Individuals, both Chinese and foreign, have few approved channels to send their yuan funds abroad or bring them back to China. They usually have to convert their yuan holdings into foreign currency first before remitting them offshore.If Chinese start moving out of the yuan, Shenzhen and Hong Kong banks will be the first to know.
Banking executives say that, at least initially, demand for the new service will come mostly from mainland Chinese who plan to travel to Hong Kong, where the currency is widely used.
The Shenzhen directive applies to the local branches of Chinese banks, including Industrial & Commercial Bank of China Ltd., Bank of China Ltd., China Merchants Bank Co., Citic Group's Citic Bank, and Hua Xia Bank, the people with knowledge of the issue said,
The directive says that individuals can transfer across the border up to 80,000 yuan ($12,700) in funds per day through accounts with the Shenzhen branches of those banks. It is unclear whether authorities will permit repeated transfers over an extended period of time.
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