China's foreign exchange watchdog has issued tighter controls on currency settlements involving firms with foreign investors or owners. The Shanghai Securities News reported on Thursday that the State Administration of Foreign Exchange will issue specific rules on the management of yuan earnings from currency settlements.
In addition, it will expand its checks on the capital flow of foreign-owned firms and the use of yuan made from foreign exchange settlements. Analysts say improper currency settlements are one channel for the illegal influx of speculative funds from abroad. And that the new rules will tighten controls over such flows. China has been battling the influx of foreign speculative money.
In July, the forex regulator began requiring export revenues to put in temporary verification accounts, so officials could confirm that invoices reflected genuine trades and weren't being padded.
(CCTV September 5, 2008)
