Received a few emails the last few days.  Here is one response I sent this morning to some friends:

This policy tightening, specifically based on this market-moving story from Caixin last week, comes amidst a larger shift: pressure from SOE incumbents that are concerned with the entire mobile payment / independent payment systems that have been setup over the past 3-4 years.  Quartz has a good overview on how the state-owned banks have essentially pressured policy makers into stymieing further growth of alternative services from Alipay & Tenpay.  Similarly three weeks ago the PBOC placed a “temporary” ban on payments made by scanning QR codes, mostly likely to protect UnionPay (an SOE) against the competition of Alipay & Tenpay.  In fact, this past week Chinese SOE banks posted their weakest annual profit growth, and they like those margins.

With respect to Bitcoin, I doubt it has anything to do with capital controls or flight.  Despite the fact that Bitcoin can be used as a vehicle to avoid capital controls, but have not seen any actual numbers on that so I could be wrong (maybe they all use RealityShares).  Yet even if it were the case, China is the 2nd largest source for remittances received ($60 billion in 2012), making it unlikely that the trend reversed and somehow China now exports more funds than receives during those 2 years (and I doubt that it is being used for domestic remittances for migrants to the inner provinces either).  For perspective, there are common ways to use UnionPay and art auctions to avoid capital controls (those links have interesting stats).

In addition, here is an updated summary of notices the different exchanges in China have received and their responses.  In addition, Rui Ma provided info on the most recent CoinDesk news piece on this issue yesterday.

Interestingly enough, I was told a couple days ago, in the event that the rumors of the PBOC clamp down on electronic deposits beginning 4/15 are true, one alternative is that Huobi (and others) would allow users to go to their office to deposit directly with them.  Bobby Lee from BTC China and others have said the same thing as well. Yet, what’s to prevent Alice from sending funds to some third party “cash delivery service” that then delivers them the cash?  And in any case, if the PBOC actually wanted to stop the business, it would be very simple – just (a) block the websites and (b) send in the PSB to close them down.

In any case, I can just imagine nerds with wheel barrows full of RMB lining the sidewalk of corporate offices…

That said, we (the public) probably will not know until we do.  Chinese regulators have used this strategy before: release or “leak” some information to test the reaction of the market.  If the reactions are severe, they may change the policy.  If you believe your investments will be impacted, aside from somehow “getting” some emergency guanxi, the best thing you can do is prepare for a Plan B, likely utilizing Hong Kong.