Announcement Concerning the Experimental Implementation of Conversion and Sales through Banks of Foreign Exchange Required by Foreign Investment Enterprises
To speed up the process of the Renminbi's (RMB) convertibility under current account and to improve the operating environment of foreign investment enterprises, and after approval by the State Council, the People's Bank of China starts experiment in Jiangsu Province and the cities of Shanghai, Shenzhen and Dalian with conversion and sales through banks of foreign exchange required by foreign investment enterprises.
Such experimental work mainly include:
- In regions where the experiment is undertaken, foreign investment enterprises may convert or sell foreign exchanges at the authorized foreign exchange banks, or they may continue to buy or sell foreign exchange through the foreign exchange regulation center.
- Foreign investment enterprises in experimental regions may, depending on their needs, open a basic foreign exchange account for current account revenues and expenditures and a special-purpose foreign exchange account for capital funds at the authorized foreign exchange banks.
The People's Bank of China authorizes the State Administration of Exchange Control to determine the maximum amount of foreign currency that may be retained by a foreign investment enterprise in its basic foreign exchange account, based upon the actual investment of the foreign investment enterprise and the requirement of its foreign exchange turnover under current account, and in line with the currency policies stipulated by the People's Bank of China.
3. Foreign-owned banks in experimental regions may handle foreign exchange conversion and sales required by foreign investment enterprises and become authorized foreign exchange banks.
The "Administrative Regulations on Foreign Exchange Conversion, Sales and Payment in Experimental Regions" formulated by the People's Bank of China shall apply to foreign investment enterprises in experimental regions which convert and sell foreign exchange through banks. The experimental work shall be implemented as of March 1, 1996.