Overseas Chinese allowed to tranfer RMB
By Xu Binlan (China Daily)
Updated: 2004-11-17 00:54

New laws governing the transfer of personal wealth will take effect from next month, China's central bank announced Tuesday.

The move represents a fresh approach by China's financial authorities in their pursuit for freer capital flow and a more flexible foreign exchange policy.

"The relaxation of the restrictions is a major breakthrough in the regulation of the personal assets transfer," the People's Bank of China said in a statement.

"It will also push forward the process of the making the renminbi fully convertible."

From December,

 Chinese citizens moving overseas will be able to legally convert their personal assets into foreign currency and transfer them out of China.

Currently, there is no official channel for such transactions. Many Chinese people moving overseas use illegal ways to transfer their assets.

The rules also cover inheritance money.

People wishing to transfer their assets overseas should apply to the State Administration of Foreign Exchange or to one of its branches.

The rules also apply to Chinese citizens moving from the mainland to Hong Kong and Macao. Personal asset transfers from the mainland to Taiwan can also be serviced , the central bank said.

China's currency is not yet fully convertible and the central bank has yet to announce a timetable for the yuan's total liberalization -- a move the government says is the country's eventual goal.

In recent years, the financial authorities have taken a series of measures to ease control over international capital flow.

These included permitting Chinese enterprises involved in international business to retain more foreign currency holdings, the relaxing requirements for Chinese companies' investing in activities abroad, and allowing individuals travelling or studying overseas to convert more renminbi into foreign currencies.

Despite the relaxation on capital flow, China's foreign exchange holdings continued to grow, thanks to a trade surplus and swelling foreign direct investments.

By the end of September, the country's foreign exchange reserves stood at US$514.5 billion.

"The strengthening economic fundamentals created conditions for allowing the transfer of personal assets to overseas," the central bank said in the statement.

The new rules will help better protect property rights, the central bank statement claimed.

"When people can not transfer their personal funds as they wish, they cannot fully exercise their property rights," it said.

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