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Pan: China’s financial reform won’t scale back
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CHINA will not block money flows out of the countries as the authorities vow to drive financial opening-up despite capital outflow pressure, the head of China’s foreign exchange regulator said in an interview published today.
“Once opened, the window won’t be shut again,” Pan Gongsheng, chief of the State Administration of Foreign Exchange and a deputy governor at the People’s Bank of China, told the China Business News as he introduces priorities in China’s foreign exchange policies.
The priorities are continuing financial reforms and opening up while preventing risks and maintaining market stabilities, according to Pan.
He said foreign exchange regulators’ recent measures to tighten overseas investment were selective, aiming at restricting blind and irrational outbound investment.
China won’t return to the old ways of controlling capital flows, and will merge more closely with global financial practices as authorities insist on financial reforms and opening up, Pan said.
The comments were made as China enhanced inspection on money flows out of the country under continued capital outflow pressure amid yuan depreciation.
Actions include tighten individuals’ transfer and conversion of foreign exchanges, limit individuals’ use of bank cards to purchase insurance policies, and enhance scrutiny on companies’ overseas investment.
The yuan lost more than 6 percent against the US dollar last year, extending a 5.8 percent depreciation in 2015.
Latest data showed China’s foreign exchange reserves fell in January below the US$3 trillion mark for the first time in 6 years.
The reserves fell in the past two years from a peak of US$3.99 trillion in June 2014 due to China central bank’s use of the reserves to stabilize exchange rate, companies’ overseas investment, individuals’ increasing overseas expenses, and domestic companies’ payment of foreign debts.
Pan denied newspaper reports that China has limited foreign-invested companies’ outbound transfer of profits.
He stressed that the payment can be made with required documents according to Chinese laws.
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