Foreign investment into China is expected to be boosted as the State Administration of Foreign Exchange (SAFE) will streamline approval procedures for foreign exchange business applications under the capital account category, reported China Daily Friday.
The SAFE's local bureaus will be empowered to take over 10 foreign exchange categories, including applications for opening capital accounts by foreign-funded enterprises, external transfer of personal property, and some types of exiting market under securities investment account, according to a circular released by the SAFE Wednesday. The new rules will take effect from June 1.
The move aims to simplify procedures and facilitate foreign investment and trade, SAFE said on its website.
"compared to FDI, which takes rather long for investment decisions, the measure will have a more immediate effect in triggering foreign investment in the capital market," Li Xiaogang, director of the Foreign Investment Research Center under the Shanghai Academy of Social Science, told the paper.
But the move did not mean that China would loosen controls on foreign exchange management, said experts.
"It just means SAFE will be more efficient in approving foreign investment applications", said Li.
Foreign investment in China's financial and non-financial sectors fell significantly last year against the backdrop of the global economic recession.
The combined foreign direct investment inflow to China was 160.9 billion U.S. dollars in 2008, up 8 percent from a year ago, but was 65 percentage points slower, SAFE said in a report on China's balance of payments in 2008.
Source:Xinhua
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