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China launched international banking network

October 21, 2015 Comments off

The US domination of the global banking system coming to an end ?

ChinaMoneyImage

 

International payments for trade are typically routed through the US banking system in New York, and settled in US dollars.

China launch CIPS (China International Payments System).

Image Chinese Yuan courtesy of Prison Planet, Wiki Commons

 

 

A few years ago China started working on an alternate competing system whereby international payments no longer needed to clear through the US. It’s called the China International Payments System (or CIPS) and it was launched early October 2015 

So far CIPS is just been being provisionally tested; 11 out of 19 banks using it are Chinese and state-owned. But many banks, particularly in Europe, have already agreed to join the network.

If successful, CIPS could take a substantial market share from the US banking system, giving foreign banks and governments less and less reason to hold US dollars and US government debt.

taxmoneyhavens.com

 

 

The U.K. to join he Chinese-led Asian Infrastructure Investment Bank as a founding member and CIPS the alt. to SWIFT ?

March 17, 2015 Comments off

The government of the United Kingdom just announced that they would be applying to join the Chinese-led Asian Infrastructure Investment Bank as a founding member.

Shanghai by night

The United States currently dominates the global financial system. But after years of sanctions, wars, debt, money printing and regulations, the rest of the world are  looking for an alternative.

 

The soon-to-be-live Chinese International Payment System (CIPS) will provide a way for banks to transfer funds to one another without having to use the US banking system or the US dollar.

Shanghai by night courtesy of Wiki Commons

China is also the initiator behind both the BRICS development bank (called the New Development Bank, or NDB) as well as the Asia Infrastructure Investment Bank (AIIB). Both of these are multilateral development banks that aim to end the dominance of the western-controlled World Bank and IMF.

NDB includes all the BRICS nations– Brazil, Russia, India, China, and South Africa.

Founding members of the AIIB include China, India, Indonesia, Kazakhstan, Mongolia, etc. They’re typically all rapidly growing and/or resource-rich developing nations.

New Zealand was the first western nation to join AIIB in October 2014, and Britain has just announced its intention to become the second.

The signatories to the NDB and AIIB charter documents want to create an alternative to the United States dominance of the global financial system by launching these new development banks and an alternative payment system together.

taxmoneyhavens.com

Luxembourg set to internationalize Renminbi

November 8, 2013 Comments off

Underlining the increasing role of the Luxembourg financial center in the internationalization of the Chinese Renminbi (RMB), Luxembourg’s Finance Minister Luc Frieden announced the launch of a new web portal dedicated to the development of activities linked to the currency in Luxembourg.

Grand Ducal Palace, Luxembourg

The new web portal forms part of ongoing efforts over the past few years to promote and to further diversify the Grand Duchy’s financial market and to secure the future of the financial center. The Government’s strategy for developing the Luxembourg financial center is based on four axes, namely strengthening existing pillars, creating new products and services, promoting the financial center abroad, and diversifying the financial center geographically.

The Grand Ducal Palace, Luxembourg. Picture courtesy of Ernmuhl.

Underlining the importance of positioning Luxembourg more internationally in a global financial market, Frieden explained that, given its rapid economic growth, China constitutes “an ideal partner.” Similarly, China is committed to internationalizing the RMB and is currently looking for access to global financial markets, the Minister pointed out, alluding to the fact that the Bank of China and the Industrial and Commercial Bank of China both now have their European headquarters in Luxembourg.

Luxembourg already plays a significant role in the international trade of the RMB, Frieden continued, citing the fact that RMB40bn (USD6.5bn) in deposits are held in the Grand Duchy and that RMB62bn in loans have been issued, and noting that 40 RMB-denominated bonds are listed on the Luxembourg Stock Exchange. Trade in the RMB and access to the RMB are vitally important for the Luxembourg financial center, in particular for the funds industry, Frieden ended.

The Luxembourg Government is not only reflecting constantly on the financial center’s future, but also on Luxembourg’s future economy and taxation, to ensure that its tax regime remains competitive and attractive for investors. At the same time, Luxembourg aims to guarantee legal certainty for investors, by ensuring that it is tax compliant, adopting the latest international regulations and standards in tax matters.

Tax & Money Havens

Shanghai establish Free-Trade Zone

October 2, 2013 Comments off

The State Council has approved the establishment of the country’s first pilot free-trade zone (FTZ) in Shanghai, in what is seen as an essential step towards upgrading China’s economy through the liberalization of services and trade, with an eventual roll-out nationwide in other chosen areas.

Shanghai at night

Shanghai has already established the conditions for setting up an FTZ of almost 29 square kilometers, building on its existing comprehensive bonded zones around Waigaoqiao, Yangshan and Pudong Airport, which are reported to have serviced total trade of more than USD100bn in 2012.

 

Picture courtesy of Wikimedia: Shanghai’s financial district Pudong

Home to the country’s main stock exchange and the world’s largest port, Shanghai has been at the heart of China’s transformation from an isolated Maoist regime into an economic powerhouse.

Although final details have yet to be announced, while the removal of unnecessary administration and its legal framework is completed and submitted to the Standing Committee of the National People’s Congress, the FTZ (or, as it has been more aptly called, the “free-market area”) will be more advantageous for financial services, trade and investment.

Shanghai is to strengthen its role as a foreign exchange settlement center for international trade, with measures to promote the cross-border use of the renminbi with lessened foreign exchange conversion regulations. For example, bank accounts in the FTZ would be exempt from regulatory control by the Chinese authorities.

While further tax incentives for companies establishing in the FTZ are still to be disclosed, zero customs duties and import taxes will continue to apply to goods transferring between the FTZ and overseas destinations, and domestic merchandise that enters the FTZ is regarded as having been exported, with exporters enjoying an immediate tax rebate.

In addition, there is already an exemption from tax on business income and revenues arising from international shipping, transporting, warehousing, and shipping insurance for companies registered in the FTZ port areas.

taxmoneyhavens.com

Singapore Tops Hong Kong as Residence for Mobile Rich in Asia

December 12, 2012 Comments off

According to Bloomberg news; Singapore topped Hong Kong as the most desired place in Asia for so-called mobile millionaires to reside, with quality of life cited as the main attraction, a RBC Wealth Management (RY)survey showed.

Almost a third of the millionaires in Asia who live, work or spend more than half their time outside their countries of origin prefer Singapore, while 24 percent pick Hong Kong, the second most popular in the region, RBC and The Economist Intelligence Unit said in a joint research report yesterday.

SingaporeMarinaBaySands

Hotel guests are seen at the infinity pool at the SkyPark atop Marina Bay Sands in Singapore. Courtesy of photographer: Sam Kang Li/Bloomberg

Singapore topped Hong Kong as the most desired place in Asia for so called mobile millionaires to reside, with quality of life cited as the main attraction, a RBC Wealth Management survey showed.

Real estate led the list of preferred assets for the internationally mobile wealthy, according to the survey, which showed 23 percent of those in Singapore reporting a “high propensity” for property investment, compared with 7 percent in North America. The island’s home prices climbed to a record in the third quarter, prompting the government to restrict home loans and cap property development. Eduardo Saverin, co-founder of Facebook Inc., moved to Singapore in 2009, and Jim Rogers, chairman of Rogers Holdings, relocated there in 2007.

“Singapore always has this quality as a safe haven, not just for your money, but also for your family,” said Wai Ho Leong, a senior regional economist at Barclays Plc in Singapore.

For mobile millionaires who moved to Singapore, 89 percent ranked quality of life as important and 83 percent cited the country’s political stability as important, the survey showed. Infrastructure and educational opportunity were also given as reasons to live there.

Most Millionaires

Singapore posted a 14 percent increase in millionaire households to 188,000 last year, when the Asia-Pacific region countered a decline in wealth in Western Europe and the U.S., according to a Boston Consulting Group report published May 31.

The proportion of millionaire homes in the city was 17 percent, the highest in the world, followed by Qatar and Kuwait, according to Boston Consulting Group. Singapore has a population of 5.3 million, of which about 2 million are foreigners.

“High net worth individuals with global outlooks for their businesses and families are choosing Singapore to live and invest in,” Barend Janssens, the Singapore-based head of RBC’s wealth-management unit for emerging markets, said in a statement.

The city-state is grappling with the elevated inflation that comes with years of economic growth and population expansion on an island smaller than New York City, with rising demand fueling record property and car prices.

Property Boom

In the three months ended Sept. 30, the island’s private residential property price index rose 0.6 percent to a record 208.2 points, according to government data. In prime districts, apartment prices gained 0.2 percent, compared with a 1 percent increase in the suburbs.

The Monetary Authority of Singapore told lenders on Oct. 5 to restrict home-loan maturities “to curb continued upward pressure on residential property prices,” in an attempt to avert a housing bubble. The government said in September it plans to cap the number of homes that can be developed in suburban projects as it seeks to curb the increasing trend of so-called shoebox apartments.

The cost of a permit to own a small car for 10 years rose to an unprecedented S$78,523 ($64,300) on Dec. 5 from S$46,889 at the start of the year. That excludes the cost of buying a car. The government auctions limited vehicle permits to control congestion and pollution.

“Only if you’re very young and highly qualified would you want to rough it out in Hong Kong for a few years,” Leong said. “But once you have kids, the pollution gets to you, the lack of greenery gets to you, the crowdedness gets to you.”

Doing Business

Hong Kong is the best place to do business, according to data compiled by Bloomberg. The city of about 7 million people secured the top position in an index based on six criteria including the degree of economic integration and labor costs. Singapore ranked ninth in the index published in March by Bloomberg Rankings.

Hong Kong acts as the gateway to China, the world’s most populous nation, with free-market policies and low corporate taxes.

“Hong Kong is a very big financial center in the region and in recent years has also benefited a lot from China opening up its markets,” said Frances Cheung, a Hong Kong-based strategist at Credit Agricole CIB. Hong Kong is “about the opportunities, especially in the financial world.”

The World Bank ranks Singapore and Hong Kong top in its gauge focused on the ease of doing business. The Washington- based Heritage Foundation has named Hong Kong the world’s freest economy for 18 successive years.

See the full article from Bloomberg here.

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