Do You Need a Chinese Bank Account?
We’re perfectly happy eating in a Chinese restaurant. But will we start banking in a Chinese bank?
It sounds like a good idea to me. As The Wall Street Journal’s Lingling Wei reported Wednesday, the Bank of China here in the U.S. has started allowing American customers to open an account and to invest up to $4,000 per day—and a total of $20,000 a year—in Chinese yuan, or renminbi. Until now, you had few options to hold money in yuan, which is a “closed” currency managed, and protected, by Beijing.
The bank has three U.S. branches—two in New York, and one in Los Angeles. You’ll have to fill out paperwork to open an account and provide two forms of ID. And there’s a minimum deposit of $500.
Investing in Chinese currency may sound like something best left to speculators. This is a good idea for five reasons:
1) It’s very unlikely to go down.
2) It’s very likely to go up.
3) You won’t miss out on a lot of interest elsewhere, as nowhere else is paying a lot of interest.
4) It will diversify your portfolio.
5) It may offer you and your family something of a hedge against the decline of the U.S. economy.
Holding some money in Chinese currency—as part of a diversified portfolio, is a very safe move for all of us.