Yesterday, the article, "lifting restrictions on $50,000 in foreign exchange purchases, laughing at foreign exchange, crying to death at underground banks," almost scrubbed the screen. I think several official accounts send such articles for a purpose, and the uninformed masses continue to retweet the article. So much so that a friend asked me to "lift the $50,000 limit," and even more ironically, many professionals retweeted without thinking. Here I can tell you clearly, fake!
Look at 01: rumors
QDII 2, rumored to date in 2015, has not fallen to the ground until now, nor does it have any official authority to uncover the old news to speculate on lifting the $50, 000 limit on foreign exchange, not knowing whether the editor`s ignorance or deliberately fooling his clients.
There are also many self-media, I will not enumerate here, here I would like to remind you that in the face of Internet information must have their own judgment, as engaged in business related to foreign assets and foreign exchange should be responsible for their own release of information, As a customer, you need to have a sense of discrimination for information.
Look at point 02: restore the truth
Baidu`s search for "lifting the $50,000 limit" revealed that most of the information was rumors of 2016, when safe first came forward to refute the rumor.
With a little bit of financial common sense, is it possible to lift the $50,000 limit in the face of China`s current situation?
1. What is QDII2
QDII2 is the abbreviation of qualified domestic individual investor. Like the QDII (qualified domestic Institutional Investor), it is an important system that allows foreign investment to a limited extent when the renminbi is not fully convertible and the capital account is not yet fully open.
Under the condition of non-convertible under RMB capital account, QDII2 refers to an institutional arrangement that allows domestic individuals to invest in stocks, bonds and other securities in the foreign capital market in a controlled manner.
2. Tough QDII2.
In 2015, after the State Council explicitly approved the launch of qualified domestic individual investors (QDII2), preparations were nearing its end. Measures for the management of overseas investment by qualified individual investors will be issued soon, with six cities in the first batch of pilot QDII2 cities: Shanghai, Tianjin, Chongqing, Wuhan, Shenzhen and Wenzhou.
In August 2017, it was rumoured that China`s State Administration of Foreign Exchange had drafted a plan to restart qualified domestic individual investors (QDII2) and was seeking approval from the State Council. The pilot will include cities such as Shanghai and Tianjin, and the restart time will depend on market conditions after the 19th National Congress and cross-border capital flows: residents of the QDII2 pilot city will maintain the same amount of exchange for $50, 000.
Manson has inquired about all kinds of information and consulted relevant experts. So far, QDII2 still has no official documents, no implementation details, no authoritative information on the implementation time.
Look at Point 03: the Prospect of Foreign Exchange quota in the Future
Manson believes that in the face of such an international (Sino-US friction) domestic (industrial transformation) environment, the $50, 000 quota will not change in the short term (three years), and I think it is more likely to cut it than to relax it.
In the future, with the rise of China`s economy, the implementation of Belt and Road Initiative, the international settlement of RMB, the liberalization of foreign exchange control is inevitable, but it will take time.
