Consider an Offshore Bank Account in Mainland China

Consider an Offshore Bank Account in Mainland China

Americans might be justifiably worried about their own government, but for many non-Americans, the US is a place to keep all sorts of legitimate or illegitimate money for safe keeping. Which country can twist the arms of the US? Far from the control of their own governments, Ecuadorians, Russians, and Chinese quite understandably find the US a safe place to park their money.

In designing a stock portfolio, in the game of chess, and in securing your life, you must play scenarios and look for options and diversification strategies that give you the best benefits, not only in terms of the upside, but also in terms of survival.

You must stress-test your affairs. There is no guarantee of success, but all you can try to do is to not only improve the probabilities, but also to minimize the impact of tail risks, which, as Nassim Taleb showed, are not all that uncommon.

If you’re an American, as a part of your diversification needs you should consider jurisdictions where the heavy hand of the US does not work. The competitor or enemy of your government could be your diversification friend.

It is well known that holding uncorrelated asset classes in our investment portfolio gives diversification benefits. In the same sense, diversifying among competing or rival countries or jurisdictions helps to maximize freedom by mitigating political risk.

What’s important is not so much the overall nature of the jurisdiction we’re looking at, but how it can be beneficial to us to optimise the design of our own life.

Does it meet some of the requirements that we’re looking for?

If a society offers social cultural environment conducive to your taste, but not security of your wealth—as might be the case with Argentina—perhaps you would live there, but keep your money outside it.

So, let’s talk about a jurisdiction that virtually all miss, which—contrary to popular belief—is not a police state (certainly not for foreigners who have no political agenda), has no grand imperial ambitions (again, contrary to popular belief), and where the rule of law seems to work.

That country is China.

China has also been in the news recently because of the Edward Snowden saga. While Hong Kong has an extradition treaty with the US, mainland China notably does not.

Whatever your views on the future growth rate of China and whether what it claims as its GDP is exaggerated or not, the fact is that China is real. Cranes, factories, markets, and their infrastructure provide quick evidence to a visitor. You witness changes happening even in the hinterland. Or perhaps just look at the label of goods you own—a lot of them will likely be made in China. And the Chinese aren’t just sitting on the money they earn by being the world’s manufacturer. You’ll likely find the Chinese buying properties and businesses near your hometown.

Almost two decades after the handover of Hong Kong and Macau, China has still more than maintained its agreement with its former colonial rulers and remained a responsible steward. One result is that the world’s capital moves to Hong Kong for safety.

Not only is your capital free and safe in Hong Kong, but you also have full freedom of speech, including the possibility of speaking against China. Macau has become the casino playground of the world. If China didn’t have any respect for the rule of law, Hong Kong and Macau wouldn’t have continued to develop as they have since the handovers.

Indeed, despite the negative reputation that the Western governments have built of China, there’s a large community of Americans who now live and work in China. I’ve known a lot of them for many years. They do complain about the quirks of Chinese, but they find themselves living a relatively free life.

Opening a bank account in China is mostly a breeze.

Most mainland Chinese banks will let foreigners open a bank account—even Americans, as trusted friends have attested to. They haven’t yet fully adopted the client-repelling habits of banks elsewhere. You will likely not even be cursorily asked why you want an account. They want customers and treat them with respect. As a foreigner, you will be ensured of especially nice treatment.

A passport is usually enough. They will likely accept a foreign address for communication with you. Carrying a proof of this would help, but usually is not necessary. It might even help to know someone in China who can accept your initial mail from the bank—again not usually necessary. A few dollars’ worth of renminbi will do for the minimum deposit.

With this preparation, try:

Be mindful of the fact that even in big cities, you won’t always find an English-speaking agent. So, look for a branch in an area frequented by expatriates. It’s preferable to use a major bank that provides an English-language interface for the Internet.

Of course, the rules might change, so nothing is guaranteed.

China has recently removed visa requirement for a three-day transit stay for most countries (the US, most of Europe, Canada, Australia, and others), making it possible for you to quickly stop over and open an account.

Another possibility is to try the offices of a mainland bank in Hong Kong and elsewhere. They might be happy to do the needed paperwork to open an account with their corresponding bank in China.

Don’t let the “communist” label put you off about China. It’s one of the most capitalistic countries anywhere, so don’t forget China when formulating your diversification strategy. It’s not only a country where—at least for me as an outsider—the rule of law works very well, but is also a rare country whose arms the US cannot easily twist.

See here for the top 10 reasons why you need an offshore bank account. 

Jayant Bhandari is constantly traveling the world to understand it and to look for investment opportunities, particularly in the natural resource sector. He advises institutional investors about his finds. He also runs a yearly seminar in Vancouver titled “Capitalism & Morality.” Find him at

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