Home>>Business
Last updated at: (Beijing Time) Wednesday, April 07, 2004

China continues to loosen foreign exchange control

According to the report of Hong Kong based Wen Wei Po, to continue to loosen foreign exchange control and store the foreign exchange in the hands of the people and enterprises constitute China's "top priority" in the aspect of foreign exchange control. This is an authoritative report by the Development Research Center of the State Council.


PRINT DISCUSSION CHINESE SEND TO FRIEND


According to the report of Hong Kong based Wen Wei Po, to continue to loosen foreign exchange control and store the foreign exchange in the hands of the people and enterprises constitute China's "top priority" in the aspect of foreign exchange control. This is an authoritative report by the Development Research Center of the State Council.

China should work out laws and regulations as soon as possible as the report has it to launch the QDII (Qualified Domestic Institutional Investor) program, and adopt a "going outside" strategy. In addition, China will set a loose cap on foreign exchange control in order for citizens to take more foreign exchanges out from China.

Statistics from the State Administration of Foreign Exchange indicates that from October 2003 to February 2004, Chinese citizen's purchasing of foreign exchange for personal use amounted to USD 475.41 million, 51.2 up over last year. The new policy regarding individual's purchase of foreign currency released on Oct 1, 2003, which is more lenient, has seen its initial progress.

Prior to this, the State Administration of Foreign Exchange has made adjustment to policy of citizen's usage of foreign exchange. As from October 2003, for people going overseas, the amount for the purchase of foreign exchange rose from USD 2000 to USD 3000 (buyer stays overseas within half a year) and USD 5, 000 (buyer stays overseas for half or over half a year).

The "lenient" policies to be released this year include loosening restrictions on foreign exchange purchase, so as to satisfy the needs for both individuals and enterprises. For instance, students studying overseas will enjoy a more simplified procedure when purchasing foreign exchange. They can buy foreign exchange at banks with valid certificate. A plan to improve ceiling for enterprise's foreign exchange account will be released at an appropriate time.

With the implementation of QDII, China's foreign exchange reserve may decrease within a short period of time because of enterprise's investment overseas. But from a long term perspective, profit coming from investment will make the balance of payment more stable in the future, analyzed the report submitted by the Macro Economy Section of Development Research Center of the State Council.

For foreign trade enterprises, the current system for exchange settlement and sales need to be reformed, from compelled exchange settlement and sales to settlement and sales by proportion. In the meantime, China needs to loosen restriction on foreign exchange for citizens to take out. After all China's improvement in overall strength has made it no longer necessary to convert all foreign exchanges to the country's "reserved" resource.

By People's Daily Online


Questions?Comments? Click here
    Advanced






New rule targets individuals' forex settlement in China

Chinese residents buy more foreign currency

Forex dealings up 51.2%





 


Israel's killing of Yassin fuels conflict: Commentary ( 2 Messages)

How the US could improve its image abroad ( 14 Messages)

US urged not to fingerprint Chinese ( 10 Messages)

China hunts corrupt officials who abscond overseas ( 3 Messages)

Seven Chinese activists land on Diaoyu Islands ( 4 Messages)



Copyright by People's Daily Online, all rights reserved