As you may know China has the largest population in the world which currently stands at more than 1.3 billion inhabitants. What is not so well known is that China is not only the biggest country in terms of population but that it has also managed to recently climb up to the number two position in the world in economic terms, as it is now the second largest economy as regards its GDP.
As already explained in our China Forex Country Report, the foreign exchange market both in terms of inter-bank transactions as well as retail operations has made huge leaps. However, binary options trading can be said to still be in a more nascent stage in China, partly because binary options are a newer and more innovative investment vehicle and it is obviously taking it longer to become established in China as well. That being said, there are several factors that characterize the Chinese market which make the future prospects of online retail binary options trading in the country extremely promising and potentially highly lucrative both for brokers and for investors.
The Chinese banking system and its regulation over financial investments is still quite restrictive, however it has made steps towards demonstrating a willingness and ability to adapt to the changing realities and circumstances meaning that there is room and scope for the binary options trading to develop even against the challenging and often difficult and rigid Chinese financial environment. Additionally, especially since the retail trading of binary options is done online, this makes it more difficult for the government and regulators to be able to fully control the actions of the billions of Chinese people and thus, even if it presupposes the bending or by-passing of some rules, binary options trading can take place.
China Binary Options Market
Up until recently China was not getting the attention it deserves from most binary options brokers, although it has the 3rd largest stock exchange market worldwide. Binary options brokers had been more hesitant to venture into the Chinese market fearing the strict regulation of the Chinese government and also because they wanted to build up the confidence in their offering under more free market conditions before aiming at more difficult areas. This trend has started to be overturned however and binary options brokers, seeing the huge potential of the Chinese market, are gradually beginning to target Chinese clients, either directly through their websites, or with the help of Chinese associates and Introducing Brokers. It should be pointed out for example that the largest binary option broker in the world, AnyOption, is already providing its trading platform in Chinese in order to make the Chinese customers feel more comfortable and attract them to investing in binary options.
Other binary options have followed suit and binary options platforms in the Chinese language, also packed with useful information as well as training materials in Chinese are cropping up more often than before, although the retail binary options market in China is definitely still underdeveloped and small compared to what it could have been if binary options were more well known to Chinese investors. In fact, the Chinese, who save a lot in order to face the lack of social welfare in their country, but who are at the same time much more risk averse than other nations are ideal candidates to invest in binary options traders and this is reflected in the immense increase in the numbers of Chinese binary options traders over the recent period.
Using the forex market as an indicator, it is safe to say that the potential for growth for binary trading in China is phenomenal, not least because binary options trading is much simpler and easier than forex trading and demands less commitment and less knowledge on behalf of the trader. Given the fast pace and dynamism of binary options trading it is almost certain that once it gets going the binary options market in China will surely match or surpass the growth and numbers of forex traders in a very short period of time.
Binary Options Regulation in China
There is no legal provision specifically dealing with binary options trading in China and thus, strictly speaking binary options trading is not illegal. While regulation of the economy and economic activity in China has historically being strict and even severe, it has seen a mellowing in the last few years, with loans and mortgages being more common and easy to get and through modernizing efforts that are fast allowing foreign banks to permeate the Chinese market. Furthermore, while restrictions exist and laws are intricate, enforcement is very complicated and almost impossible to entirely implement due to the sheer number of Chinese residents.
The habit of bending certain restrictions on overseas investments by Chinese nationals is common and in fact Chinese citizens are constantly seeking and finding way to circumvent their country’s more restrictive laws, such as for example through transferring funds abroad using friends and relatives. Although authorities are aware of this practice they tend to largely overlook it. In any case, and even under the current restrictive framework, any citizen is allowed to transfer the equivalent of up to US$ 50,000 a year outside of the country which is more than enough for once to deposit with a binary options broker and thus this is not hindering a Chinese individual who wishes to trade binary options.
In short, any Chinese person who wants to invest in online retail binary options trading can do so without any real problems and in general terms opening a trading account with a broker shouldn’t pose any significant challenges for an interested Chinese investor.
Top Binary Options Brokers in China
If you are a Chinese resident and you wish to invest in binary options in order to diversify your investment portfolio or simply as a pass time and in order to take advantage of the high returns that this innovative online retail method has to offer then you should pick a broker that is reliable and trusted and one that understands the specific needs of the Chinese investor and the challenges posed by the special characteristics of the Chinese investment environment and market.
Gradually the number of binary options brokers which target the Chinese market is increasing and they are adapting their platforms to operate in the Chinese language, also offering customer support in Chinese as well as an abundance of learning materials, tools and other information in Chinese in order to facilitate the Chinese investors to master the basics of online retail binary options trading and being able to easily trade binary options online and maximise their chances of executing profitable trades.
Consult the binaryoptionwire.com list of trusted brokers in order to select the binary options broker that is best suited to your specific needs as a prospective Chinese binary options investor and jump on the binary options bandwagon to rip the many benefits and advantages it has to offer.