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by gamblor956 2491 days ago
I'm referring specifically to the capital-related currency controls.

A few years ago China clamped down on how much cash a person could send/take out of China or exchange for foreign currency.

It impacted a number of Chinese companies with operations in the U.S., especially Chinese real estate developers like Greenland, and basically eviscerated the EB5 visa market. I had a number of clients cancel deals because they couldn't get their money out of China.
1 comments
seanmcdirmid 2491 days ago
Yes, they clamped down on Chinese quotas, but not foreigner quotas. Your comment:

> --a lot of non-Chinese companies immediately backed off on Chinese investments (i.e., factories, etc.)

That meant foreign companies on Chinese investments, not Chinese companies on foreign investments, right?

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gamblor956 2490 days ago
The rule applies to Chinese companies and to the yuan-denominated financial accounts of foreign companies physically doing business in China (meaning having an office or facility in China), which is why it had a dampening effect on foreign investment.

Annoyingly, if you ask a representative of the Chinese government if such a rule exists (before you have sent money into China), they will tell you no such rule exists, or that the rule doesn't apply to foreign companies. They wait until the money is in China and you try to transfer it out of your bank account to let you know that your company is also subject to these rules.

Several US clients of mine found this out the hard way (a few years ago, before the trade war).

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seanmcdirmid 2490 days ago
The requirements for doing forex are very different for both entities (and I know this from being a foreign entity with Chinese income and a Chinese bank account). There isn’t one rule, it’s a set of regulations.
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DuskStar 2491 days ago
Doesn't China require that a lot of ventures be majority owned by Chinese citizens? I could see that money ending up 'contaminated' and hard to pull back out of the country later.
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seanmcdirmid 2491 days ago
Some JVs have a 51-49 rule, but these are mostly being liberalized. Basically, most foreign companies are underwater on their quotas so they can convert as much as they need to. All they have to show is that they either converted that much to RMB earlier or earned that much and paid taxes on it.

Tech companies like Microsoft fully own their Chinese subsidiary.

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