Is China Opening Up to Forex Traders?
Entering China has become a hot topic in the forex world. From boardrooms to bulletin boards, there’s a significant amount of buzz regarding the best way to delve into this market. China offers enormous potential for traders, yet this remains largely untapped due to the draconian regulations laid down by the Communist Chinese government.
While it’s been possible for Forex companies to gain some kind of access to Chinese markets, this has typically been accomplished through partnerships with local representatives, offices in less heavily-regulated Asia-Pacific offices and IBs, this has not translated into securing a real presence in the country itself.
Recently, however, there have been encouraging signs that things may be changing. The Chinese government is now beginning to relax the laws affecting forex trading, opening up the possibility that traders will be able to gain a foothold in China’s markets without the need to resort to the ubiquitous representative offices, which have previously been the sole way for traders to engage with the market in China.
One key change has been the decision to allow residents of China to buy foreign exchange as long as they don’t exceed a certain maximum payment. Chinese residents who pay less than $50,000 for the services of an overseas-based institution will be allowed to purchase forex; crucially, this also applies to online payments.
What this will mean in the long term for online forex trading remains to be seen. It seems reasonable to surmise, however, that these regulatory changes may have positive results for the savvy online foreign exchange trader. If looser regulation removes the need for assistance “on the ground” in China, this may well translate into fresh opportunities for trading Yuan Renminbi.
