The foreign exchange regulatory agency of China would be abolishing twenty four different regulations that apply to the administration of funds for foreign direct investment transactions. The move is in line with the instructions made by the State Council to decrease red tape and increase transparency in all dealings.
The rules to be removed include the reinvestment of the yuan by foreign companies as well as for overseas property purchases done by individuals. These instructions were contained in a circular released on the State Administration of Foreign Exchange website just today.
The changes would take effect on May 13 and is part of the larger policy by the Chinese government to reform the framework regulations related to foreign direct investments, outbound investments and capital monitoring. According to the regulator's website, "It would make the regulations on FDI simpler, standardized and systematic."
Last December, China removed the ceiling on investments by overseas sovereign wealth funds and central banks for Chinese capital markets in order to encourage extended ownership as well as boost the slumping equities market.
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