Hong Kong piques mainland China investors’ interest as lower rates prompt southward shift
Individual investors in mainland China, buoyed by incentives and a rising yuan, are seeing appeal in moving their capital to Hong Kong
In anticipation of a prolonged period of lower interest rates – and with the recent appreciation of the yuan vis-a-vis the US dollar – more individual investors in mainland China are eyeing Hong Kong as a favoured destination.
Some from the mainland are opting for the gradual, “ants moving home” approach – carrying cash to Hong Kong or Macau in small amounts, as an ant would while relocating its colony – while others are considering the cross-boundary Wealth Management Connect (WMC) scheme.
Thomas Xu, a doctor at a public hospital in provincial capital Guangzhou, has mobilised a small army of friends and relatives – including his nanny – to aid in the more tried-and-true method. He converts his yuan-denominated savings into US and Hong Kong dollars, then his associates bring the cash to Hong Kong in small amounts to deposit them in a new bank account opened by his wife.
“We used our own quotas to exchange dollars for him, and the whole family made several day trips to Hong Kong just to bring the money over,” said Sofia Qin, Xu’s sister-in-law.
The family did not disclose how much money they moved, but with five “ants” involved in the plan – and with laws on the mainland limiting individuals to US$50,000 of foreign currency exchange per year – the theoretical annual maximum would be US$250,000.
