China to Make it Easier for Companies to Get Oversees Funds

Beijing has eased restrictions on Chinese companies seeking to raise funds overseas, after a record monthly decline in China’s foreign exchange reserves in August.

The decision to loosen capital controls on inbound funds stands to boost capital inflows at a time when big domestic stock market losses and the slowing Chinese economy are heightening concerns about capital outflows.

China’s top planning agency, the National Development and Reform Commission, has made it easier for Chinese companies to obtain foreign currency bank loans or issue renminbi bonds with a term of more than one year, according to a statement on its website dated Tuesday.

“The new policy will simplify the process for Chinese entities to issue offshore bonds. It will give Chinese companies flexibility in terms of timing and the amount of bonds issued as long as it is within the approved foreign debt quota,” said Ivan Chung, head of greater China credit research at Moody’s in Hong Kong.

Previously, companies needed approval on a deal-by-deal basis but now they are only required to register with the regulator. “Like Shanghai-HK Stock Connect, it is another step forward in integrating the Chinese financial market with the world,” Mr Chung said.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza