With a population of more than 1.4 billion people, the People’s Republic of China stands to be one of the biggest economies around the world. China has been characterized as an emerging superpower due to its huge economy, and fast infrastructural development. In terms of the nominal GDP, China has the world’s second-largest economy, which was as much as $13.5 trillion as of 2018.
It should not come as a surprise that so many international Forex brokers are doing their best to get to this very diverse market. Forex and CFD (Contracts for Difference) trading in China is regulated by the Chinese government. Brokers operating in China are required to adhere to the regulations.
The best Forex brokers in China and how to find them
Finding the best broker is difficult because there are so many brokers that you need to compare. The most important aspects to take into consideration are regulations and trading conditions, such as: trading fees, customer service, minimum deposit requirements, available instruments, trading accounts. To aid you in the selection process, we have examined many different brokers and came up with the list of top brokers for Chinese residents.
Forex trading regulations in China
The two major bodies that take care of the whole financial market in the country are the State Administration of Foreign Exchange (SAFE), and the People’s Bank of China (PBOC).
The SAFE’s main function is to make sure the financial markets in the country are stable. Moreover, SAFE is responsible for regulating crypto market of the country, while also being in charge of China’s external debt and managing the balance of payments.
Forex brokers are facing huge challenges when they decide to offer their services to the citizens of the country due to so many restrictions. Many global brokers have the partnerships with local companies, that serve as some type of introductory brokers. Since there are not so many local Forex brokers in the country, China had to come up with new ways to make sure that the international brokers that are functioning in the country would offer safe and secure services to the citizens of the country. Regulators are monitoring the market at a whole new level, especially compared to other countries around the world.
Chinese Yuan in Forex trading
The Chinese Yuan (CNY) plays a significant role in Forex trading due to China’s economic size. It should be mentioned that when Chinese spend Yuan in the country, it is coded as CNY, and in Forex, the currency is coded as CHN. The most actively traded Yuan pair in Forex is USD/CHN. While the USD/CHN is not viewed as a major currency pair, it has great liquidity and there are many trading opportunities for even day-traders. It should also be mentioned that the Chinese government is trying to limit global dominance of US Dollar by supporting payments in its local currency.
Popular trading platforms in China
When it comes to trading platforms for Forex, MetaTrader 4 (MT4), MetaTrader 5 (MT5), and cTrader are the most popular in China and all around the world. MetaTrader platforms support algorithmic trading through Expert Advisors (EAs), offer reliability and user-friendly interface. It should also be mentioned that the MT4 is used for trading currencies, while MT5 is a multi-asset platform that offers enhanced features. When it comes to tradable instruments, cTrader is very similar to MT4. You will not be able to find stocks, futures or bonds on this platform. cTrader was built for trading Forex, indices, commodities and crypto derivatives. The platform is popular among intraday and high frequency traders.
Popular payment methods in China
Most of the brokers in the country offer various deposits options, such as: WeChat, AliPay, and many others. These two are mobile payment methods, which have become very popular in China recently and has changed the way people pay for mostly anything.
In addition, UnionPay, JD Pay, Baidu Wallet, and QR code payments are also very popular. Before starting the account opening process, make sure your broker supports your favorite payment method.
Summary
Overall, Forex trading in China is legal but very restricted. Residents of China are recommended to consider opening live trading accounts with international brokers that are regulated by reputable bodies and have great trading conditions. In fact, you can find such brokers in our list. Read the detailed reviews to find the one that suits you best.
FAQs on the guide to Best Forex broker in China
Is it legal to trade Forex in China?
