China's multinational corporations (MNCs) are to be allowed to operate foreign exchange funds overseas, said a top official of the State Administration of Foreign Exchange (SAFE) Wednesday.

During the international forum on "going global" of Chinese enterprises, Wei Benhua, deputy director of SAFE, said SAFE has been studying the proper methods for this operation so that on theone hand the investment channels are expanded and on the other hand the development of overseas enterprises is better supported.

He said that at present, China's foreign exchange reserve sees steady growth and the international revenue and expenditure is in good condition.

"Under the prerequisite of controllable risk and prudent supervision, it is not only feasible but also necessary toreasonably loosen the foreign exchange control for capital accounts and allow the qualified MNCs to operate their foreign exchange fund overseas."

Currently, in the process of overseas investment, the enterprises often face the lack of capital flow while overseas financing is often rigorous work and with high cost.

It has become one of the problems that awaits immediate resolution for those "going global" overseas enterprises for their own further development.

Under the present administration framework of China, however, the overseas companies can only gain the financial support at home through capital fund increase on the side of domestic investing entities.

This approach has to endure the complicated and time-consuming rectification procedure and cannot lead to effective solution for money flow shortage.

Under such circumstances, many transnational investing enterprises in China have brought out the request for an overseas operation for making loans to overseas companies with their foreign exchange fund.

Wei said at present the favorable balance of international revenue and expenditure, the stable RMB exchange rate together with abundant foreign exchange reserve help create satisfactory conditions for the further implementation of the "going global" development strategy.

"Going global", which means to encourage enterprises to invest in other countries and regions, is a strategy that the Chinese central government put out in 2000.

The two-day forum is held by the Ministry of Commerce.

Source: Xinhua