China economic news

CNC
Added On January 1, 2018

The country's foreign exchange regulator has toughened the rules on overseas cash withdrawals from personal bank cards to curb money laundering, terrorist financing and tax evasion.
 
NEW RULES ON OVERSEAS CASH WITHDRAWALS
 
The State Administration of Foreign Exchange (SAFE) said the total amount of overseas cash withdrawals from all domestic bank cards owned by one person will be capped at 100,000 yuan, or about 15,300 U.S. dollars, per person each year.
 
If an individual exceeds the annual cap in a year, his or her overseas withdrawals will be suspended in that year and the following year.
 
Since 2003, the quota for overseas withdrawals has been 100,000 yuan per card each year. 
 
The new rules can prevent law breakers from withdrawing a large amount of cash with different cards from different banks.
 
In 2016, 81 percent of domestic cards saw overseas cash withdrawals less than 30,000 yuan. Thus, the new rules can meet normal cash needs and curb illegal activities.
 
The rules will become effective on Jan. 1, 2018. 
 
THREE IPO APPLICATIONS APPROVED
 
The Chinese securities regulator approved three IPO applications this week, which will raise up to one billion yuan, about 153 million dollars in the A-share market.
 
According to the China Securities Regulatory Commission (CSRC), two companies will be listed on the Shanghai Stock Exchange, and one on the ChiNext at the Shenzhen Stock Exchange.
 
The firms and their underwriters will confirm dates and publish prospectuses following discussions with the exchanges.
 
The move brings the number of IPO approvals to 401 in 2017.
 
China has sought to normalize IPOs to improve financing efficiency and direct more money into the real economy since it suspended IPOs between July and November 2015.
 
New shares are subject to official approval under the current IPO system, which is moving to a more market-oriented system.
 
MORE REVERSE REPO CONTRACTS TO MATURE
 
A total of 510 billion yuan, or 78 billion U.S. dollars, of reverse repo contracts are set to mature in China's money market in the coming week.
 
China's central bank has skipped open market operations for the past week, citing sufficient liquidity in the banking system.
 
A reverse repo is a process by which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
 
Rather than across-the-board rate cuts and reserve requirement ratio  adjustments, China has relied more on open market operations to inject or withdraw liquidity at different rates and for different time periods.
 
China will continue a prudent and neutral monetary policy in 2018 as the world's second-largest economy strives to balance growth with risk prevention.