellers not accepting Chinese counterparties...
     
  12. Hwangers

    Hwangers Well-Known Member

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    agree that Indians work extremely hard - wonder how long it will be before an Indian/subcontinental developer makes the headlines as opposed to a Chinese/of Chinese descent
     
  13. CK_Invest

    CK_Invest Well-Known Member

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    no impact whatsoever, the chinese can take a flight to hong kong and buy 'insurance' using their mastercard/visa card with multiple swipes (cant do unionpay anymore)

    'forfeit' the policy for x% of premium and do what they like with their money
     
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  14. Dean Collins

    Dean Collins Well-Known Member

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    Isnt mastercard/visa going to need to get paid in something other than Yuan? Wondering how long this will be allowed etc?
    what would be the X forfeit percentage? Isnt someone really going to give up this much to get their money out?
     
  15. CK_Invest

    CK_Invest Well-Known Member

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    they get paid in yuan and do the FX conversion from their side, just like when you use your CC for a holiday overseas

    believe it's a few percent, am not sure on the specifics but it's a widely known way to escape capital controls.

    besides forfeiting they could put it into some defined benefit invested in a capital guarantee fund and then remit the proceeds into a newly set up HKD bank account once the cover expires

    other methods:

    1. take out cash and carry across the border from shenzhen (I know someone personally who carried $3m yuan across the border over a period of 2 weeks)
    2. underground banking companies (deposit yuan to a 'bank' in china which will issue you a HKD cheque for you to cash out in Hong Kong)
    3. bitcoins (highly volatile price though - most of transactions for bitcoin are done from china now I believe)

    there's plenty of methods if one was really willing

    for those who follow the hong kong property markets, one of the mainland conglomerates (HNA group) recently paid a 30% premium for land in hong kong causing a huge controversy (and subsequently the government came out with a cooling measure for 15% stamp duty)

    it was a cleverly disguised way of companies getting their money out of China

    Hong Kong property experts ‘shocked’ at record sale result for Kai Tak area site
     
    Last edited: 16th Jan, 2017
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  16. tc8

    tc8 Active Member

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  17. tc8

    tc8 Active Member

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