Take Out Guangzhou Style

Late lunch feast of fish, chicken, tofu, vegetables and rice. All the food groups

These last few days in Guangzhou we've been eating a lot of take-out food. It's not the fast-food variety but somewhat nutritious and definitely Chinese.

My colleague loves ordering take-out whenever he's in Guangdong because it's much cheaper and more varieties than in Hong Kong.

On Wednesday night we finished our work late so we ordered take out as soon as we arrived back at the hotel.

I had fish and pork congee with some choi sum in soy sauce and that came to around 22 yuan. The congee was very good, lots of flavour and almost creamy in texture.

Late dinner of mixed vegetables with rice noodles in soup

The next day we had a late lunch and again ordered several dishes, including Hakka ones, like salt-baked chicken and braised tofu stuffed with minced pork. There was also delicious fish slices in a spicy preserved vegetable broth, braised pig trotters, wood ear fungus with chillis (very spicy!), string beans with eggplant, and soup and rice. For four people it was less than 300 yuan.

We also had a late dinner, and mine consisted of noodles with vegetables like mushrooms, tomato, cabbage and even a quail egg. The noodles were packaged separate from the broth to avoid over cooking them, and the soup didn't have MSG. Only 29 yuan.

Fantastic choices if you have the app and can read Chinese... and have mobile payment! Will be making sure my China assignments are with this foodie...

China Squeezes Outflows to a Drip

Time is running out for Chinese to move stacks of money out of China

It's the news many people in China who are trying to get their money out didn't want to hear.

Starting from January 1, 2018, individuals will only be allowed to withdraw a maximum of 100,000 yuan (US$15,000) a year, regardless of how many separate bank accounts or ATM cards they have, according to a statement by the State Administration of Foreign Exchange.

Under the current rules, there is an annual ATM withdrawal cap of 100,000 yuan per bank card, which is why many people have a number of cards attached to a single account, or multiple accounts with different banks.

While people will be allowed to continue to hold several ATM cards, the annual limit will apply to the combined value of all the withdrawals.

Sounds like cash withdrawals are screeching to a major halt. I can already hear it and it's deafening.

People can only move 100,000 yuan per year out of China

The foreign exchange regulator also warned that if any Chinese is found using mainland bank cards to withdraw more than 100,000 yuan from overseas ATMs within a calendar year, they will be barred from taking out cash abroad using any mainland bank card for the rest of the year -- as well as the following year.

I think I heard another loud screech.

These latest regulations are extremely restrictive, making it extremely difficult for people to make mortgage payments on homes they have bought abroad (if they haven't paid for them in cash already), or pay for children's tuition overseas, or in some cases to launder ill-gotten gains.

The regulator said the restrictions were "a necessary measure" to curb money laundering, terrorism financing and tax evasion."

It added some Chinese have been found to have used a large number of ATM cards to withdraw sums of cash overseas that far exceeded what was needed for "normal consumption", according to the regulator.

What exactly constitutes "normal consumption"? It would be interesting to know what that figure, or range would be...

The foreign exchange regulator also warned Chinese not to try to evade the rules. "People should not borrow other people's bank cards or lend them to others to help get around the regulation," the statement said.

Regardless, people knew these restrictive measures would be instituted in 2018, so there was (some) time to move as much money abroad as they could this year.

Nevertheless, the regulator says 100,000 yuan is plenty of money to spend for those traveling abroad, while "containing the large sums made by a few lawbreakers".

Will we see less mainland Chinese snapping up luxury homes and condos outside of China in 2018? That will be the sign these measures are really effective or not.

Silk Road: Late Night at Kashgar Hospital

The view outside my dad's hospital window of a colourful tower

It was around midnight when we arrived at Xinjiang Kashgar First People's Hospital. We had to have our passports checked at the gate and then our bags screened by X-ray machines.

Turns out we would have to do this every time we went to the hospital, which was twice a day.

Then we went to the emergency room where my dad was lying on a stretcher and he wasn't very comfortable. We took his jacket and tried to make a pillow out of it. Inside the bare room were other patients. To the left was a young man in black curled up in the fetal position with lots of bandages covering his head.

Outside the room a young mother was wheeling her young daughter on a stretcher. The girl, about six or seven years old, was naked from the waist down and her right leg was severely bruised. It didn't look too good.

An ATM machine with cameras above

We were trying to keep my dad entertained while my mom, our doctor friend and the tour guide went to the doctor's office. The doctor was Uyghur and so the guide acted as a translator, explaining each step of the surgery, the surgeon even drew a diagram showing how he would drill holes in my dad's head to drain the blood from the clot.

Then we had to get dad's paperwork done to have him admitted but more importantly to pay the hospital 10,000 yuan (US$1,506) in cash right away. My mom went to the Bank of China ATM and thank goodness was able to withdraw cash. She could only do it in increments of 3,000 yuan which mean withdrawing at least four times.

We wheeled my dad across the hospital compound into another building -- again we went through security checks before he was put into the elevator to the seventh floor -- the neurology ward.

The nurse asked us if we had paid yet and we replied we were in the process of doing that, but she still wouldn't wheel him into the room until she'd seen the receipt. It was that bureaucratic.

Finally the payment was sorted and dad was wheeled down the hall then to the left.

The Han Chinese nurse flicked on the flourescent lights of a semi-private room (no private rooms exist in the hospital unless you're a VIP on the top floor of the hospital). In the bed closest to the door was a young Uyghur man with bandages around his head, while in the other bed was a woman, his wife.

The nurse shooed the woman out of the bed and forced the bleary-eyed Uyghur woman to help put fresh bedding on the bed my dad would be lying on. Then he was transferred from the stretcher to the bed.

At the foot of the bed was a bare bones metal frame cot with bamboo slats with a thin mattress and lump pillow. We were told that since we were foreigners they would let us use the cot free of charge -- usually others would have to pay to rent it on a daily basis.

My dad was given pyjamas but they didn't fit -- we would later find out we had paid a 100 yuan deposit on them.

Another Uyghur doctor who spoke some Mandarin asked us more questions, the answers he entered in the computer, like how many children does my dad have, what medications is he taking, when was his last surgery.

We were told by hospital staff that one family member would have to be there for the night, and my aunt, my mom's younger sister, immediately volunteered. She insisted, saying surgery would be the next day and that we needed to rest. We also gave her the authority to sign all the papers the next morning for the surgery to go ahead.

But it would be a sleepless night for her having to tend to my dad's needs, while we went back to the hotel before 4am. Our tour guide was amazing, there the whole time, translating and advising us on how hospitals work here.

I didn't get much sleep -- at one point I woke up crying and scared, trying to process what was happening and wondering if things would be OK.

China Names and Shames Outrageous Capital Outflows

People and companies have creative ways to get money out of China

The State Administration of Foreign Exchange (SAFE) in China has uncovered some creative ways people and companies are moving money out of the country.

It released a list of 10 top covert cases, naming and shaming five companies, accusing them of forging contracts or invoices to remit a combined US$226 million offshore since 2015.

One of the alleged offenders was Ningbo Big Fortune International Trade, which SAFE claimed colluded with several overseas companies, forged trade contracts, inflated prices to 5-20 times the market price, and moved US$119 million overseas between August and September 2015.

The Chinese government is still trying to stem capital outflow

As a result the company was fined 22.8 million yuan for "seriously disturbing foreign exchange market order".

Sounds intense if the withdrawals disturbed "foreign exchange market order"...

There were five individuals who were also fined for moving up to US$4.35 million through underground banks to their foreign accounts.

In one case, a Guangdong resident enlisted 84 people to use each of their US$50,000 annual foreign exchange purchase quota to remit US$4.35 million to his own accounts in Australia and Hong Kong from December 2015 to January this year. He was fined 1 million yuan, according to SAFE.

But how else is someone supposed to move money overseas if they want to buy property or a company when they have the money? It's not like he stole it, though getting 84 people to help out is excessive.

Beijing continues to be concerned about capital outflows and regulators are discouraging companies from too much outbound investment and tightening checks on people exchanging foreign currency.

The extensive impact has led to the devaluation of the yuan

From July 1, the government will also tighten rules for banks to report cross-border customer transactions to curb money laundering and funding terrorism. That's a good cover to try to stem money from flowing out -- but will it?

Li Youhuan from the Guangdong Academy of Social Sciences, said capital outflow was undeterred by stricter scrutiny "given the robust business I've seen by underground banks".

"Measures to hold back company transactions definitely cannot work," he said. "Such demand cannot be eliminated as long as China opens its door to trade and exchange with other countries."

Finance professor Zhao Xijun at Remin University seems to think SAFE is sending a message of punishment, that financial institutions will be held responsible if they collude.

However, Andrew Collier of Oriental Capital Research says it's impossible to stop capital outflow altogether because companies need to conduct external transactions.

"I expect China will need to depreciate the currency in 2018 to reduce the pressure on capital flows," he said.

Will that be when US President Donald Trump will brand China as a "currency manipulator"? China seems to have too many domestic financial problems of its own to worry about what The Donald says...

Number of the Day: HK$10 Billion

Macau seems to be another place for mainlanders to move their money

That is the amount of money that is withdrawn from ATMs in Macau per month.

Per month!

And the banks have received instructions to make sure these automatic teller machines never run out of bank notes too.

The 1,300 machines around the former Portuguese enclave are monitored 24 hours a day, and if they start getting low, a team is ready to refill them with more cash.

Looks like Macanese ATMs are another avenue for capital outflows.

What's also interesting is that since December last year, the maximum amount of withdrawals dropped from 10,000 patacas to 5,000 patacas, but that doesn't seem to have prevented mainlanders from getting money out.

Facial recognition technology will soon be installed at ATMs

There are reports that mainland racketeers use hundreds of bank cards to withdraw cash from Macau ATMs as part of a multi-million-dollar foreign exchange scheme.

In one case last January, the court heard evidence that one couple used 402 cash card accounts to make withdrawals from Macau ATMs as part of a 105 million yuan illegal foreign exchange racket.

A similar case in the same court last October had evidence showing 222 cash card accounts were used by a gang to make ATM withdrawals in the casino hub as part of a 139 million yuan foreign exchange scam.

Another interesting statistic is that the number of ATMs in Macau has quadrupled since the gaming industry was liberalized in 2001.

Either local Macanese like playing with ATM machines, or they are specifically geared towards mainlanders.

But maybe it'll be game over soon, as facial recognition technology will be used to scan millions of bank card users at ATMs in Macau.

The Macau government said all holders of mainland-issued China UnionPay bank cards "will be require to scan their mainland identity card and undergo a facial recognition check".

Officials did not have a time frame when the new scheme would be implemented, but one can imagine even more cash is being withdrawn now as we write this.

The vast majority of visitors to Macau are from mainland China at 30 million last year, 20 million of which were from Guangdong province.

The Chinese government is desperately trying to stop capital outflows any way it can, and yet people still find a way to get their money out. It is normal for people on the mainland to have a number of bank accounts, so facial recognition may not be all that helpful.

This cat and mouse game will continue, and Beijing might be the loser in the end.

Laobaixing Capital Outflows

Chinese nationals can only take out US$50,000 per year

I caught up with several friends in Beijing, both locals and expats, and the big issue for them was getting money out of China.

In the news Beijing is trying to stop capital outflows in the hundreds of billions of dollars. While one might think this mostly applies to large companies, it affects ordinary people, or laobaixing too.

My expat friend was having a hard time because his wife who is Chinese, has a fledgling business in the Chinese capital and they have to pay suppliers up front who are outside of China. They try to wire the money out, but their bank stops them, saying they aren't allowed to do this transaction. He says it's random -- sometimes it works, sometimes it doesn't.

And then for my local friends, getting money out has become a big obsession. Over lunch two of them were excitedly going over ways, from buying up US dollars and even the pound Sterling -- they think it'll go up after Brexit (?!), and even going to Hong Kong to buy life insurance.

Locals are anxious to get their money out of China

"Buying life insurance products there aren't just for life insurance -- it's an investment vehicle," one said.

Then during dinner with another friend, she announced to me that she had bought a condo in Toronto -- and her husband didn't even know about it!

She doesn't even know where in Toronto it is, but it was her second best choice after Vancouver made it harder for foreign investors to buy property. "Maybe when my daughter grows up she can go to school in Toronto and live in the apartment," she said.

This friend used to work in state media and now works for one of the big Chinese internet companies, and so her salary must be exponentially larger than what she used to earn 10 years ago when I met her.

That on top probably extra money from her parents has enabled her to invest abroad.

And she's only 30.

I asked all these friends why they were so concerned about getting money out of China, and they said they didn't have confidence in the government.

They also said the yuan was depreciating and so they wanted some guarantee for their hard-earned money.

But it is a vicious cycle -- the more people invest in foreign currencies, the further the yuan depreciates, and that makes them even more worried, and they continue to exchange more money.

Beijing is very anxious about the situation. Currently each person can take out a maximum of US$50,000 per year. That will be halved next year.

These further restrictions are making people even more anxious, and there's no end in sight...

China is Open for Business

Chinese President Xi Jinping addresses the World Economic Forum in Davos

Xi Jinping is the first Chinese President to address the World Economic Forum, and today he used the platform to take the high road, making the case for globalization in a time when the UK will implement Brexit and President-Elect Donald Trump advocates isolationism.

In his speech, Xi promised to improve market access for foreign companies, and said China has no intention of devaluing the yuan or launching a currency war.

He said protectionism had to be opposed and the finger-pointing stopped.

"Those who push for protectionism are shutting themselves inside a dark house. They have escaped the rain and clouds outside, but also missed the light and air," he said. "A trade war will only lead to suffering on both sides."

Xi says China is open to foreign companies... really?

Since his predecessor Hu Jintao's leadership, China has been protectionist too, making it harder and harder for foreign companies to do business in the Middle Kingdom. And with the further media suppression on foreign journalists and outlets, people on the outside find it harder to get the information they need to objectively assess the situation.

So if Xi really does keep his word, it will be interesting to see China open its doors for more business -- but are companies willing to pay higher wages for labour? And will this still be cheap manufacturing, or something higher up the manufacturing chain?

In addition, Xi said there was no point in blaming globalization to the Syrian refugee crisis or the 2008 financial crisis. He said there was "no justification for wiping out economic globalization all together".

How does the Syrian refugee crisis have anything to do with globalization, when it's a civil war in the country?

What kind of president will Donald Trump be?

Nevertheless, it seems Xi is keen to stimulate his country's economy -- apparently it grew just over 6 percent in 2016 -- and perhaps get rid of its overproduction.

As the inauguration of Trump drawer closer, many are trying to come to terms with the new normal in Washington. Will he continue to see it as one big reality show in the White House, or will he really take the job seriously and help those who voted him into office?

Xi is probably looking on horrified at having to deal with a man who makes knee-jerk pronouncements that may or may not have substance. However, he is probably impressed by how Trump handles press conferences by shutting reporters down...