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sfphoto Post time: 2017-10-20 19:10
That's called "oil futures" which is a contract to buy/sell/trade oil at a future date at a certai ...
et's it stand in reserve in a depot somewhere while waiting for oil price to go up
But what if the trader does not yet know when to sell, or even what price he is hoping to get. He just wants to hold on to the oil as capital, same way someone may invest in gold or property. I don't believe that oil future or commodities market belong to this picture.
his oil sits somewhere in an oil depot in China.
Also I didn't say that the depot would be in China, it could be anywhere in the world.
real-estate speculation or "flipping" which is restricted by the Singaporean government. There's a hold period for foreigners who buy property in Singapore which would incur a penalty if the buyer sells during that period.
Many countries have a certain period during which the profits from resale of property is taxed heavier, but what if (somewhere, not necessarily Singapore) such penalty would still make the overrall trade profitable.
Anyway, that transaction would qualify as "investment" which affects the CAPITAL account of Singapore which has nothing to do with the CAPITAL account of China.
There are two transactions in this example, one where I purchase the property with RMB, and another where I sell the same property with USD. The first transaction, according to your own statement earlier, WOULD affect capital account of China - since every transaction has two parties. First it's China-Singapore, and then Singapore-USA.
My point is, that if there wouldn' be a "hold period", or it could be ignore, is it (I know it is, my question is actually why it is) still considered capital investment?
But no, they could still use the RMB anywhere foreign banks in foreign countries are willing to accept RMB.
So if some way or another a trader (Chinese or foreign, doesn't matter) ends up with RMB in his foreign bank account, can he use it for capital investment or any other way there, that a foreign bank or some other entity is willing to accept RMB for?
Isn't this a perfect way to circumvent China's foreign investment controls - you just acquire the RMB abroad through regular trade rather than investment, and then you are good to go purchasing property, movie companies, or weapons, as long as the seller is willing to accept RMB?