BEIJING Nov 21 China's currency regulator said
on Wednesday it will ease some regulations and cut red tape to
support foreign direct investment (FDI) in the country in the
face of slowing inflows.
The move comes after data on Tuesday showed China's longest
run of year-on-year declines in FDI inflows since 2009 extended
into October, dragged down by an uncertain outlook for corporate
spending as global trade sags.
The State Administration of Foreign Exchange (SAFE) said in
a statement on its website that it would simplify procedures for
foreign exchange transactions in FDI accounts and quicken
approvals for investment applications.
It would also scrap the rules under which foreign investors
need approval to open foreign currency accounts and to re-invest
FX earnings. Foreign firms in China will also be permitted to
make loans to their overseas parent companies.
SAFE said the rule changes were possible because China had
basically achieved currency convertibility in the direct
investment account, meaning strict restrictions in most
cross-border funds payments and remittances were no longer
The new regulations take effect from Dec. 17.