Trends of development in China s foreign exchange control regime


Trends of development in China's foreign exchange control regime

The ultimate goal of reform in China's foreign exchange control is to realize convertibility of RMB under capital account and gradually achieve full RMB convertibility. Since 1996, although China has experienced the shock of the Asian financial crisis and now faces the challenges and opportunities of its WTO accession , China's goals for the reform of its foreign exchange control regime have not changed.

In July 1997, when the Asian financial crisis exploded from Thailand, China was considerably affected. In order to resist the impact of the Asian financial crisis and combat illegal business and financial activities within China, a series of interim measures were adopted. These measures were intended to reinforce , on the premise of convertibility under current account and regulation under capital account, verification of the authenticity of foreign exchange receipts and payments on current account, thereby plugging up the loopholes in currency management to prevent capital flight. After a period of implementation, some adjustments were made in accordance with international practice and the level of impact made by such measures on the normal business activities of enterprises . Those measures that were in conformity with international practices and China's commitments and had not produced adverse effects on enterprise business activities were consolidated in the form of laws and regulations. Those that had had generated significant negative impacts were adjusted or abolished in a timely manner. All these efforts ensured that China's foreign exchange control regime evolved on a normal track of development.

China has joined the WTO, as a result of which it will further reduce tariffs, phase out non- tariff barriers and further open up the market. Accordingly, entities having foreign exchange receipts and payments will increase in number, leading to drastic increases in the total volume of foreign exchange transactions. China's foreign exchange control regime is facing greater opportunities as well as challenges. To comply with WTO agreement and rules, China will rectify and amend laws and regulations to meet the WTO accession requirements.

At the same time, China will also push ahead gradually and prudently the convertibility of the capital account based on the improvement and development of China's macro-economic situation.




Doing Business with China
Doing Business with China
ISBN: 1905050089
EAN: 2147483647
Year: 2003
Pages: 648
Authors: Lord Brittan

flylib.com © 2008-2017.
If you may any questions please contact us: flylib@qtcs.net