Reasons to Open a Chinese Bank Account
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Reasons to Open a Chinese Bank Account
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Re: Reasons to Open a Chinese Bank Account
#2Good rundown in article. We were discussing this last night in the freenode #startups IRC channel ;)
The rumor is that the $20K per year investment cap is limited only to individuals and not institutional investors and funds. Furthermore, if there is massive demand, it is expected that those caps will be raised.
What is unclear is how your yuan can be used to make investments in China itself?
Re: Reasons to Open a Chinese Bank Account
#3tl;dr version
It's very unlikely to go down.
It's very likely to go up.
You won't miss out on a lot of interest elsewhere, as nowhere else is paying a lot of interest.
It will diversify your portfolio.
And, finally, it may offer you and your family something of a hedge against the decline of the U.S. economy.
Re: Reasons to Open a Chinese Bank Account
#4A better investment (for most people) would be in a mutual fund or index that is tied to the Chinese economy.
Re: Reasons to Open a Chinese Bank Account
#5>Politically, the country is under international pressure to rein in its huge trade surplus.
The government doesn't feel any of this pressure, as it's not an internal issue they don't care.
I would argue that yes the yuan is likely to rise against the dollar, but because of high inflation (very very high in China) most assets would also rise in comparison to the dollar(Oil, Gold, Silver etc.)
Actually the only good reason to invest in the yuan I would think is diversification. It's not a good idea to keep your investments as cash during a time of high inflation.
In January 2006 Gold was $525, January 2010 it was $1125
Silver, January 2006 $9, 2010 $17, most assets are climbing fast in relation to cash, much faster than 25% over 5 years.
Re: Reasons to Open a Chinese Bank Account
#6tl;dr version It's very unlikely to go down. It's very likely to go up. You won't miss out on a lot of interest elsewhere, as nowhere else is paying a lot of interest. It will diversify your portfolio. And, finally, it may offer you and your family something of a hedge against the decline of the U.S. economy.
Ah yes, the holy trail of investments. This one, we swear, won't go down! Really, look at all the reasons. Just like housing. It's not like their banks have billions of yuan in loans to companies or government investment vehicles which large numbers of economists question the viability if.
Re: Reasons to Open a Chinese Bank Account
#7It's not a floating currency, it's directly controlled by politicians. Holding yaun is taking a speculative currency bet on the competency of the Chinese Communist Party to successfully manage the Chinese economy.
Re: Reasons to Open a Chinese Bank Account
#8[deleted]
Re: Reasons to Open a Chinese Bank Account
#9I am not an economist, but to me arguments 1,2 and therefore 5 seem specious. 3 and 4 hold water, but they are pretty self explanatory.
China's economy, to me, seems like a leverage play on the US. If the US economy seriously stagnates, China's economy will follow suit, and likely in a much more dramatic fashion. The opposite is also true, when the US consumers get to spending China (at least for now) stands to benefit tremendously.
For me, the best option if you are looking at foreign currencies, is to go buy a brazilian government bond and get 10% on your money in 3-5 years.
Re: Reasons to Open a Chinese Bank Account
#10It's not a floating currency, it's directly controlled by politicians. Holding yaun is taking a speculative currency bet on the competency of the Chinese Communist Party to successfully manage the Chinese economy.
Trust them to do everything they can to keep it growing. People are in China are only generally content with their government because every year everyone gets richer and richer, except the family five blocks down the road that had their house confiscated and compensated only 25% market price because the local council is planning to build a `public facility` on the land.