China urges foreign firms to help control cash leaving country

BEIJING • China's foreign exchange regulator has reportedly requested cooperation from multinational companies as the nation manages and controls the flow of capital from the country, the South China Morning Post (SCMP) has reported.

News of the request was made public on the website of regulatory body State Administration on Foreign Exchange (Safe) after its chief addressed a foreign business delegation last Wednesday.

"A stable and good foreign exchange market is in line with the common interests of regulators and market players and it requires joint efforts from all sides," Safe's Mr Pan Gongsheng was quoted by the website as saying, according to SCMP.

Foreign businesses have been experiencing tightened controls and vetting of outbound remittances and payments by China, as the country tries to stem the outflow of cash at a time when the yuan has weakened against the US dollar.

The outflow controls, which were introduced in late 2015, have put the brakes on outbound deals. China said it is merely implementing existing regulations.

Representatives of big multinationals like Sony, BMW and Visa were present at the meeting with the regulators, SCMP said, adding that details of the talks were not released on the Safe website.

Mr Joerg Wuttke, president of the European Union Chamber of Commerce in China, told SCMP that the meeting was very encouraging. "Mr Pan is very keen to know the technical issues that foreign industries have encountered in China," he said.

The controls have eased since the start of the year, but analysts expect the restrictions to stay in place for some time, given the major uncertainties facing global markets, SCMP reported.

A version of this article appeared in the print edition of The Straits Times on April 08, 2017, with the headline 'China urges foreign firms to help control cash leaving country'. Print Edition | Subscribe