BEIJING Aug 4 Some foreign firms in China can
now use their registered capital to buy stakes in other Chinese
companies as part of an experiment to further loosen capital
controls, the foreign exchange regulator said on Monday.
The State Administration of Foreign Exchange (SAFE) said the
pilot test would also reduce red tape for companies that want to
convert their registered capital into yuan to attract more
Under the new rules, companies are free to convert all of
their registered capital into yuan if they so wish, though they
are prohibited from using the funds to buy Chinese securities.
Previously, the amount of registered capital that firms
could convert into yuan was limited by the sizes of their actual
transactions. The use of the funds was also strictly controlled
The experiment, which begins on Aug 4, will run in the
special economic zones in 15 provinces and regions that include
Beijing, Shenzhen and Guizhou in southern China.
(Reporting By Shao Xiaoyi and Koh Gui Qing; Editing by Ron