China Adds New Disclosure Requirement on Individual Forex Purchases
Starting January 1, 2017, Chinese citizens have to report the purpose of their currency purchases to the State Administration of Foreign Exchange (SAFE), the country’s foreign exchange regulator. For several years, Chinese citizens have been limited to transferring up to U.S. $50,000 legally out of the mainland. The new directive maintains the same threshold but adds the purpose requirement. The stated purpose cannot be real estate investment, according to Inman but it can be for purposes such as travel, education, etc…
The average U.S. home price for Chinese buyers in 2015 was $831,800, according to CNBC. Between 2010 and 2015 Chinese buyers purchased $93 billion in U.S. residential real estate, $208 billion in mortgage-backed securities, and about $17 billion in commercial real estate, according to the report (citing Rosen Consulting Group and the Asia Society).
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The yuan fell almost seven percent against the dollar in 2016 which was its biggest annual loss against the dollar since 1994 and made the Yuan the worst performing major Asian currency for 2016, according to Reuters.
Last Updated on January 5, 2017 by Ramin Seddiq