China Threatens Overseas Tax Havens, Will Investors Flock to Crypto?

[oksgvardukraine2018]

China Threatens Overseas Tax Havens, Will Investors Flock to Crypto?
Since early 2018, the government of China has tightened policies targeting millionaire investors in the country holding their wealth overseas to avoid large taxes, and it may lead local investors to alternative assets like crypto.

Chinese investors rely on the Swiss offshore banking industry, Hong Kong real estate market, and foreign stock markets to hoard millions of dollars worth of properties, assets, and cash outside of mainland China.

But, local financial authorities have started to crackdown on investors that amass significant wealth in overseas markets.

Will Investors Move to Crypto? https://www.ccn.com/china-threatens-overseas-tax-havens-will-investors-flock-to-crypto/


Blockchain is an open ledger! And if you manage to prove the connection between a person and a wallet, then all his money will be in full view.

[Hydrogen]

I think china is desperate after tariffs introduced on their trade by Trump. Now they're resorting to more desperate measures. This could illustrate one key issue with socialism whereby the most intelligent or creative individuals are typically not appointed to positions of power. Instead the party rewards loyalty. This can leave state hierarchies lacking in terms of problem solving capacities when it comes to unforeseen circumstances.

Studies claim taxation is a counter intuitive process. Raising taxes and introducing harsher restrictions on taxation can increase incidence of tax avoidance based on the principle that the more unfair taxes are deemed, the more unlikely people are to pay them. This might be illustrated in Trump's tax plans whereby overall tax revenues were increased via introducing tax cuts to corporations.

This type of heavy handed authoritarian approach whereby totalitarian states *crackdown* on tax havens can have significant long term negative implications in terms of alienating investors and the class of demographic which contributes significantly to economic investment and growth.

AFAIK china and the existence of its "great firewall" means internet anonymization services like VPNs and TOR are standard fare for many businesses and individuals operating out of china. Due to china's media being state owned its difficult to say what success or failure china has experienced over the long term with these types of programs or ones which attempt to crackdown on things like tax shelters. I would have to guess most chinese saw these types of authoritarian measures coming since Xi Jinpeng was appointed "dictator for life" over china and must have prepared accordingly. Who can say for sure.

Crypto is certainly one option available. China's appetite for business and growth could easily lead to under the table arrangements whereby crypto is exchanged for other currency, despite state imposed bans or crackdowns. Its difficult to say what shape the future will take, someone once said the best way to predict the future is to invent it. Lacking this option, we'll have to wait awhile to see how things pan out.

[Ycekezuv]

No wonder, in my opinion, the Chinese were not going to do any sort of relief in regard to cryptocurrencies!

[Renaldi blackspadeteam]

if a Chinese investor hides treasures in Crypto in large amounts to avoid taxes, it will certainly affect Crypto prices, I think 100 million dollars is enough to raise crypto prices

[Baofeng]

China Threatens Overseas Tax Havens, Will Investors Flock to Crypto?
Since early 2018, the government of China has tightened policies targeting millionaire investors in the country holding their wealth overseas to avoid large taxes, and it may lead local investors to alternative assets like crypto.

Chinese investors rely on the Swiss offshore banking industry, Hong Kong real estate market, and foreign stock markets to hoard millions of dollars worth of properties, assets, and cash outside of mainland China.

But, local financial authorities have started to crackdown on investors that amass significant wealth in overseas markets.

Will Investors Move to Crypto? https://www.ccn.com/china-threatens-overseas-tax-havens-will-investors-flock-to-crypto/


Blockchain is an open ledger! And if you manage to prove the connection between a person and a wallet, then all his money will be in full view.

Yes, I agree this is a desperate moved from the government going on a witch hunt against Chinese choosing to go offshore to "hide" their wealth. And I also have no doubt that smart Chinese investors are now going full crypto as Store of Value (SoV) to get away from the prying eyes of the government, or maybe even opting to go and live outside if things goes from bad to worst. There's a theory that there's some correlation between a country's financial and political issues and crypto having a good pump, and maybe this is another case.

[Maheshkumar_Hrangkhawl]

As long as the Chinese government decreases the value of the Yuan every two weeks, people will continue to hide their assets. If they stop one avenue (such as overseas tax heavens) then some other avenue will be open.

[BruceJu]

I think china is desperate after tariffs introduced on their trade by Trump. Now they're resorting to more desperate measures. This could illustrate one key issue with socialism whereby the most intelligent or creative individuals are typically not appointed to positions of power. Instead the party rewards loyalty. This can leave state hierarchies lacking in terms of problem solving capacities when it comes to unforeseen circumstances.

Studies claim taxation is a counter intuitive process. Raising taxes and introducing harsher restrictions on taxation can increase incidence of tax avoidance based on the principle that the more unfair taxes are deemed, the more unlikely people are to pay them. This might be illustrated in Trump's tax plans whereby overall tax revenues were increased via introducing tax cuts to corporations.

This type of heavy handed authoritarian approach whereby totalitarian states *crackdown* on tax havens can have significant long term negative implications in terms of alienating investors and the class of demographic which contributes significantly to economic investment and growth.

AFAIK china and the existence of its "great firewall" means internet anonymization services like VPNs and TOR are standard fare for many businesses and individuals operating out of china. Due to china's media being state owned its difficult to say what success or failure china has experienced over the long term with these types of programs or ones which attempt to crackdown on things like tax shelters. I would have to guess most chinese saw these types of authoritarian measures coming since Xi Jinpeng was appointed "dictator for life" over china and must have prepared accordingly. Who can say for sure.

Crypto is certainly one option available. China's appetite for business and growth could easily lead to under the table arrangements whereby crypto is exchanged for other currency, despite state imposed bans or crackdowns. Its difficult to say what shape the future will take, someone once said the best way to predict the future is to invent it. Lacking this option, we'll have to wait awhile to see how things pan out.

I think your point of view is superficial. You may not understand the mysteries of the world. I think the trade war initiated by Trump is exactly what China wants to see. Are you a working class in the United States? Trump only pays attention to the present, and the United States will lose to China in the future.

[rickadone]

China became a world power by mainly manufacturing and making everything cost fraction of what it used to be I get that and right now almost all the world owes them money because people have been getting stuff done in china since its cheaper than in any country but don't you start to feel that china has started to abuse that power ?

I understand they have trillion of dollars they need to collect from other countries but does that give them legit powers to do stuff like these? I mean I agree that overseas tax havens are a horrible thing but what will draw the line? How about an American company doing work in china using American bank ? Will that be "overseas tax haven" ?

If you keep companies tied to china one way or another and not let them work with their own countries I am pretty sure you will be the one who lose because people will be scared and leave eventually.

[arbifahrozy]

It seems that the Chinese policy strictly prohibits the use of wealth outside of China, indicating that the Chinese government is aggressively improving the economy and corruption in China. especially with the existence of crypto, the rich dichina could accumulate his wealth in crypto .

[figmentofmyass]

This might be illustrated in Trump's tax plans whereby overall tax revenues were increased via introducing tax cuts to corporations.

source? it's too early to conclude anything since the plan didn't go into effect until 2018. we haven't even completed the tax year yet.

the bush corporate tax cuts did the exact opposite---failing to spur productive growth, we saw a huge budget surplus under clinton turn into a huge and perpetual budget deficit under bush.

Crypto is certainly one option available. China's appetite for business and growth could easily lead to under the table arrangements whereby crypto is exchanged for other currency, despite state imposed bans or crackdowns.

theoretically it could, but it really depends how much effective liquidity there is in the market. the market for chinese capital flight makes bitcoin liquidity look like a drop in the bucket.

[yoseph]

It seems that the Chinese policy strictly prohibits the use of wealth outside of China, indicating that the Chinese government is aggressively improving the economy and corruption in China. especially with the existence of crypto, the rich dichina could accumulate his wealth in crypto .

I think the government thought about everything that’s why they moved ahead to ban cryptos in China in the first place but I fail to see how they are going to threaten the TAX havens.

[RBEP-RBC]

It seems that the Chinese policy strictly prohibits the use of wealth outside of China, indicating that the Chinese government is aggressively improving the economy and corruption in China. especially with the existence of crypto, the rich dichina could accumulate his wealth in crypto .

I think the government thought about everything that’s why they moved ahead to ban cryptos in China in the first place but I fail to see how they are going to threaten the TAX havens.

Agreed. They see the ability of the US/IRS to tax their citizens' assets/income globally due to the dollar-based intl banking system and want the same power. Chinese law already states that they can tax assets/income globally but they have no way to enforce it, especially in tax havens. I imagine their only recourse is some sort of extra-legal method where they *somehow* identify foreign assets and use domestic pressure (on the targets' domestic business, assets, etc) to get targets to pay up. That seems like a lot of work and probably only realistic for the top offenders. Still, I wouldn't want to be on the top of that list.

[clonely]

Every day from China, different news began to come. I wonder what will happen in the end. It is a fact that if China goes to prohibition, we will all suffer.

[nazaididuan1]

Restricting the flow of funds from China to overseas may hurt individual investors who hold large amounts of overseas assets and overseas savings account cash.
The cryptocurrency remains the only alternative currency outside the stock market that can be heavily invested by local investors.

[dothebeats]

Crypto might be another avenue to avoid harsh tax rules, but once the Chinese government knew about this possibility, see how tight they can get by also suppressing exchanges for trade history of their citizens. Right now the Chinese government is being too unpredictable and unstable, up to the point that their millionaires and billionaires are being affected. I couldn't blame them, though, seeing that a lot of possible tax is just sitting idly at Swiss bank accounts and foreign investments instead of paying their dues on our soil, but this should not, in any way, warrant such invasive actions towards their citizens who wanted to have some assets in foreign countries.

If these same investors were to hop in on the crypto train, it might bring a lot of volatility in the market after a steep rise. They'd just lose money in the process, and the ones who got out first of the mess will be the winners and seek for other ways to circumvent foreign tax rules of their country.

[tadpole_bitfrog]

China Threatens Overseas Tax Havens, Will Investors Flock to Crypto?
Since early 2018, the government of China has tightened policies targeting millionaire investors in the country holding their wealth overseas to avoid large taxes, and it may lead local investors to alternative assets like crypto.

Chinese investors rely on the Swiss offshore banking industry, Hong Kong real estate market, and foreign stock markets to hoard millions of dollars worth of properties, assets, and cash outside of mainland China.

But, local financial authorities have started to crackdown on investors that amass significant wealth in overseas markets.

Will Investors Move to Crypto? https://www.ccn.com/china-threatens-overseas-tax-havens-will-investors-flock-to-crypto/


Blockchain is an open ledger! And if you manage to prove the connection between a person and a wallet, then all his money will be in full view.

I think they will do it to reduce the tax. Blockchain really help a lot in some things but also will affect a lot to some things. But this is a great technology. I hope to have someone create a new blockchain technology and will minimize the negative things that Blockchain is bringing to the world.

[dlancashire]

No-one in this thread has mentioned the massively over-valued real-estate markets in most Chinese cities. It would not surprise me to see them melt at least partially into crypto.

[figmentofmyass]

No-one in this thread has mentioned the massively over-valued real-estate markets in most Chinese cities. It would not surprise me to see them melt at least partially into crypto.

you could say the same about real estate markets in the USA---new york, san francisco, LA, seattle. in fact, this is relevant, because chinese investors have long been buying up west coast urban real estate and parking money there.

rental prices have more than doubled and new houses tripled/quadrupled where i live, over a decade. why should we expect that money to go into crypto? real estate is usually viewed as a safe, non-volatile asset---people that want such assets probably don't want to put that money into speculative, volatile markets like cryptocurrency.

[gabmen]

China Threatens Overseas Tax Havens, Will Investors Flock to Crypto?
Since early 2018, the government of China has tightened policies targeting millionaire investors in the country holding their wealth overseas to avoid large taxes, and it may lead local investors to alternative assets like crypto.

Chinese investors rely on the Swiss offshore banking industry, Hong Kong real estate market, and foreign stock markets to hoard millions of dollars worth of properties, assets, and cash outside of mainland China.

But, local financial authorities have started to crackdown on investors that amass significant wealth in overseas markets.

Will Investors Move to Crypto? https://www.ccn.com/china-threatens-overseas-tax-havens-will-investors-flock-to-crypto/


Blockchain is an open ledger! And if you manage to prove the connection between a person and a wallet, then all his money will be in full view.

I think they will do it to reduce the tax. Blockchain really help a lot in some things but also will affect a lot to some things. But this is a great technology. I hope to have someone create a new blockchain technology and will minimize the negative things that Blockchain is bringing to the world.

We probably are overlooking the fact that it's not going to be easy for chinese investors to simply move to cryto considering their government's stand against it. And we all know how the chinese government pretty much controls most movements inside their country.