China's central bank announced Thursday that both Chinese citizens and foreigners will be able to carry as much as 20,000 yuan (2,421.30 US dollars) into or out of the country as of Jan. 1, 2005.

This is a sharp increase from the current 6,000 yuan (726.4 dollars) set in February 1993.

A spokesman for the People's Bank of China, the central bank, said that the increase will cater to the needs of China's economic development and overseas exchanges. A stable, strong yuan contributed to the policy change, the spokesman said.

China's economy grew quickly from 1993 to 2004, stimulating spending by the Chinese people, while overseas exchanges have been continuously expanding, he said.

Both the number of foreign tourists and their spending in China have grown quickly, while an increasing number of Chinese are going out for travel, business tours and study.

In addition, after Hong Kong and Macao returned to the motherland, the demand for renminbi has been on the increase there. The yuan is also accepted at China's borders with countries such as Russia, Mongolia, Vietnam, Myanmar and Nepal.

The central bank spokesman said that credit cards, remittance or cheques are sometimes inconvenient for consumers due to a lack of business outlets.

He said the loosening of the renminbi limit has minor possibilities of impairing the domestic economy.

"We have signed settlement agreements with banks based in Hong Kong, Macao and some neighboring countries, which will ensure the flow-back of renminbi," he said.

At present, money in circulation accounts for a slight 8 percent of the country's total money supply -- the proportion is still diminishing. The ratio of renminbi circulated overseas to money supply is even smaller. "So, the impact (of the central bank decision) on the domestic economy would be very little," he said.

The central bank spokesman vowed to beef up anti-laundering efforts by watching more closely on suspectable funds and cracking down on underground money shops and illegal cross-border money flow, as well as counterfeit notes, while cooperating with anti-laundering authorities with neighboring countries and regions.