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China tightens supervision of trade payments
AFP - 40 minutes ago
SHANGHAI (AFP) - - Chinese companies have been told to register foreign debt owed by international firms under trade in a move by the foreign exchange regulator to prevent money leaving the country.
State Administration of Foreign Exchange has stepped up supervision of capital flow since the credit crisis due to concerns that sudden outflows could hurt domestic economic growth, the Shanghai Securities News reported Tuesday.
The move also aims to tighten control of cross-border funds.
Companies should register advance payments for imports and delayed payments due on exports with the exchange starting November 15, the agency said in a statement on its website.
The new rules were to "improve the supervision and management mechanism of foreign debt claims, regulate capital flows across the board under trade and promote a balance of international income and payments," it said.
The rules will "prevent intensive capital flight and prevent any excessive impact of that on China's economy," Ding Zhijie, an economist at Beijng-based University of International Business and Economics, was quoted by the Securities News as saying.
The regulator will also set quotas for companies' advance payments on imported goods to help reduce exposure to losses due to foreign firms failing to deliver goods, the notice dated October 30 said.
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