China limits foreign ATM withdrawals

The China shut down of fleeing capital continues, from Forexlive:

MNI reports on the latest from SAFE (State Administration of Foreign Exchange):

  • Putting a cap on annual cash withdrawals, of CNY100,000 for Chinese citizens using bank cards at overseas ATMs
  • (The current limit is CNY10,000 daily, but no annual limit)
  • China is facing pressure from capital outflows
  • The SAFE has called on banks to step up checks to limit outflows but cash withdrawals at overseas ATMs create a loophole for people to move money overseas

They’re going to shut every channel, every portal, every pipe that they can. Australia’s China property bid is in trouble.

Comments

  1. Far out MB I’m going into mean reversion hope overload here with NAB’s LVR lowering, CBA CDS bullishness, some minor APRA MP coming on, FIRB/ATO November amnesty ending and China clamping down.

    • I wish I can look with such optimism into carnage that comes with it.

      But I look with even greater fear into the future if the carnage does not come.

      • People who are paying their mortgages only have to continue paying their mortgages, nothing changes in this regard either way. I very much doubt that the Australian government will allow banks to call in the debts, this will be bailed out.

        Only those who lose their jobs will suffer, as they would anyway if they have a mortgage. The madness cant continue to hurt everyone in the future to safeguard the present.

        Every future homeowner/renter and generation wins from the ending of this disaster.

    • Add to that the SMSF retirees who will sell on seeing their super start to disappear as prices fall.
      Yeah, this is going to crunch.

      Apartments are going to be a bloodbath.

    • TailorTrashMEMBER

      And how many do we have that will be under the eye of Beijings Commission for Discipline Inspection.
      I’m sure our Chinese comrades are burrowing away in Australia right now to identify them and where they live .

      • In some ways the best part is the time frame – 14 years.

        If you think that just cause you got here early, say in 2003 or something like that, when no one else was doing it, and no one’s knocked on your door yet, that that means you got away with it, you’re dead wrong.
        The best part is, the more people jump late on the band wagon (of hiding out in Australia), the more worthwhile it will be for the CCP to put Australia under the microscope.

        If a whole lot of people really fled to Australia in the last couple of years with suitcases of cash belonging the cadres, the extraditions will go on for decades.

      • @StatSailor, IIRC it is 2 years to PR and another two years to citizenship (followed by immediate renunciation of Chinese citizenship).

        It will be interesting to see if the Oz government would send Aussie citizens back to China.

      • I guess you must feel like the Australian government is better at standing up to foreign powers than the US government then. After all, being born and raised here is no guarantee that our government won’t shop you to any random country with a firing squad for half a brownie point.

        The woman in the article was, at one time, a US citizen, until her citizenship was cancelled – which solves one problem. And I note that our Immigration seems to drool whenever the conversation turns to cancelling citizenships.

        Having read the article again more closely, I’ll accept that they may have a degree of safety if they were completely above board in their dealings with the DIBP – attempting to pull the wool over the US Immigration Department’s eyes seems likely to have contributed to this woman and her husband’s downfall. My guess, though, is that people might do all sorts of things they later regret when they think they’re outrunning an execution van, including fudging a few questions on a visa application form.

      • @MedVed – safe bet Australia will turn its back on ex-Chinese citizens. We have a history of not protecting our citizens under duress from superpowers.

      • Stat,

        The Aust. gov may be no stronger than the US when it comes to extradition, but Aust courts may have something to say when it comes to the “evidence”.

      • How is that different to the US courts – your implication seems to be Australia has the rule of law but the US does not (and at a federal level)?

        Indeed the US courts have had a lot to say about the evidence in this lady’s case – on the basis of the evidence US courts sent her to a US prison – laundering money you steal in China via bank accounts in another country means you commit crimes in two places for the same deed.

        (the same thing has already happened to Chinese born Australian residents – Chinese authorities supplied evidence to Australian Federal Police leading to a jail term here before extradition back to China for more charges)

  2. it’s on like Donkey Kong!

    Houses and holes are sliding into the great Australian sinkhole.

    Can’t wait for the black swan to add to the chaos and send markets reeling…

  3. “Australia’s China property bid is in trouble.”

    We live in hope, but not expectation. I’m sure there will always be ways to get around any law. In any case, foreign investment (Chinese in particular) is a big contributor to our housing bubble, but not the only one. I’m sure our government will find other ways to keep it propped up.

    • that’s the powerful thing about electronic payment systems controlled by a single entity (SWIFT for the US; and by the sounds of it SAFE for china) – it’s very very hard to operate in a world that exists outside of those financial systems

    • Chinese bids are pushing up the price at the margins, once that is removed you are left with baby boomer speculators. Once they hear they can’t offload that investment onto China man in 3 years they will think twice before buying and look for the classic yield play.

      Paying $1,000,000 for a 2 bed apartment that rents at $600 is not going to be very enticing. You will get a lot still purchasing justifying it that they are buying for the kids future, no intention to sell for 20 years etc etc but no one wants to be the sucker at the family BBQ.

      This will merely just make people think twice. Will it be enough to slow down the baby boomer appetite for property? Who knows.

      • Yep, the well of Buyers of Last Resort and Greatest Fools is threatening to run dry…

        Boomers playing shell games with property and equity amongst themselves won’t cut it to keep this thing alive.

      • I guess it’s possible some boomers will go out and get one more IP as a last hurrah…

        There are baby boomers who turn 70 at next birthday and the median is about 62. Would have thought there weren’t that many more years that baby boomers were going to have an impact on the buy side of the market.

        Baby boomers looking to sell before moving to a retirement village or before setting off on their grey nomad adventure, though…

      • That is right. Market is set by the marginal buyer who has been Chinese. Take them away and it becomes about Australians again.

        Holy moly the apartment market is going to come apart at the seams. How many just won’t settle… thousands? 10s of thousands? My God.

      • Love the photo of 9 David street, Richmond.
        If the developer succeeds in selling 100% of the apartments to people who never come here , what are the odds it still looks like that in ten years time?

  4. Awwww, crap. My US index funds dropped a bit…

    … which signals absolute carnage for Australia. Does anyone else feel like in the last day we entered a new phase of the GFC?

    • T’ he last week, for sure. I told my mrs months ago that it would hit sept and oct. She made a comment last night ‘ if nothing happens yhis month we’re buying a house. I asked her what it is she thinks will happen, because shit could not have been more obvious in the last bit

      • at least yours listens to you! Mine still doesn’t despite every finance-related decision of hers turning to sh!t (e.g. she was wiped out in a 2008 collapse, lost it all, 1 mil of savings, investments – after first agreeing to and then refusing to sell. It took me months to get her to agree, perhaps only a nano-second to renege).

        I’ve managed to avoid the house thing though – my turn to be obstinate – I simply refuse. No other way.

      • Jacob / Rage – I feel your pain. Had a similar issue. It caused some tension but in the end we just sat down and worked through the numbers and it became apparent how financially suicidal it was with the current frenzy. As soon as the missus realised buying at current prices would make us mortgage slaves for the next 20 – 30 years she was having none of it and wants nothing to do with it. Having MB articles to back it up also made a huge difference…. good luck with it gents!

      • If Reus were here he would point out that all the idjits who bought shares have gone nowhere in a decade, whereas the clever sexy Sydney housing investors never lose; it’s the ONLY game in town, government guaranteed!

        I find the AU share market decline delightful. It signals an even bigger mean revision for Australia, as the fundamentals are worse. I’m loving this; it’s the best/worst case depending on how you feel about doom-porn. Personally, I’m a fan… ‘PLREPARE TO MEEEEET ZYHOUR DOOOOOOM!’ – the naughty twins.

      • @LordDudley – I would find it even more glorious if a large portion of my savings was in $AUD. I am still trying to determine the best way to transfer into USD. Although I have to admit I just haven’t spent a lot of time sitting down making it happen, so it’s my own fault. I was going to change it over at 75cent range.

        The rest of my savings is in Euro which I’m thankful for leaving over in Europe. (have a bank account there).

        If the AUD does go as low as some bears are calling (0.40c range), it will be very interesting indeed.

      • Whatever, dude. Enjoy the Oz depression, and keep waiting for that US collapse. It’ll happen any minute now, I promise! Ha ha ha!

  5. Did I calculate something wrong or did the withdrawal limit just go down from ~$800k AUD to `$22k?
    If so, this is wonderful news. It will crimp retail too, particularly high end stuff I presume. Economy could be hurt everywhere!

    I’m jaded btw and now prefer a scorched earth result for Australia than high house prices.

    • Excellent! Being jaded is the first step to becoming a schadenfreude addicted total jerk, like me!

      They deserve it! Yeah baby, you know it! I don’t even care that my current investments are going backwards, because I know for every dollar I lose, debt-heads who I can’t stand are losing 10 (or will soon be losing 20). Ha ha ha!

    • Pfffftttt, I’m sure the Chinese will find ways to go around it. Multiple accounts / cards from different banks for one person who gets a “fee” to facilitate the “transaction”. Enough poor people in China who can sell their annual limit.

      Or they just go straight to bitcoin since individual transaction is still legal. Maybe it’s time to speculate into these bitcoins. 😀

      • That’s along the lines I was thinking. Might even see people setting up hokey export businesses with no intention to repatriate the money back home. Its an idea that scales nicely. Start out with a 20 foot container of electronic goods and just keep throwing money into the venture.

  6. And there goes the high end tourism industry, and even selling mega amounts of anything to the hungry Chinese tourist shopper. South Korea must be crying into it’s kimchi right now. Seoul has an amazing set-up for the Chinese shopper tourist…

  7. Now I’m a wondering… I live in an apartment building about four blocks from University of California – Berkeley. My building is stuffed with mainland Chinese kids with 4-door Porsches, BMWs, Mercs, and Audis, still with the factory sticker on. Rent for a 2BR apartment is about $40k USD per year.

    I wonder what will happen…

  8. Cue suitcases of cash being flown out.
    Boat loads of gold bars and paintings.
    It is going to be about getting physical assets and cash out now.

  9. If this is for real, there go lots of things, no more Uni (visa factories) for the kids, expensive holidays and apartment purchases …I think this is going to be much further reaching than what we think.

    • Cut in house prices will be the end result however before we see the light there will be massive unemployment.

      As someone else mentioned their wife wouldn’t sell the investments in 2008 and held off until it was too late.

      FOMO has a way of working on the way up and on the way down!

    • Too much of that and you’ll start having an interesting price differential for gold in different parts of the world…. the parts awash with sellers, and the parts awash with buyers.

    • Your comment being the most worthless one on the whole thread. Pray tell us which are the stupid comments, and what’s wrong with them?

  10. ALL of Yours will do for a start – — – – idiotic & stupid. Any more explanations required?

    Now piss off — I’ve better things to do than waste it on fuckwits.

    • What’s the matter, Mr Roolz? The impending Oz’strayan depression making you nervous? It shouldn’t. If you have been paying attention to MB, you would be well prepared. Ha ha!

  11. Hes just a bull with a similar username to mine. We will all dream of home ownership once again! Haha