China to ease foreign exchange rules

China‘s foreign exchange regulator has unveiled a plan to simplify administrative rules on foreign exchange accounts, a move which, analysts say, will facilitate foreign direct investment (FDI), Chinese media reported.

Opening foreign exchange accounts or purchasing or selling foreign exchange for the purpose of FDI will require only registration in lieu of regulatory review and approval, the State Administration of Foreign Exchange (SAFE) said in a statement seen on Nov. 21 on its website. The new regulations go into effect on Dec. 17.

SAFE said the same applies to transfers between different foreign exchange accounts for FDI, according to the Global Times.

Review will no longer be needed for reinvestment of profits generated by foreign companies in China.

Procedures will also be simplified for investment in joint ventures and for foreign investors to buy equity in Chinese firms, the newspaper said.

China's Ministry of Commerce reported earlier this month that FDI into China has been slowing down, with a 0.24 percent year-on-year drop in October to $8.31 billion. Total FDI in the first 10 months of this year fell 3.45 percent from a year earlier.

AJP