China to simplify procedures concerning capital account management
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China's foreign exchange regulator announced Friday that it will simplify some procedures regarding the management of capital accounts in a bid to encourage trade and investment.
According to the new requirement, which becomes effective on June 1, companies will not need to register with the local foreign exchange authority for deferred payment under the trade credit registry regulation.
They will also not be required to register when they need to reverse the exchange for advance payment, according to the announcement posted on the website of the State Administration of Foreign Exchange (SAFE).
Foreign exchange remittance back home following the selling of state-owned stakes in overseas-listed companies can be directly conducted at designated banks, the SAFE said.
Local foreign exchange bureaus are also granted the right to approve and set the quota regarding bill of exchange guarantees by some designated banks.
Further, the new regulation will raise the benchmark ratio from 30 percent to 50 percent for advance payment under trade credit arrangements.
The SAFE said the adjustment will help reduce companies' costs and improve efficiencies.
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