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Administration of Foreign Exchange Introduced Measure to Validate Domestic Issued Bank Card Use in Foreign Countries

On June 2, the Administration of Foreign Exchange issued a notice stating that, starting September 1, domestic financial institutions must report transactions if a bank card is used overseas and if the total amount is over 1000 yuan (US$150). The measure serves to validate personal information when there is spending activity overseas and to prevent any illegal purchase activity. People’s Daily published an article on August 4 stating that, since the bank card has become an important method for money laundering or corruption activity, the start day for reporting financial activity when using domestic issued bank cards overseas has been moved up to August 21. According to the article, a large amount of cash has been spent overseas in recent years. In order get cash to use while traveling overseas, some Chinese tourists have worked with a store to create fake purchases of jewelry or watches. Then they get cash from the store instead. Some have sold bank cards to be used for cash withdrawals overseas. The spokesperson from the Administration of Foreign Exchange stated that implementing reports of overseas bank card transaction activity will prevent illegal bank card transactions. The financial institution needs to report and collect the data and there is no need for the card user to do anything different. The Administration said it will not affect personal use of the bank card and personal information is strictly protected.

1. People’s Daily, August 4, 2017
2. Xinhua, June 2, 2017

VOA: China’s SOEs in Hong Kong Openly Establish Party Structure

Voice of America (VOA) reported that China has recently taken off the veil and is openly establishing the Communist Party structure in its State Owned Enterprises (SOEs) that are listed on the Hong Kong Stock Exchange.

“From 2016 through July 2017, at least 32 of China’s SOEs listed in Hong Kong proposed to adjust their corporate governance structure to include articles that formally establish the Chinese Communist Party (CCP) Committee within the company. It has become particularly obvious in the past few months.”

The Industrial and Commercial Bank of China (ICBC) passed amendments to its by-laws in June 2017, including the following articles:

“According to the ‘Constitution of the Chinese Communist Party’ and the ‘Company Law,’ (ICBC decides to) establish the CCP’s organization (within the company).”

“The CCP Party Committee will have one Party Secretary, two Deputy Secretaries, and a few Party Committee members. The Chairman of the Board and the Party Secretary should be the same person.”

In their by-laws, other SOEs, including CITIC Securities, Sinopec, and other steel and energy companies, also defined the CCP’s leadership role in the company. These 32 companies have a collective market value of over US$1 trillion.

Since it attained power in China in 1949, the CCP has always firmly controlled China’s SOEs.

In 2001, shortly after China joined the WTO, China extended the CCP’s control to private companies. It required that any private company that had three or more CCP members as employees must establish a Party Branch or Committee within the company.

Walmart China and other foreign enterprises in China established CCP Branches around 2006.

Source: VOA, August 15, 2017

Since the Start of 2017, Chinese Overseas Real Estate Investment Declined 84 Percent

Hong Kong’s Mainland-backed Phoenix New Media recently reported that, based on an analysis that Morgan Stanley Chase completed, the commercial real estate markets in New York, Sydney, and London may face serious challenges in the next two years. The primary cause of this warning is that Chinese investors have started withdrawing from overseas real estate markets. The Chinese government is tightening up capital control and commercial loans very quickly. Statistics showed that, since the beginning of 2017, the total of Chinese overseas real estate investment has declined 84 percent. The expectation is that an additional 18 percent drop will continue into year 2018. The same 2017 number that the Chinese Ministry of Commerce released was an 82 percent decline. According to statistics that the Chinese banking industry published, in the first half of this year, China’s total direct investment overseas showed a decline of 45.8 percent, to US$48 billion. In the second quarter, real estate pricing in Manhattan had already dropped 25 percent.

Source: Phoenix New Media, August 14, 2017

Hurun Research: Wealthy Chinese Immigration Trend Is Growing

The well respected Chinese wealth ranking institute Hurun Research recently published its 2017 immigration report on the Chinese population with wealth over RMB 20 million (around US$3 million). The report showed that 84 percent of the surveyed sample worried about the depreciation of the Chinese currency, which is a 50 percent increase from the same number last year. The United States has been the top choice of immigration destination for the wealthiest Chinese for three years in a row. This year Canada surpassed Britain to become the second choice. Britain is now the third choice and Australia remains number four. In the United States, Los Angeles is the top destination city, followed by Seattle, San Francisco, and New York. The report found the primary drivers for immigration are education quality (76 percent) and environmental pollution (64 percent), followed by “ideal community environment” (53 percent) and “medical care quality (29 percent).” The report also shows that a long waiting list is the number one obstacle to those wanting to migrate, followed by language barriers. Balanced global wealth distribution and investment is a focal point for the wealthy population. This year, tight foreign exchange control is rapidly becoming a new major concern of these people.

Source: Hurun, July 15, 2017

Local Officials Will Have Lifetime Accountability for Government Debt

According to an article from, in order to reign in the exploding local government debt that has been growing out of control, Xi Jinping recently announced that the municipal government must strictly control the debt ceiling and the related officials must have lifetime accountability for the debt. Xi made the announcement during the finance conference which was held last week. The lifetime accountability will prevent the officials from shirking their responsibility once they have retired, According to the article, local debt has risen rapidly in recent years because officials seek GDP growth as a measure of their political achievement. The article went on the report that the Ministry of Finance has set up a debt ceiling in order to ease the local debt risk. By the end of 2016, local debt was at 15.32 trillion yuan (US$2.27 trillion) which was less than the 17.19 trillion (US$2.54 trillion) debt ceiling. The debt ceiling for 2017 was set at 18.82 trillion yuan (US$2.78 trillion). Meanwhile, in 2014, the State Council started to include the local debt as one of the measures for party official’s political achievement.

Source:, July 16, 2017

Pan Asia Nonferrous Metals Exchange Is a State Ponzi Scheme

The Pan Asia Nonferrous Metals Exchange was once an attractive investment platform that the government promoted in 2011. Over 220,000 people invested a total of 43 billion yuan (US$6 billion) in it. However, in 2015, it turned out that it was a Ponzi scheme and most people lost their money.

Investors have repeatedly appealed to both the Yunnan Provincial government and the central government to request help in order to recover their losses, but, so far, the government has provided no response.

Recently, a video was posted on YouTube with edited video clips promoting Pan Asia from the China Central Television (CCTV). These showed that the government was responsible for crediting and promoting Pan Asia in its earlier years. The video clips showed CCTV’s vigorous introduction of the nonferrous metal exchange platform, broadcasting Pan Asia’s collaboration with CCTV, and promoting Pan Asia’s business.

Source: Radio France International, September 24, 2016中国/20160924-泛亚诈骗:国家导演的庞氏骗局

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