How to buy the Chinese Yuan for the LT

I am interested in following Jim Rogers and buying some Chinese Yuan for the long-term (5-10+ years). I won't be buying a lot, maybe $50,000 - $100,000 worth. I'm unsure on how best to do it. Any suggestions on the following would be greatly appreciated.


1. What bank should I use? A domestic bank, foreign bank?

2. I would like to earn interest on the money as well as participate in the LT appreciation of its relative value to the US$. China's interest rates are higher than ours, but is the red tape of investing over there too much? What are the tax consequences of doing it the different ways?

3. Would it be best to buy the spot currency or futures? Or stuff the cash under my pillow?

4. Should I use leverage for this LT investment? What would the carrying costs be?


Thanks in advance for your help and advice.

tb

 

Does anyone know how to invest in the Chinese Yuan?

 

http://www.hsbc.com.hk/1/2/hk/banking/rmb

 

Everbank .com let you open an RMB account.. no interest,

 

Oanda allows trading in the USD/CNY pair, although the spread is a static 40 pips, and the interest rate is showing as -4.5..

http://fxtrade.oanda.com/spreads/comparing_broker_spreads.shtml
https://fx2.oanda.com/user/interestrate.html

 

I go to china a few times a year.

I have bought the physical Yuan everytime I am there thinking it will go up in value. So far so good.

I have asked people I work with in China if I (an american) can simply open a savings account for the same reasons as the OP. Wanting to gain some interest on the money sitting is better than having it sit in my home safe.

I was told I could open an account and just needed some of the basic things I would have anyway (passport etc..)

Aside from Hong Kong I have experienced a very fair exchange rate at hotels and didnt feel the need to go to a bank to exchange. There are limits to how much you can exchange per day and if i remember correctly its in the hudreds of dollars (pretty sure you cant change 1000 in one day but never tried that much in one day)

of course trying to deposit dollars changed to yuan may or may not be easier directly at a bank.

 

1Reason,

The limit to how much you can exchange per day is $10k and $100k per month. I have been doing the same when I go to China on biz trips every year. Once having an account set up, wiring money to my Chinese bank account from my US bank account is also pretty easy to do. I even bought two condos in China two years ago with yuan. I take my bank card anywhere I go within China and I can always get cash at ATMs. The only problem with the physical yuan is later if you ever need to exchange large amount of yuan back to USD in a hurry and try to move the money back to the US, the restricted exchange amount per day(or month) would make this job a real pain in the neck if you have millions to move.

 

this writes that its only for HK ID holders? i am guessing that means hkg residents only?

 

So you can just go to any chinese bank and open an account with ur foreign passport? What if I am not actually physically living in China, Dont they need proof of residence and all that?

 

Absolutely not. All I have is my US passport and that's all they need. There's a form to fill out. I wrote down the hotel name in the address line. I have 3 Chinese bank accounts, all were set up this way.

You are right about in HK, you do need to be a HKID cardholder to do banking.