China strengthens check on forex business to curb hot money inflows

10:04, November 10, 2010      

Email | Print | Subscribe | Comments | Forum 

China's foreign exchange regulator on Tuesday introduced measures to increase checks on the foreign exchange businesses and further curb inflows of hot money.

The move came a week after the U.S. Federal Reserve announced a new round of "quantitative easing," raising concerns about excessive liquidity.

The State Administration of Foreign Exchange (SAFE) said in a statement on its website that it would strengthen auditing of fund repatriation by Chinese companies listed overseas, and of inbound investment by foreign-invested companies.

The SAFE also set a floor on the size of foreign exchange positions for banks operating here, and said bank's daily net U.S. dollar positions should not be less than that of the previous day.

It would also strictly supervise financial institutions' quotas for the use of short-term foreign debt and prevent banks from overusing their quotas, the statement said.

The SAFE said the measures were aimed at maintaining China's economic and financial security.

On Nov. 1, the SAFE published a list of companies and individuals who had been fined for falsifying contracts and claims for the use of speculative capital during foreign exchange deals.

Zhou Xiaochuan, governor of the People's Bank of China, said Friday that Chinese regulators would work to prevent abnormal capital inflows by bolstering foreign exchange controls and maintaining overall liquidity at a proper level.

He warned that the second round of "quantitative easing" by the United States might have a negative impact on the global economy, and flood the global economy, especially emerging economies, with liquidity.



  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Chinese Navy soldiers hold an evening party marking the upcoming 62nd National Day aboard Chinese Navy hospital ship "Peace Ark" in the Pacific on Sept. 28, 2011. The Chinese National Day falls on Oct. 1. (Xinhua/Zha Chunming)
  • Photo taken on Sept. 30, 2011 shows the crowd at the plaza of Beijing Railway Station in Beijing, capital of China. The railway transportation witnessed a travel peak with the approach of the seven-day National Day holidays on Friday. (Xinhua)
  • A man wearing high-heel shoes takes part in the 3rd annual Walk a Mile in Her Shoes, an event when men literally walk in women's shoes to raise awareness about ending violence against women, at Yonge-Dundas Square in Toronto, Canada, Sept. 29, 2011. (Xinhua/Zou Zheng)
  • Photo taken on Sept. 29, 2011 shows a cargo ship in danger on the sea near Zhuhai City, south China's Guangdong Province. Cargo ship Fangzhou 6 of Qingzhou of southwest China's Guangxi Zhuang Autonomous Region lost control after water stormed into its cabin due to Typhoon Nesat on the sea near Zhuhai Thursday, leaving 12 crew members in danger. Rescuers rushed to the ship and saved them by using a helicopter. (Xinhua)
  • Actress Gong Li poses for L'Officiel Magazine. (Xinhua Photo)
  • Demonstrators from the Occupy Wall Street campaign hold placards as they march in the financial district of New York September 29, 2011. After hundreds of protesters were denied access to some areas outside the New York Stock Exchange on September 17, demonstrators set up a rag-tag camp three blocks away. Zuccotti Park is a campground festooned with placards and anti-Wall Street slogans. The group is adding complaints of excessive police force against protesters and police treatment of ethnic minorities and Muslims to its grievances list, which includes bank bailouts, foreclosures and high unemployment. (Xinhua/Reuters Photo)
Hot Forum Discussion