* China to reform cross-border forex management guarantees
* Government looks to support weak exports
* Follows last week's introduction of trade-support policy
BEIJING, May 19 China's State Administration of
Foreign Exchange will reform the management of cross-border
foreign exchange guarantees, the regulator said on its website
SAFE will cancel or greatly simplify approval of the
guarantees, standardise their management and ensure all foreign
firms are treated the same, it said.
The move to support trade and ease foreign currency
transaction risk follows a government statement last week that
it would facilitate trade, as China's exports continue to weaken
into the second quarter.
This statement introduced measures including more tax
breaks, credit insurance and currency hedging options for
Some analysts originally believed China's central bank
engineered this year's decline in the yuan in an attempt to
drive out short-term currency speculators.
But experts now think the decline is meant to cushion the
weakening economy by making export prices more competitive.
Hurt by unsteady foreign demand and a rising yuan, China's
monthly average export growth last year was about a quarter of
the 35 percent seen a decade ago. This meant the sector was a
drag on the world's second-largest economy in 2013, with net
exports detracting 4.4 percent from overall growth.
Even so, China's trade sector remains a labour-intensive
industry and a major employer - an important detail for the
government which says job creation is its first policy priority
In last week's statement, the government repeated that it
would let market forces have more sway over the yuan's value
while increasing the currency's flexibility - both of which
would allow China to keep the yuan "basically stable" at a
China's trade partners have in the past accused Beijing of
deliberately holding down the currency to lift Chinese export
sales. China has always denied these accusations.
(Reporting by Paul Carsten; Editing by Ruth Pitchford)