FIE Financing and the New Foreign Debt Measures

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The PRC's new Foreign Debt Administration Tentative Procedures set out tighter foreign debt registration requirements, while collecting and putting a high-level government imprimatur on various policies and practices.

Once implemented,1 the Foreign Debt Procedures will tighten supervision, by the State Administration of Foreign Exchange (SAFE), of foreign financing of Foreign-invested Enterprises (FIEs), will make it necessary for foreign lenders to obtain proof that their loans to FIEs and other PRC borrowers have been registered, and will strengthen classification and supervision of foreign funds borrowing, security, usage and repayment by all PRC borrowers. Only trade credit is likely to escape the general tightening.

Registration Now a Condition of Foreign Debt Validity

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