New forex rules to cut costs for traders
By Feng Jianmin |
July 31, 2012, Tuesday
|
Print Edition
Print Edition
MORE than 40,000 trading companies in Shanghai are expected to benefit from new foreign exchange settlement rules which take effect from tomorrow, trimming trading companies' paperwork and compliance costs.
Such companies account for nearly 10 percent of the country's total, and their combined export and import volume make up about 20 percent of China's trading, Shanghai Vice Mayor Tu Guangshao said yesterday.
He said that for a company with an annual trading volume of 10 million yuan (US$1.58 million), the new rules would save it compliance costs of 700,000 yuan a year, plus the one or two days it would have had to spend waiting for pre-deal checks.
"Time is money. The new rules are to help companies maintain their trading competitiveness against the current global economic slowdown," Tu said. "They also make it easier for companies to spend foreign currencies as the country strives for a balance of forex payments."
A trial program, begun in eight provinces and cities in December 2011, allowed easier export declarations, reduced export tax rebate procedures, and stopped pre-deal checks.
The State Administration of Foreign Exchange is also to team up with tax and Customs authorities to conduct after-deal checks and to crack down on illegal cross-border capital flows, or "hot money," tax fraud and smuggling.
"It is a significant reform that facilitates trading, changes foreign exchange management focus, and lifts the requirement for regulators," he said. "Shanghai as a major trading port of China should implement the changes more effectively."
The Shanghai headquarters of the central bank said that implementing the new rules would help Shanghai realize its goal to become a global financial and trading center.
It said it would help train the 40,000 trading companies and more than 100 selected banks.
In the first half of this year, China's foreign trade rose 8 percent year on year to US$1.84 trillion, much slower than the 31.7 percent increase registered during the same period of last year, China Customs data showed. In Shanghai, trade volume hit US$392 billion in the first half, edging up 2.4 percent from a year ago, Shanghai Customs said.
Such companies account for nearly 10 percent of the country's total, and their combined export and import volume make up about 20 percent of China's trading, Shanghai Vice Mayor Tu Guangshao said yesterday.
He said that for a company with an annual trading volume of 10 million yuan (US$1.58 million), the new rules would save it compliance costs of 700,000 yuan a year, plus the one or two days it would have had to spend waiting for pre-deal checks.
"Time is money. The new rules are to help companies maintain their trading competitiveness against the current global economic slowdown," Tu said. "They also make it easier for companies to spend foreign currencies as the country strives for a balance of forex payments."
A trial program, begun in eight provinces and cities in December 2011, allowed easier export declarations, reduced export tax rebate procedures, and stopped pre-deal checks.
The State Administration of Foreign Exchange is also to team up with tax and Customs authorities to conduct after-deal checks and to crack down on illegal cross-border capital flows, or "hot money," tax fraud and smuggling.
"It is a significant reform that facilitates trading, changes foreign exchange management focus, and lifts the requirement for regulators," he said. "Shanghai as a major trading port of China should implement the changes more effectively."
The Shanghai headquarters of the central bank said that implementing the new rules would help Shanghai realize its goal to become a global financial and trading center.
It said it would help train the 40,000 trading companies and more than 100 selected banks.
In the first half of this year, China's foreign trade rose 8 percent year on year to US$1.84 trillion, much slower than the 31.7 percent increase registered during the same period of last year, China Customs data showed. In Shanghai, trade volume hit US$392 billion in the first half, edging up 2.4 percent from a year ago, Shanghai Customs said.
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