China, Fighting Money Exodus, makes life tougher for companies and investors

By Wei Gu and Chuin-Wei Yap

Chinese officials are trying anew to slow a money exodus from the country, clamping down on individuals seeking to flee the yuan and making life tougher for companies that need to trade the currency for dollars to do business.

China’s foreign-exchange regulator in recent months has deployed a new system to monitor individual purchases of foreign funds and has asked banks to reduce foreign-currency transactions.

It has summoned bankers to its offices to give guidance and has grilled them when foreign-exchange activity spikes, according to executives at Chinese and foreign lenders.

Banks, in turn, have increased scrutiny of foreign-currency transactions by businesses ranging from Chinese entrepreneurs investing abroad to companies paying overseas bills.

A European chemicals manufacturer recently faced delays in Shanghai in obtaining U.S. dollars, threatening its deadline for an overseas licensing payment.

The Bank of Tianjin is having trouble getting funds from mainland investors for a planned Hong Kong public stock offering.

A water-treatment company struggled to withdraw $2,000 for an engineer to travel to the U.S.

To read entire article, click here...

No comments: