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Bigger than the peg are the problems with moving the yuan out of your bank accounts once it’s in China. Their currency controls are some of the tightest in the
by kasey_junk 5y ago
Bigger than the peg are the problems with moving the yuan out of your bank accounts once it’s in China. Their currency controls are some of the tightest in the world and getting more so since COVID.
- DrBazza 5y agoWe'll just see a repeat of the Deutsche Bank laundromat: https://www.theguardian.com/business/2019/apr/17/deutsche-bank-faces-action-over-20bn-russian-money-laundering-scheme https://www.theguardian.com/business/2019/apr/17/deutsche-ba...
- brobinson 5y agoThere are ways around it: https://en.wikipedia.org/wiki/Panda_bonds https://en.wikipedia.org/wiki/Panda_bonds
- kasey_junk 5y agoThere are. They are still denominated in yuan though so you have to fx them through an illiquid fx market that suffers from currency controls. Further the rules for whether you can or how much you can repatriate the proceeds from this bonds changes ~yearly at the whim of an opaque bureaucracy and they are very new instruments comparatively. All that’s to say the yuan needs to be liberalized or companies have to invent new finance operations before China takes over the finance sphere. That doesn’t happen fast.