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Reasons to Open a Chinese Bank Account

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Re: Reasons to Open a Chinese Bank Account

#71

Post by grok2 »

sorenbs wrote: post #32
grok2 wrote: post #21

I don't understand this...are they giving you a better interest rate? Aren't they simply operating as a US bank (if they are FDIC insured). You really aren't investing in the Yuan...

see http://www.bocusa.com/portal/Info?id=649&lang=1&#38 ; Can I buy and sell RMB from/to your bank? Yes, you can exchange USD for RMB or exchange RMB for USD at our bank.

Thanks for the link. Didn't realise that they are allowing you to buy the Yuan and the account is actually in Yuan (though you deposit in USD -- conversion at the time of deposit).

Re: Reasons to Open a Chinese Bank Account

#72

Post by quanticle »

EliRivers wrote: post #51
maukdaddy wrote: post #12

Much like the tech bubble and housing bubble, by the time you read these articles in the mainstream press, it is FAR too late to invest. You've already missed 10-15 years of explosive growth in the Chinese economy.

Simply not true. Laughably so. Listen to yourself. You're telling people not to invest because they'll only do well out of it rather than doing very well out of it. People were saying the same thing about gold two years ago and one year ago.

The problem with that sort of thinking is that it relies on you being able to time when when market will go from being irrational in one direction to being irrational in another.

Lets take the dot-com boom as an example. There were people saying that dot-com companies were overvalued in 1997, when the Asian currency crisis hit. Those people were, in retrospect, probably right. However, the next two years made them look like complete fools, as the bubble maintained exponential growth for another two years before completely collapsing.

Same thing with China. Yeah, the bubble might have another couple of years left. If you get in now and get out when the crash hits you'll make a modest profit. But, if you mistime the crash, you could stand to take huge losses, as the value of your currency investments falls far below the price you paid for them.

Re: Reasons to Open a Chinese Bank Account

#73

Post by khafra »

roc wrote: post #29
dagw wrote: post #3

tl;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.

It seems that if the goal is to diversify, there are plenty of other options. That isn't to say that this one is bad, but I'm deeply skeptical of any investment once the press starts running articles about why you should buy into it.

Yeah; "diversify for safety by buying this one particular thing we're doing our best to make wildly popular" strikes me as disingenuous advice. "Diversify by holding a portfolio of small, mid, and large-cap domestic and overseas equities, ETFs, bonds, real estate, and other assets in proportion to your risk tolerance and investment horizon" seems to hold up better with a year's hindsight.

Re: Reasons to Open a Chinese Bank Account

#76

Post by klbarry »

I understand there are many successful ways to invest. However, in my life, I've only seen one strategy succeed: you make a profit when you buy, not when you sell. Some people call it value investing, but unless it looks like a stock is undervalued for whatever reason, it's not usually worth investing in. Chinese Yuan, while it may go up, does not seem to be undervalued.

Re: Reasons to Open a Chinese Bank Account

#77

Post by rtghnthyjnm »

grandalf wrote: post #43
sethg wrote: post #30

Earlier quoted context omitted.

If it had to, couldn’t the party trash the currency (from an international investor’s point of view) without trashing the economy?

Not without also trashing it for those in China using it as a store of value, and not without the cost of price instability being imposed upon anyone selling/buying goods with the currency during the process.

You can if every thing they want to buy is made in your country.

The US can't half the value of the dollar to boost exports because everything in Walmart that is made in China will double in price.

China can because everything it's people want to buy in GreatWall-Mart is already made in china. As long as the government steps in to subsidize imported fuel the people wouldn't notice as long as they didn't travel - and you don't want them to travel anyway.

Re: Reasons to Open a Chinese Bank Account

#78

Post by phjohnst »

maukdaddy wrote: post #12

Much like the tech bubble and housing bubble, by the time you read these articles in the mainstream press, it is FAR too late to invest. You've already missed 10-15 years of explosive growth in the Chinese economy.

Risk/reward.

If you got into China 15 years ago, you had no idea how things were going to pan out (and you deserve compensation for holding that risk). If you get in now, there's a more likely chance (I'd argue) that you'll do well, so the risk, and therefore the compensation you deserve, is lower. And holding currency is a lot less risky than equities, anyway.

The people that would be interested in a Yuan bank account up to $20000 aren't really sophisticated investors anyway.

Re: Reasons to Open a Chinese Bank Account

#79

Post by borism »

yummyfajitas wrote: post #33
Vivtek wrote: post #19

Earlier quoted context omitted.

Yeah, and given the results of the past decade I'm inclined to trust the Communists... Not that they're actually communists; they're just a really big national corporation, imho.

I'm not inclined to trust the communists more than the Fed, but I am inclined not to put all my eggs into one basket.

The above discussion makes little sense.

By maintaining USD peg China has no independent monetary policy - it's monetary policy is directly influenced by Federal Reserve.

Re: Reasons to Open a Chinese Bank Account

#80

Post by grandalf »

16s wrote: post #67
grandalf wrote: post #61

Earlier quoted context omitted.

How does buying an index fund mean giving a stock broker more money? It's your money, invested. You're certainly free to keep it under your mattress if you prefer. Historically, money invested has drastically outperformed money kept under mattresses :)

Because it never ends: 1. You don't invest? Let me help you start. (give guy money) 2. Good, you invest. Let me help you diversify. (give guy more money) 3. Good, you are diversified, but you need to diversify more (give guy even more money) 4. You have too many stocks. Let's get you into more bonds. (give guy money) 5. Hmm... you don't have any exposure to Far East currency, but we can't take away from your Euro pos…

It's true that relative to inflation many investments do quite poorly, and it's true that some investing is a scam. I don't think it's true that all investing is a scam.
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