China to further loosen control on forex purchases

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Last updated at: (Beijing Time) Saturday, March 06, 2004

China to further loosen control on forex purchases

China will further ease controls on foreign exchange purchases by individuals this year, a top official with the State Administration of Foreign Exchange (SAFE) has said.

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China will further ease controls on foreign exchange purchases by individuals this year, a top official with the State Administration of Foreign Exchange (SAFE) has said.

Guo Shuqing, director of the SAFE, said that China would step up measures to satisfy the reasonable needs of individuals for foreign exchange, and improve forex purchase services for students to study abroad.

Students currently intending to study abroad are allowed to purchase foreign currencies as the last step before leaving China,only after they have gone through all other required formalities. But a regulation planned for later this year would lift this restriction and simplify procedures, and students could purchase currencies at the beginning of their preparations for going abroadjust by presenting relevant documents.

Under a regulation issued by the SAFE on Oct. 1, 2003, the bank is required to sell foreign currencies directly to those who fund their own studies abroad if the required purchase is less than 20,000 US dollars and customers can provide materials to prove the use of the money. If the required amount is higher than 20,000 US dollars, the purchase has to be audited by local forex authorities.

The SAFE would also offer forex services to larger enterprises that plan to develop abroad, or just for attending or holding exhibitions, said Guo, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), China's top advisory body, who is attending the annual session of the CPPCC .

A specific regulation on transferring emigrants' legal assets abroad would also be made this year, he said.

"The SAFE has prepared a mature plan in this regard, and a new regulation will be made public within the year," said Guo.

However, he declined to elaborate on details, such as whether an upper limit for the assets to be transferred would be set, and how to define the legality of the private assets.

An earlier report in Beijing Youth Daily quoted Yi Xianrong, ofthe Financial Studies Institute of the Chinese Academy of Social Sciences, as saying that forex departments would not set an upper limit for private property to be transferred abroad, if the assetscould be proven legal.

"China is expected to follow the international practice and take into consideration the country's actual conditions to stipulate its own regulations in this respect," he said.

Source: Xinhua

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