China Changes To Regulations

NEW -> Contingent Buyer Assistance Program
I've been here in China for quite some time now and it's only getting worse day by day to get your money out.

There are still some good ways to get it out but the easy/legal ways are long gone.

Until they stop all methods though, it will continue to flow. Just at a lesser pace.

By the way, this topic shouldn't be in Irvine RE.
 
More they restrict the money outflow, more people want to take the money out and a estimated $710 billion was taken out in 2016 alone. 

I have a feeling the yuan is going to collapse. 
http://www.reuters.com/article/uk-china-economy-forex-reserves-idUSKBN14R02Z

China's foreign exchange reserves fell to near six-year lows in December, but held just above the critical $3 trillion level (2.44 trillion pounds), as authorities stepped in to support the weakening yuan ahead of U.S. President-elect Donald Trump's inauguration.

China's reserves shrank by $41 billion in December, slightly less than feared but the sixth straight month of declines, data showed on Saturday, after a week in which Beijing moved aggressively to punish those betting against the currency and make it harder for money to get out of the country.

For the year as a whole, China's reserves fell nearly $320 billion to $3.011 trillion, on top of a record drop of $513 billion in 2015

Adding to the pressure, Trump has vowed to label China a currency manipulator on his first day in office, and has threatened to slap huge tariffs on imports of Chinese goods.

That has left Chinese eager to get money out of the country, creating what some researchers describe as a potentially destructive negative feedback loop, where fears of further yuan falls spur outflows that pile fresh pressure on the currency.

"For 2016 as a whole we estimate total capital outflows to have been around $710 billion," Capital Economics' China economist Chang Liu told Reuters in an email.
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lnc said:
More they restrict the money outflow, more people want to take the money out and a estimated $710 billion was taken out in 2016 alone. 

I have a feeling the yuan is going to collapse. 
http://www.reuters.com/article/uk-china-economy-forex-reserves-idUSKBN14R02Z

China's foreign exchange reserves fell to near six-year lows in December, but held just above the critical $3 trillion level (2.44 trillion pounds), as authorities stepped in to support the weakening yuan ahead of U.S. President-elect Donald Trump's inauguration.

China's reserves shrank by $41 billion in December, slightly less than feared but the sixth straight month of declines, data showed on Saturday, after a week in which Beijing moved aggressively to punish those betting against the currency and make it harder for money to get out of the country.

For the year as a whole, China's reserves fell nearly $320 billion to $3.011 trillion, on top of a record drop of $513 billion in 2015

Adding to the pressure, Trump has vowed to label China a currency manipulator on his first day in office, and has threatened to slap huge tariffs on imports of Chinese goods.

That has left Chinese eager to get money out of the country, creating what some researchers describe as a potentially destructive negative feedback loop, where fears of further yuan falls spur outflows that pile fresh pressure on the currency.

"For 2016 as a whole we estimate total capital outflows to have been around $710 billion," Capital Economics' China economist Chang Liu told Reuters in an email.
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Is there any legal way to short the Yuan in the Fx market as a trader?
 
Lots of people have been betting against the Yuan for quite some time now. Not sure how to do it as a layman but the big boys have been at it.

Since it is government controlled, it will be volatile.
 
You have to short using the "offshore" yuan which is USD/CNH instead of CNY. The PBOC can totally dick with you though by making the borrowing costs extremely high to try to stop you out of your short. You have to have big reserves to do that trade.

I don't think we'll see a big overnight devaluation from China like some bears seem to think. It would send the message that they are at the mercy of markets just like the BOE when Soros broke the pound. They will use their reserves to defend the currency, they don't care about efficiency but efficacy in their goal to maintain stability.

They're already giving up their fixation on growth and beginning to tighten monetary policy. This year stability is very important because of the 19th Party Congress.
 
samleeiii said:
You have to short using the "offshore" yuan which is USD/CNH instead of CNY. The PBOC can totally dick with you though by making the borrowing costs extremely high to try to stop you out of your short. You have to have big reserves to do that trade.

I don't think we'll see a big overnight devaluation from China like some bears seem to think. It would send the message that they are at the mercy of markets just like the BOE when Soros broke the pound. They will use their reserves to defend the currency, they don't care about efficiency but efficacy in their goal to maintain stability.

They're already giving up their fixation on growth and beginning to tighten monetary policy. This year stability is very important because of the 19th Party Congress.
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This guy knows his china stuff. right on the money.
 
stephen said:
samleeiii said:
stephen said:
Why don't they just use BTC? Or perhaps they are and that is whats currently driving the price up.
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http://news.rthk.hk/rthk/en/component/k2/1307181-20170112.htm
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Thanks for that, haven't been keeping to up to date on Bitcoin in a while. I mined for fun with my gaming rig back in 2011, realllyyy wish I held onto what I had haha.
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You're welcome. Apparently the PBOC is really going after BTC now:https://www.bloomberg.com/news/arti...said-to-call-bitcoin-exchanges-for-more-talks

Bitcoin has had an incredible run, that kind of performance in such a short time frame is very rare. I only know of a few people who were able to recognize the potential immediately and speculate accordingly. I can imagine this is only the beginning of the story for bitcoin. India's demonetization experiment will likely get some legs in other parts of the world. You have some academics here talking about banning cash as well, and if the Fed wants to continue to try to inflate away our debt, bitcoin will get a bid I imagine.
 
B2FiNiTY said:
samleeiii said:
You have to short using the "offshore" yuan which is USD/CNH instead of CNY. The PBOC can totally dick with you though by making the borrowing costs extremely high to try to stop you out of your short. You have to have big reserves to do that trade.

I don't think we'll see a big overnight devaluation from China like some bears seem to think. It would send the message that they are at the mercy of markets just like the BOE when Soros broke the pound. They will use their reserves to defend the currency, they don't care about efficiency but efficacy in their goal to maintain stability.

They're already giving up their fixation on growth and beginning to tighten monetary policy. This year stability is very important because of the 19th Party Congress.
Click to expand...

This guy knows his china stuff. right on the money.
Click to expand...

Thanks! It's interesting to try to understand what's going on over there. I'm long term bullish on China. They have a far lower debt/GDP to the US, they haven't done quantitative easing like we have, and their short term rates are above 4%. Janet Yellen probably goes to sleep at night dreaming the US economy could handle a 4% fed fund rate. I love America but wow we sure messed up these last couple of decades.
 
I admire your positivity. I'm bullish on China as a whole in the long term also. Short term is quite hazy. Much like the smog here.

I felt the same way before until I started living and working here. Unfortunately from ground zero, there is a lot of shadow debts, fake gdp/debt numbers, and a plethora of other problems.

So far though, the house hasn't fallen and the gov is doing its job propping it up.

But you can clearly see there are some signs something has/is brewing. It has been most evident with the RMB devaluation, stock market stagnation, and continued rising real estate prices.

 
For sure the short term indicates pain and perhaps more on the way. My long view is probably 20-30 years. Although China will likely also suffer from a demographics problem similar to what developed countries are experiencing now. I think the difficulty in trying to assess China even in the short term is that nobody has a complete picture of how extensive the problems really are, particularly in the shadow banking and wealth management products that from what I've heard can be incredibly complicated. Since coming back from the holiday though it seems the PBOC is now going to try to tighten again, hopefully in earnest this time. We'll see what happens!
 
Also I think the real immediate risks and not just for China but the whole world are likely political. You have the developed world trying to inflate away their debt, China and Russia have been stockpiling stores of value and making land grabs. So everybody has lots and lots of debt but the methods for trying to manage it are impacting currency and trade, how does it gets resolved? I hope in a peaceful way.
 
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