Anyone involved in China? Looking for tax and commission in China

[jk90029]

Dear-

For those who has a Chinese friend or is China-related or etc.

Would you please ask the Chinese about

1) What is the transaction tax rate (stamp duty)? I heard China government chaged from 0.3% to 0.1% few years ago.

2) Similar to the cheapest list of US-based brokers as in https://en.wikipedia.org/wiki/Comparison_of_online_brokerages_in_the_United_States

where and how can I find the commission comparison for each equity brokers in China?
Of course looking for online trading for commission saving.

Is there some brokers like Interactive Broker / Robinhood / LightSpeed, in China?

 

[Obelixtrader]

In China direct NO Broker
through Interactive Broker you can trade mainland shares via the Shanghai-Hong Kong Stock Connect program

 

[jk90029]

In China direct NO Broker
through Interactive Broker you can trade mainland shares via the Shanghai-Hong Kong Stock Connect program

Of course it is not yet legally allowed foreigner to open an equity account, I heard.

If you use two brokers (such as IB and a Chinese broker), then you pay double for two people.

So, the OP should be changed to "How much do Chinese pay commission for trading?"
In a few years, China may open finance to foreigner, as Japan+Taiwan+korea did before.

 

[Lee123]

Dear-

For those who has a Chinese friend or is China-related or etc.

Would you please ask the Chinese about

1) What is the transaction tax rate (stamp duty)? I heard China government chaged from 0.3% to 0.1% few years ago.

2) Similar to the cheapest list of US-based brokers as in https://en.wikipedia.org/wiki/Comparison_of_online_brokerages_in_the_United_States

where and how can I find the commission comparison for each equity brokers in China?
Of course looking for online trading for commission saving.

Is there some brokers like Interactive Broker / Robinhood / LightSpeed, in China?

0.025% for stock trading commission. $10 RMB for option trading per contract.

 

[jk90029]

0.025% for stock trading commission. $10 RMB for option trading per contract.

Is the 0.025% cheapest among all the Chinese brokers?
Do you have friend who knows broker's name and URL?

For example, when one buy $10000 equity, he pays $2.5 for buying commission. Also he should pay another $2.5 for selling.
Therefore total commission is $5.0 (???)

With the stamp tax of 0.1%, all the expense will be 0.1+0.05=0.15%. (???)
For example, for as much as $100000, he pays $15 for cost (tax+comm).
Is it correct?

I heard China has NO future/option market yet. (of course may open a few years later)

 

[Lee123]

Is the 0.025% cheapest among all the Chinese brokers?
Do you have friend who knows broker's name and URL?

For example, when one buy $10000 equity, he pays $2.5 for buying commission. Also he should pay another $2.5 for selling.
Therefore total commission is $5.0 (???)

With the stamp tax of 0.1%, all the expense will be 0.1+0.05=0.15%. (???)
For example, for as much as $100000, he pays $15 for cost (tax+comm).
Is it correct?

I heard China has NO future/option market yet. (of course may open a few years later)

The commission and stamp tax is quite low in chinese market. There are a lot of brokerage firm in china, and i do think there are some restrictions for foreigners to open account in china.

For future market, it's been there for many years.
For options, since around February 2015, you can trade for 50ETF (50 blue chip stocks)

 

[jk90029]

The commission and stamp tax is quite low in chinese market. There are a lot of brokerage firm in china, and i do think there are some restrictions for foreigners to open account in china.

For future market, it's been there for many years.
For options, since around February 2015, you can trade for 50ETF (50 blue chip stocks)

Thanks for the reply.

However, more clear comm comparison for Chinese brokers is needed as shown in https://en.wikipedia.org/wiki/Comparison_of_online_brokerages_in_the_United_States

 

[luisHK]

As the local market is largely restricted to locals, those comparisons probably exist in modern chinese, you can try your skills on Baidu.
FWIW some mainland brokerages (at least the banks brokerages) open accounts to foreigners, but they will only give access to B shares and I also heard of restrictions on funding the account (in USD and possibly HKD for the Shenzhen market) like one can only wire out the money through the same overseas account it was wired in.
H shares listed in HK are another way to invest in Chinese market with less restrictions, the 0.1% tax also applies. I opted for that way but the valuation and probably the price action is different than with H shares.

 

[jk90029]

As the local market is largely restricted to locals, those comparisons probably exist in modern chinese, you can try your skills on Baidu.
FWIW some mainland brokerages (at least the banks brokerages) open accounts to foreigners, but they will only give access to B shares and I also heard of restrictions on funding the account (in USD and possibly HKD for the Shenzhen market) like one can only wire out the money through the same overseas account it was wired in.
H shares listed in HK are another way to invest in Chinese market with less restrictions, the 0.1% tax also applies. I opted through that way but the valuation and probably the price action is different than with H shares.

Probably HK government charges additional 0.1% tax, together with tax by China government.

Let me make an hypothetical example. roughly 5 times of BUY/SELL every month

1) Some Chinese pay ONLY 0.4% tax per month which is compounded annual 0.4*12=4.8% every year.

2) Some foreigner pay 0.8%(tax by China and HK) a month which is annual 0.8*12=9.6%

As for the 50 years (30 to 80) with a seed of "100K",
Trader 1) should make 100*1.048^50 = 1042.471K before tax, to make it even.
Trader 2) should make 100*1.096^50 = 9784.254K before tax, to make even

Therefore the difference of roughly 8700K is going to go to double tax.

I guess some trader may fly to become a Chinese citizen, if he make the additional 8700K.
Of course there is another amount of broker comm, for consideration.

 

[jk90029]

As the local market is largely restricted to locals, those comparisons probably exist in modern chinese, you can try your skills on Baidu.

I already found a Chinese speaking (writing) person to use Baidu, for search of comm comparison in China brokers.
But it was NOT successful.

Baidu may NOT show the search result.