Forex regulator makes Chinese outbound investment easier

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    clpstaff &clp articles

    Government oversight to be tightened

    New regulations on the funding of overseas subsidiaries will make it easier for more Chinese companies to invest abroad. Meanwhile, a separately-issued rule makes it clear that the government wants investments to be made strategically.

    After August 1 2009, when the Circular on Issues Relevant to Foreign Exchange Control on Granting of Overseas Loans by Enterprises in China (关于境内企业境外放款外汇管理有关问题的通知) issued by the State Administration of Foreign Exchange (Safe) takes effect, Chinese companies will be able to lend up to 30% of their equity to their overseas subsidiaries for use as debt capital.

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