Live And Invest In Tonghai, China

Low-Cost Living Today…Currency Upside Tomorrow

Aug. 22, 2011, Tonghai, China: Tonghai, China, provides a low-cost lifestyle and retirement option today and a big currency investment opportunity for tomorrow.

Dear Live and Invest Overseas Reader,

"A local hotel here advertises their bar as 'a bridge, waterfall, sunshine, and piano--it could bring you to be a full, new human and nature developing boundary," writes Intrepid Correspondent Paul Terhorst.

"With that kind of translation, you figure we're probably in Asia, and we are. We're in Tonghai, in Yunnan province in southwestern China. Two years ago I wrote about Yunnan province, suggesting that Kunming and/or Dali would be fine places to live part of the year.

"Now we're back in the area. Look at a map, stick the point of a compass in Kunming, and draw a circle with a 300-kilometer radius, more or less.

"You've just circled what may be Asia's best up-and-coming retirement area, call it central Yunnan. Besides Kunming and Dali, there's Lijiang, Shangri-la, Tonghai (where we are right now), Jianshui, Geiju, Yuanyang, and more.

"Start with weather. Central Yunnan comes close to eternal spring. The area suffers none of the hot and sticky farther south or the cold and icy farther north.

"Move on to cost of living. Central Yunnan offers real bargains. Vicki and I routinely eat a Chinese breakfast for a buck or two, and a full splurge dinner for two with beer in a family-run restaurant is US$4 to US$7. Our center-city hotel, one of the priciest in Tonghai, costs US$10 a night for a double. The very best hotel in town, a 'national four-star standard,' has 17 floors, 15 restaurants/food areas, pool, bowling alley, night club, and so on, and costs US$30. A cab across town costs a dollar or two, and a bus to Kunming (130 kilometers) about US$7.

"You can spend less if you work at it. You can also spend more, as the boom here offers more and more high-end choice.

"To come and spend part of the year in central Yunnan, you'll have to be a pioneer. Vicki and I have been in Tonghai for a week now, and we have yet to see another Westerner. But I think the challenge might pay off. China looks to tomorrow, and it's fun being around so much enthusiasm.

"Two years ago, when I first wrote of the region, I mentioned two drawbacks. First, a typical double-entry visa obtained in Thailand was good for six months, with each entry good for only 30 days. With the old visa the longest we could stay was 60 days, plus a bit more with the border run to Hong Kong, Laos, or Vietnam.

"This year we again got our visas in Thailand, but the visas were much improved. We were given a double-entry visa good for six months, with each entry good for 90 days, instead of 30. We're told that the Chinese consulate in the United States might give multiple-entry visas good for one year with each entry good for 90 days.

"With the new visas, spending a large part of the year in China becomes a real possibility.

"The second drawback I mentioned two years ago was the language. At the time I figured you'd have to learn to speak Chinese--tough to do, especially if you're over 40--or wait until more Chinese learned English. We returned to central Yunnan now partly to find out if more English is spoken than before. Answer? Hard to say. Desk clerks in Chinese hotels (as opposed to international hotels), cab drivers, bus drivers, waiters, and sales clerks speak no English at all. Forget it. But, increasingly, it seems, students approach us to chat. And big wigs around town often speak English perfectly. You meet them at construction sites--engineers, I'd guess, or the developers themselves--or in the international hotels or on airplanes.

"You also meet them at banks, and here's my last point. We wanted to find out if Americans can open bank accounts here.

"I remember when a dollar bought around 400 Japanese yen. Back then Japan enjoyed high growth. Exports to the U.S. in the 1950s included flip flops, portable radios, and other low-end merchandise. But by the time I came of age, Japan sold well-built cars, cameras, and electronics. 'Made in Japan' stood for quality and design.

"And the yen went from 400 to 80, where it is today.

"I missed that upward movement of the yen, but we might now have another chance. I think the Chinese yuan could move up at a similar pace. A revaluation of the yuan amounts to as close to a sure thing as one finds in the financial world.

"The Chinese want to make the yuan fully convertible within two to five years. When that happens, the yuan will pop, perhaps from 6.4 to 4. I fully expect the yuan to reach parity with the dollar, 1 to 1, over the next few decades.

"At this point I'm still working on the ins and outs of Chinese bank accounts. I plan to give a full report on the subject at our Retire Overseas Conference in Orlando in October. Meantime, I can tell you that, yes, Americans can open accounts here, no problem. Just present a passport and some cash or traveler's cheques at the Bank of China. They'll convert to yuan and put the money in your account. You'll get a debit card on the spot, to be used at ATMs only in China, and online access to your account.

"One final point. Central Yunnan offers very low cost of living. That low cost will disappear as the yuan appreciates. Best get over here now. Enjoy the low cost today; buy yuan for tomorrow."

Kathleen Peddicord

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