China unveils new cross-border trade, investment facilitation measures

By Li Qiaoyi Source:Global Times Published: 2019/10/25 20:18:40

Photo: Xinhua

The State Administration of Foreign Exchange (SAFE), China's foreign exchange regulator, on Friday announced it will scrap controls on domestic equity investment made by non-investment foreign firms using their capital funds as part of deregulatory measures to facilitate cross-border trade and investment.

The new measures also include the expansion of a trial program which allows for easier foreign exchange receipts and payments from the merchandise trade currently in place in the Guangdong-Hong Kong-Macao Greater Bay Area, Shanghai and East China's Zhejiang Province, SAFE said on its website. 

Controls on the settlement and use of foreign exchange funds under the capital account will be eased and limits on the number of foreign exchange accounts opened under the capital account will be also lifted.

The new moves are intended to stabilize the country's faltering trade, Wu Jinduo, head of fixed income at the research institute of Great Wall Securities, told the Global Times on Friday.

In a sign of spillover from the China-US trade tensions, the country's imports and exports fell more than expected in September, according to customs data.

"The new trade facilitation measures are more concrete, creating conditions to manage the negative lists," said Wu, who is also a part-time research fellow of the Development Research Institute at Fudan University.

The new opening-up moves will also help to funnel long-term overseas funds into the domestic capital market, analysts said.

This comes after a flurry of financial deregulatory measures were recently unveiled that include the announcement of specific dates for foreign shareholding controls to be scrapped in the securities, fund management and insurance firms.

Overseas investors have shown optimism in the Chinese market, according to market figures.  

Overseas investors' net purchases of Chinese mainland shares hit $18.5 billion in the first three quarters, and their net purchases of Chinese bonds totaled $71.3 billion during the period, Wang Chunying, a spokesperson and chief economist with SAFE, said at a press conference on Friday. 

All the three major stock market indices - the Shanghai Composite Index, the Shenzhen Component Index and the ChiNext Index - closed higher on Friday.

Posted in: MARKETS

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