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andyfff
Rocker
Joined: July 03, 2005
Posts: 683
Status: Offline
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 Posted:
May 25, 2007 - 12:46 PM |
 
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| Post subject: can foreigners buy stocks and what about taxes? |
Does anybody know if foreigners can purchase stocks or mutual funds in China? And if so, do we pay taxes on the profits like in the USA? Would we have to report these profits to the government, or would the brokerages do that for us? Would we pay taxes in China AND in the US?
Just curious... |
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andyfff
Rocker
Joined: July 03, 2005
Posts: 683
Status: Offline
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May 25, 2007 - 01:35 PM |
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and also, is the Shanghai index a separate entity from other inexes? How many different entities exist in China to buy stocks from? |
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saleenr6
Barker
Joined: June 22, 2004
Posts: 176
Location: Shanghai
Status: Offline
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May 25, 2007 - 02:37 PM |
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Don't worry, you can't buy it. You have to have a Chinese ID
I use my Cousin's account to trade in the shanghai index. Its great. NO TAXES, only a commsion fee for the trade. Zero Tax. i love it.
James |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 26, 2007 - 09:00 AM |
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You only need Chinese ID to buy stocks (A Shares), but you do not need one to buy mutual funds. |
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bougie
Board Buddha
Joined: Nov 20, 2004
Posts: 13323
Location: Wuhan Hubei China
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May 26, 2007 - 09:03 AM |
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Anyone know a convenient website (i guess english is out of the question) to check on stocks ? |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 26, 2007 - 09:11 AM |
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Yeah, I think English is out of the question.
But for a not so difficult to navigate one in Chinese, try:
http://www.lhzq.com/index.jsp
Just type the stock code in the little box on the top right-hand corner and then click <Go>. |
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bougie
Board Buddha
Joined: Nov 20, 2004
Posts: 13323
Location: Wuhan Hubei China
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May 26, 2007 - 09:18 AM |
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wolfy
Fire-eater
Joined: Sep 13, 2004
Posts: 2510
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May 26, 2007 - 11:11 AM |
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busyexpat
Talker
Joined: May 20, 2005
Posts: 101
Location: Hong Kong
Status: Offline
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May 26, 2007 - 04:29 PM |
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Andy, you might find this a good read and should answer many of your questions: "China's Stockmarket: A Guide to its Progress, Players and Prospects" by Stephen Green |
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Greenmonkey.com.cn |
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lucyna
Veejay
Joined: Aug 03, 2006
Posts: 2166
Status: Offline
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May 26, 2007 - 08:59 PM |
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| Post subject: Re: can foreigners buy stocks and what about taxes? |
| andyfff wrote: |
Does anybody know if foreigners can purchase stocks or mutual funds in China? And if so, do we pay taxes on the profits like in the USA? Would we have to report these profits to the government, or would the brokerages do that for us? Would we pay taxes in China AND in the US?
Just curious... |
Yes, you can. I think it's called H ...
Of course you have to pay some tax and fees. |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 26, 2007 - 09:08 PM |
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There are no "H" shares on the Mainland. "H" shares are on the Hong Kong Exchange. Anybody can buy them. In China, a foreigner can buy "B" shares that are denominated in US$. There are no taxes. |
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g-force
Barker
Joined: Apr 07, 2007
Posts: 127
Location: Shanghai
Status: Offline
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May 26, 2007 - 09:25 PM |
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There seems to be a theory on the street that China will eventually merge the A and B shares when they are about equal. Since B shares have not gone up as much as A shares, local people are rushing to buy B shares. This is not a endorsement on buying anything, as I don't have any money in China stock market. |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 26, 2007 - 09:31 PM |
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If they merge the A shares and the B shares then one of two things can happen:
1. Foreigners will be able to buy A shares; or
2. Foreigners will lose the right to own B shares. |
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pat_togo
Raver
Joined: Feb 22, 2005
Posts: 403
Location: Pudong & Hongkou, Shanghai
Status: Offline
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May 26, 2007 - 09:38 PM |
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Chinese stockmarkets are bound to crash and the recent run do not reflect the market fundamentals, instead has been fuelled by the fast entry of liquidity. It can't just go up forever. So beware! But of course when you see companies shares rising by as much as 100% in just a few months it is tempting to enter, as it is the case of many mainlanders who are spending their savings, taking loans against their properties etc to buy stocks. No one wants to be left out of the Gold rush!
Foreigners in China can buy USD-denominated B-shares. Most brokerage firms have free tracking softwares but unfortunately I haven't seen one in English. I use some to get the latest information on firms that I cover and I find it quite instructive.
Another way to "buy" into the Chinese market growth is to purchase shares of the Chinese companies listed in HK or other major stock exchanges. Although those are supposed to be the cream of the domestic companies, you won't expect a 100% increase in a few months. This make you think about how sustainable is the growth on the Shanghai and Shenzhen stock markets... |
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Sinoinvest.biz-Offshore Company Registration (BVI, HK etc.) & China Company Formation |
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g-force
Barker
Joined: Apr 07, 2007
Posts: 127
Location: Shanghai
Status: Offline
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| Posted:
May 26, 2007 - 09:50 PM |
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Foreigners have been arguing for years to merge A, B, and H shares. But decisions like this generally are made in secret by the central government. How and when they make this decision is anybody's guess. |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 26, 2007 - 09:52 PM |
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| Quote: |
| Chinese stockmarkets are bound to crash and the recent run do not reflect the market fundamentals, instead has been fuelled by the fast entry of liquidity. It can't just go up forever. So beware! But of course when you see companies shares rising by as much as 100% in just a few months it is tempting to enter, as it is the case of many mainlanders who are spending their savings, taking loans against their properties etc to buy stocks. No one wants to be left out of the Gold rush! |
Tell us something that we don't know already. 
Depending on the type and degree of government intervention, the bull market can last years longer. Or it can crash tomorrow. |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 26, 2007 - 09:55 PM |
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| g-force wrote: |
| But decisions like this generally are made in secret by the central government. How and when they make this decision is anybody's guess. |
Truer words were never spoken!  |
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wolfy
Fire-eater
Joined: Sep 13, 2004
Posts: 2510
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May 27, 2007 - 08:35 AM |
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| Post subject: Re: can foreigners buy stocks and what about taxes? |
| lucyna wrote: |
Yes, you can. I think it's called H ...
Of course you have to pay some tax and fees. |
Dont be stupid.
| pat_togo wrote: |
| Most brokerage firms have free tracking softwares but unfortunately I haven't seen one in English. |
Are you blind?
http://investing.reuters.co.uk/investing/FinanceMarketsChain.aspx?sym= cn!SHI
| underh20 wrote: |
| Depending on the type and degree of government intervention, the bull market can last years longer. Or it can crash tomorrow. |
Nowt like hedging you bets there undy. Dope. |
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Good old English spirit! http://www.youtube.com/watch?v=7MG27BKwjaI |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 27, 2007 - 09:23 AM |
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Just when you think you don't need your Literacy Volunteer any longer, looks what comes back to bite you in the a$$, Woofy. 
This quote was in response to Pat-Togo's brainstorm. Or did your Literacy Volunteer also teach you that special math that allows you to predict stock market fluctuations.
Dummy. |
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pat_togo
Raver
Joined: Feb 22, 2005
Posts: 403
Location: Pudong & Hongkou, Shanghai
Status: Offline
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May 27, 2007 - 10:49 AM |
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To Wolfy:
I was referring to local brokerage firms (中信证券，上海证券 etc.)
To Underh20
I was not replying to u. What is obvious to u may not be to other people. All of us come here to learn and share. As far as I remember this is a public forum if u don't find a value in someone's posting u just go the next u don't need to be sarcastic.
Pat |
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Sinoinvest.biz-Offshore Company Registration (BVI, HK etc.) & China Company Formation |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 27, 2007 - 11:28 AM |
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Ok, I'll try not to be sarcastic if you try not to be stupid. Deal? |
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HoboJuice
Veejay
Joined: Feb 26, 2007
Posts: 1954
Status: Offline
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May 27, 2007 - 11:37 AM |
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and i thought the singles channel needed moderation lol.
seriously tho, why won't the chinese government step in with measures now? a large crash now beats a huge crash later. Are there even any safe investment opportunities left to put the RMB? |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 27, 2007 - 11:52 AM |
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Nobody knows why the government doesn't step in with more drastic measures. They've adjusted interest rates and bank reserve requirements several times, yet it doesn't seem to cool the market. Perhaps they will just let nature take its course as they did several years ago when things got out of hand and the market took a nose dive. Actually, most real analysts and even Alan Greenspan say that the market is forming a bubble, but they don't predict a serious crash but rather an adjustment. There are, however, other experts who predict that there is no bubble. The Chinese stock market is nothing near as crazy as the Russian stock market or even, at times, the Taiwanese stock market.
Safe investments? Probably the safest would be government bonds. The return rate isn't very great, but at least it is higher than normal savings accounts and tax-free. Mutual funds seem like a good bet. I would be careful, though, and only buy into funds that have reputable fund houses behind them and have a long history of stable operation. Over the past two years mutual funds have continued to rise in spite of occasional downward fluctuations in the stock market.
Also, many banks have a kind of investment vehicle that offers you a fund environment for purchasing IPOs. These have historically been safe and the return is usually better than government bonds (albeit not as safe). |
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wolfy
Fire-eater
Joined: Sep 13, 2004
Posts: 2510
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May 27, 2007 - 12:18 PM |
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The government needs to develop the bond market, pension funds, the insurance market and alternative forms of investment. Right now there’s too much money floating around the economy with nothing to do except chase a handful a so-so companies or purchase property – too much money chasing too few assets. The government can’t very well bring in interventionist measures because makes a mockery of the whole market internationally and should the market fall and the government props it up, people will keep investing because they know government will always bail them out so they’ll keep throwing their money at crap firms that couldn’t survive in the real world. Their share prices won’t reflect anything like their intrinsic value (not they do at the moment) and the whole system implodes. As undy said, the govt has let nature take its course safe in the knowledge that a crash will have very little impact on economic growth anyway.
My two penneth worth. |
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Good old English spirit! http://www.youtube.com/watch?v=7MG27BKwjaI |
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underh20
Shanghai Royalty
Joined: Sep 27, 2006
Posts: 9887
Location: EOA Seminar
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May 27, 2007 - 12:46 PM |
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^ I think you've made some very accurate points, Wolfy.
The only stocks I feel that are close to their real value would be some of the bank stocks. And even then.
An interesting case is that of the Chinese Moutai company. It's stock was a darling of investors until suddenly, albeit not too surprisingly, the CEO was busted for skimming off millions and for receiving illegal kickbacks. The stock dropped about 10%, but now seems on its way up again. Investors here have too much money. Someone needs to relieve them of it. |
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