Banking in China
Deciding who are the communists and who are the capitalist no longer follows conventional thought. No doubt, certain aspects in China are heavily “managed” by the government; however, the trend of growing freedoms is in place. The same cannot be said about the West. Freedom is more then being able to vote for one incompetent or another, a discussion best left for another time.
Banking in China should be part of the discussion when trying to preserve your purchasing power. We live in interesting times, as the saying goes, and now we are witnessing a time in history where the globe is making a gradual shift away from the US dollar the Reserve Currency. The Chinese Yuan is being used more and more in Trade around The World and could potentially provide an alternative.
Skeptical, check out the chart below
Things, they are a changing.
How does this relate to anyone other then a Chinese person? Being able to save in Yuan or RMB provides individuals another avenue for return and safety from the gradual declining dollar (Canadian or US). Not convinced; listen to one of the most successful investors in history.
If that isn’t enough this excerpt by Bill Bonner goes along way in explaining why you should have cash in another jurisdiction.
A War on Cash
Until recently, it had been presumed that rates could not sink below zero. People would not pay for the privilege of holding cash in a bank or a bond; they would just take the cash and hoard it.
But all over the world, central governments have begun a “war on cash” designed to force people to use credit, rather than cash. The feds can monitor, tax and control credit. They can even force you to pay for the privilege of having it.
The European Central Bank and the Swiss National Bank already require depositors to pay for storing money. And beginning this week, JPMorgan Chase began charging depositors a “utilization fee” to hold their money.
Meanwhile, economists are advocating taxing cash or even, like Harvard economics professor Ken Rogoff, making it illegal. France has already made it illegal to pay bills of more than 1,000 euros with cash. And the US requires financial industry workers – such as bank tellers – to rat out customers by filing “suspicious activity reports” on anyone who comes in with what they consider an inappropriately large amount of cash.
Why the “war on cash”?
Partly to control you. And partly to control the economy. If they can create a NIRP world – with negative nominal interest rates – they may be able to keep the credit flowing to cronies and zombies, maintaining the economy in a coma for many years.
Businesses that should go broke will have access to credit. Speculators will still make money. Governments will continue to print money and borrow it from themselves. The zombies will throw rocks and bottles every once in a while, but they will still get their cash and the system will survive.
So, just what is it like to open a bank account in China?
- Get here.
Entering the country is quite easy. New agreements between China and countries such as Canada or the US have made it even more simplified.
You can apply for a visa prior to making your way to China, from your home country or you can make your way to Hong Kong and apply there from one of 2 reputable Visa Centers.
Once armed with a visa, cross the boarder into Shenzhen (from Hong Kong) or fly into another major center.
Now that you are in China, head to any of the Larger Banks and simply ask to open an account.
—–To date, our experience comes from dealing with The Construction Bank of China, for personal banking and ICBC for business banking.
- What do you need?
All you will need is your passport. I was not asked to even provide an address. If at some point you are, I am sure there will be a work around as is for everything else here. China the land of the ‘workaround”.
- Other Options
- You can simply stay in HK and open a bank account there and ask for an account in RMB.
- Visit one of the many Bank of China locations in the West. Each offers RMB denominated savings accounts. However, the key is having some of your money outside of your home country.
So, why bank in Asia
Banking here, gives you a few options.
- The value of your savings will be based on a different currency, a currency appreciating steadily over the last 5 years against the Dollar or “Loonie”.
- Your savings are being kept in a jurisdiction, especially in HK, whose financial house is in far better shape than those in the West.
While not happening explicitly in the US yet, capital controls seem to be all the rage in the world right now. From withdrawal restrictions to forced confiscation, when governments panic they do all they can to prevent you from moving your money to a safe place.
Cyprus bank restrictions…..have since been lifted.
If you had savings in China, I dare say you would be safe from the Canadian or US trying to strong-arm the government or bank into handing your money over.
——swiss banks and fines.
Wouldn’t China confiscate my money?
The environment in China is vastly different. The majority of transactions are done in cash and the average citizen has their savings in cash, not investments. While a possibility, the changes being implemented in China, the growing freedoms, would prevent the government from turning the clock back on what they have started. The Chinese have shown the willingness to revolt, a character all but gone in the West. The typical North American is simply going along with what the government mandates. Capital controls and the conversion away from cash are not for your own good or to “prevent terrorism”, but policies to allow for further monetary foolishness.
The world has many options to preserve your hard earned money; most of it is simply a click away.