China has issued new controls on transfers of foreign currencies, moving to contain growth in its foreign exchange reserves and curb speculative inflows blamed on fueling inflation.
The new rules, issued late on Wednesday with immediate effect, call for penalties of up to 30 percent of the capital involved in any unauthorized inward or outward foreign currency transfers.
“As China’s economy becomes more internationalized and the movement of international capital flows accelerates, there is a need to improve the system and oversight of multinational capital movements,” the State Administration of Foreign Exchange (SAFE) said in a statement on its Web site.
The new regulations appear broader in scope than new limits announced by SAFE last month that called for officials to check invoices to ensure they are not being inflated as an excuse to bring unauthorized money into the country.
The new rules order government departments to simplify regulations on foreign direct investment (FDI) and authorizes them to crack down on illegal transactions.
SAFE’s statement noted a need to protect against the risks of such movements and to increase the level of transparency in managing them.
Economists say that billions of dollars in speculative money have flowed into the country, seeking higher returns as the value of the Chinese currency has risen against the US dollar. Such investments, often in real estate or stocks, inflate the money supply, adding to pressure for prices to rise at a time when inflation is already at 12-year highs.
The government closely monitors money that enters the country for trade and investment and does not allow China’s currency to trade freely on world markets.
The government does not release figures on how much unauthorized money is believed to enter China. But Xinhua news agency, citing unidentified analysts, put the figure at US$147.9 billion in the first five months of this year.
“The inflow of hot money has had some negative impact on the economy. It is hoped that the regulation can enhance monitoring and control some speculative investment and foreign capital inflows,” Xinhua quoted Zhang Ming (張明), an expert at the Chinese Academy of Social Sciences, as saying.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2