China Cracks Down on Money Leaking Out of Its Borders (How Will You Cope?)

[Jefferson Kim]

This is kind of an old article from August last year: http://www.wsj.com/articles/china-cracks-down-on-m...

http://www.scmp.com/business/banking-finance/artic...

"I Surived Real Estate" video forum talked about its effects with the panels mainly in the first video.

http://www.isurvivedrealestate.com/watch-the-video...

What happens when China finally decides to actually plug up the holes and lock down money from leaving China?

If you knew the 12 month period when China would cut off all capital outflows to the United States, how would adjust your investment strategy to make the most money from the aftermath?

[NOTE: This is not a discussion on if you believe China will never enforce its current $50,000 limit per Chinese citizen. That goes to internal politics of the Chinese government which is beyond the scope of this post. For the sake of simplicity, this is assuming the Chinese government is successful in fully clamping down the outflow, its effects on the US Real Estate market, ways to cope, and ways to profit from such occurrence.]

[Kenneth Jones]

Hi. I live in Shanghai. My wife is Chinese. Let's do some "anecdotal evidence" chat about this. 

Yes there is a 50,000 limit per citizen, but note it's per year, not per lifetime. My understanding is that it's a rolling twelve, not per a calendar year. However...

You can move it to an American relative/friend/trusted soul like uh, me...and so can your spouse, and your father, and your mother and your aunt and your uncle and your neighbor if you're close and trusting...

So, is there a practical limit to home buying? Well, I'd say no. And cash is king in this country.

It's not as clean and easy as it might be, but there is no legal impediment to the action I described. 

Probably the best description I've ever heard of the popular understanding of Chinese law is a common saying "The law is the law, and China  is China." I think that's roughly equivalent to "It's not illegal if you don't get caught" but that might be a little too clear. Chinese relationships are rarely clear, it seems.

Now, I'm not at all aware of how the high rollers launder their millions through HK, but in terms of smaller (500K or so) purchases, there is no barrier. 

To start, look to build a little guanxi (sounds kinda like Gwan Shee) which is among other things, social relationship, social responsibility, serious friendship. 

China doesn't have a firm grip on contract law quite yet, so the personal relationship with the other party is still paramount.

Just my two jiao ;) ...and I could be wrong about everything.