Here are some policies to get implemented soon: "Starting on Dec 17, foreign investors won't need to get regulatory approval to open bank accounts, remit profits, and transfer money between different domestic accounts," As reported by AsiaOne. "And the limits on the number of foreign currency accounts and the amount of money that can be transferred will also be loosened."

SAFE plans to cancel 35 rules on regulatory approval and simplify 14 others. China could expect a major influx of FDI inflows. SAFE already made its intentions clear in a statement on its Website.

"An improvement in international financial markets coupled with China's relatively strong economic growth will make it easier for the country to attract long-term and stable capital inflows, while uncertainty in the global economy and unstable market sentiment might cause more short-term volatility."

The measures could signal that Beijing seeks to open Shanghai's stock market to more foreign investors as well. The Shanghai Stock Exchange has imposed stiff investment quotas and stringent regulations on foreigners. However, Chinese officials may have concluded that there's a stronger need for more foreign capital inflows.

Zhou Xiaochuan, central bank governor of the People's Bank of China told AsiaOne that, "the move to facilitate capital flows related to direct investment and vowed to improve capital account convertibility."

Zhou contends that the validity of capital controls has been declining as financial opening-up deepens, and China's need to further open up its capital account by extending convertibility for certain transaction and individuals.

Perhaps, China may not see annual economic growth rates soaring into the double-digits again, but the easing of foreign capital rules can offer a better business climate for foreign investors.

The views do not necessarily reflect those of China Daily.

McGregor@chinadaily.com.cn

 

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