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sfphoto Post time: 2017-10-23 07:04
I think you're missing the picture.
China only controls its CAPITAL account not those of foreign c ...
He can leave them in the Singapore bank, exchange them for SGD to buy property in Singapore or exchange them for USD to buy property in the USA.
Well I interpreted the topic of this thread as element of internalization of RMB (specifically in oil trade) in such way, that entities in Singapore or USA or anywhere could use RMB as trade currency between themselves, not just with Chinese entities.
In this perspective, I didn't mean current situatiion, but the suggested situation where RMB could be accepted globally, and the Singaporean trader would not need to exchange RMB to USD or SGD to make transaction (capital or otherwise) in any respective country. The RMB would circulate in international financial system as RMB, where it eventually would be invested as capital for industries in which China does not allow direct investment.
I forget if it was you or someone else, who stated that China does not want to see RMB used as currency for speculative or morally questionable investments or trade - and that comment was not about China's closed capital account, but generally about RMB.
For example if a Chinese individual has an offshore enterprise, let's say exporting bottled clean air to China. Or something else totally imaginary, not neccessarily even real items. He would regardless get paid from China in RMB to his offshore account, and then he could invest that RMB to property or whatever abroad.
What function would China's controls on foreign capital investments serve in this situation? Wouldn't they be all to easy to avoid with such setups?
My question is essentially, whether RMB can become international currency (in oil or any other trade), as long as China tries to desperately control its capital account so aggressively?
In the above example, if China prevented the trader from doing "fake" business that way, he would simply ask his Chinese clients to pay in USD instead - so much for internalization of RMB.