China details retrictions for yuan FDI - paper
SHANGHAI, July 11 |
SHANGHAI, July 11 (Reuters) - China's central bank has detailed rules on yuan foreign direct investment (FDI), setting restrictions on different yuan FDI accounts to invest in securities, derivatives or property, the Shanghai Securities News said on Wednesday.
Yuan money in accounts set up by foreign investors before they start the FDI must not be used for land or housing purchases, the newspaper quoted a document issued by the People's Bank of China (PBOC), the Chinese central bank, as saying.
Yuan in accounts opened after the FDI begins flowing must not be invested in securities, financial derivatives and asset management products, and must not be used to buy properties which are not for the foreign investors' own use.
The new rules also banned foreign investors from using yuan credits borrowed outside China to invest in China's property developers, the newspaper quoted the PBOC document as saying.
The detailed rules followed broader regulations by the PBOC and the Ministry of Commerce last October that formalised the pilot scheme to allow foreign businesses to invest in the country with yuan legally obtained overseas, as the country moves to internationalise its currency.
Among other stipulations, previous rules said all applications for yuan FDI worth 300 million yuan ($47 million) or above must be submitted to the ministry for approval.
As part of its efforts to increase the influence of the yuan , China first launched a yuan trade settlement scheme in July 2009 in a few cities and expanded it to other parts of the country.
However, foreign businesses have complained that they are facing difficulty investing their yuan revenues due to China's capital controls. ($1=6.36 Yuan) (Reporting by Yixin Chen and Kazunori Takada; Editing by Kim Coghill)
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