China has never publicly acknowledged the legitimacy of foreign exchange margin speculation. Margin trading in China is limited to financial transactions such as physical futures and stock index futures.

However, these foreign exchange margin businesses still have a market because of the imperfection of the national legal system and the observance of declaration and proof. In other words, no one will report it, and the informant must provide valid evidence. These transactions are basically point-to-point transactions now. In other words, you are a trader, opposite Jiasheng Foreign Exchange, and Jiasheng Foreign Exchange will not report yourself. Then if you report Jiasheng, there is no direct evidence. The most direct and effective evidence is in Jiasheng.

So it becomes illegal, but it exists.

Second, why is it reasonable? There are not many investment channels at present. At that time, stock trading was a market for people with poor skills or novices. For those old technicians, it is necessary to trade T0, and stock index futures need huge funds. To put it bluntly, it is to give these people a way out. These companies have flexible capital, but the flexible capital flow has to be collected through domestic banks. Our country does not use the US dollar as the standard currency. Foreign exchange transactions are all currency transactions with the dollar as the target.

To put it bluntly, it is the exchange rate of RMB earned by banks to US dollars. This is good for the country. So the country just turns a blind eye.