When in Rome: Cross-Border Cash Walk

Today's weather: High = 13 Low = 8
Rain

The restrictions involved in mainland Chinese banking are downright scary and horrendously complex to boot. Put simply, a nightmare, if the money involves anything coming into China or leaving the country. A simple RMB account where the money stays inside the mainland -- that is not a problem. But anything else and you're just asking for trouble and wasting your time.

But it's a well known fact that millions of Chinese locals are flushed with cash and that money most certainly leaves the mainland in foreign currencies. Also a ton of foreign currency goes the other way and is converted into RMB.

So how can these cash exchange volumes happen given the crazy restrictions on the RMB? Enter the cross-border cash walk. Locals will literally walk across the border both ways with more cash in their pockets than you could possibly imagine.

Hong Kong is the most popular choice because of the ease in which to conduct international currency transactions in the city-state and the relatively low security at the border with the mainland. Basically it is a high volume land crossing.

Obviously it is illegal to cross the border with heaps of cash, the limit being 20,000 RMB (it used to be 6000 RMB). But laws in China mean diddly squat because the society is not *ruled* by law. If everybody followed the "rules" then nothing would get done. Those crossing the border with massive cash piles are more or less forced to do so. Having been blocked by rules at the mainland banks already, they aren't exactly going to submit to rules at the border about exporting cash.

Even so, airports are not a good choice due to the low volume and stricter immigration checks. The HK land borders have virtually never stopped anyone for cash exporting.

As for myself, that's how it's going down for me. Out of frustration and 8 failed attampts to do a transaction I closed out my mainland HSBC account and am hauling down piles of cash to Hong Kong for the weekend in order to do the transaction there.

The amount of cash is comparable to what the rich locals do.