<div class="textg" style="text-align: justify;font-weight: lighter;line-height: 1.3em;font-size: 15px;border-radius: 3px;color: #80909a;padding: 10px;background-color: #F4F6F9;margin-bottom: 15px">
  Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions. 
</div> 
<p class="has-drop-cap">In August, the amount of capital invested by overseas investors <a aria-label="tumbled to a record quarterly low (opens in a new tab)" href="https://www.gov.cn/lianbo/bumen/202308/content_6896749.htm" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">tumbled to a record quarterly low</a> amid a notable drop in business confidence. As a result, the governments in Beijing and Shanghai have <a aria-label="proposed to relax capital rules (opens in a new tab)" href="https://edition.cnn.com/2023/09/22/economy/china-loosens-capital-controls-intl-hnk/index.html" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">proposed to relax capital rules</a>, which would allow foreign companies and individuals to move money in and out of the country without restrictions.&nbsp;</p> 
<h3 id="china-s-government-steps-in-as-investors-confidence-fades">China’s Government Steps in As Investors’ Confidence Fades</h3> 
<p>Chinese authorities alleviated capital rules for foreigners, allowing individual investors and companies in Shanghai and Beijing to move their money freely in and out of the country.&nbsp;</p> 
<p>The move comes as part of China’s plan to attract overseas investors weeks after official data revealed that foreign direct investment (FDI) tumbled to a record quarterly low due to waning business confidence. According to disclosed data, direct investments by international investors totaled $4.9 billion in Q2, marking an 87% drop year-over-year and the worst slump since 1998 – when comparable data first became available.&nbsp;</p> 
<p>The sharp decrease as investors and businesses cooled down on China amid the ongoing <a href="https://tokenist.com/chinas-biggest-property-developer-expects-to-post-7-6b-loss-for-h1-2023/" rel="noopener noreferrer nofollow" class="deco-link">property market crisis</a>, which then <a href="https://tokenist.com/msci-china-index-continues-losing-streak-down-8-this-year/" rel="noopener noreferrer nofollow" class="deco-link">weighed on the country’s stocks</a>.&nbsp;</p> 
<p>To offset the decline, China allowed foreign investors at the Shanghai pilot free trade zone to remit their funds with no restrictions or delay. The statement by the Shanghai government said the funds must be “real and [legally] compliant” and related to their investments in China. The new rules do not apply to mainland China residents.&nbsp;</p> 
<div class="cta-referral"> 
 <img src="https://tokenist.com/wp-content/themes/thetokenist/assets/img/del/cta-referral-1.png" alt="" class="cta-referral__img" loading="lazy" decoding="async"> 
 <div class="cta-referral__text"> 
  <p>Join our&nbsp;<a href="https://t.me/thetokenist" target="_blank" rel="noopener noreferrer nofollow">Telegram group</a>&nbsp;and never miss a breaking digital asset story.</p> 
 </div> 
</div> 
<h3 id="original-capital-controls-for-foreign-investments-in-china">Original Capital Controls for Foreign Investments in China</h3> 
<p>On the same day, the government of Beijing proposed similar rule relaxations to facilitate cross-border fund flows for overseas businesses.&nbsp;</p> 
<p>The moves by Shanghai and Beijing authorities represent a significant shift given that China typically <a href="https://www.tradecommissioner.gc.ca/china-chine/control-controle.aspx?lang=eng" target="_blank" aria-label="maintains (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">maintains</a> a “closed” capital account – meaning companies and individual investors cannot transfer funds in and out of the nation except in line with stringent rules.&nbsp;</p> 
<p>According to the original State Administration of Foreign Exchange (SAFE) regulations, foreign-invested enterprises (FIEs) may find that repatriating capital or profits out of China can include heightened layers of scrutiny from the government. Because the amount of outbound direct investment (ODI) hit record levels recently, China introduced strict capital controls at the end of 2016.</p> 
<p>The scrutiny of ODI varies based on the amount of capital being transferred, the target industry, the receiving nation, and the investor.&nbsp;</p> 
<div class="cta-sub js__cta-sub"> 
 <div class="cta-sub__start" data-step="1"> 
  <div class="cta-sub__title"> <strong>Finance is changing.</strong> 
  </div> 
  <div class="cta-sub__subtitle">
    Learn how, with Five Minute Finance. 
  </div> 
  <div class="cta-sub__excerpt">
    A weekly newsletter that covers the big trends in FinTech and Decentralized Finance. 
  </div> <button type="button" class="btn">Try it out (for free)</button> 
 </div> 
 <div class="cta-sub__form" data-step="2" style="display: none;"> 
  <script type="text/javascript" src="https://app.getresponse.com/view_webform_v2.js?u=QcLhh&amp;webforms_id=zw3Wv"></script> 
 </div> 
 <div class="cta-sub__result" data-step="3" style="display: none;"> 
  <div class="cta-sub__title">
    Awesome 
  </div> 
  <div class="cta-sub__caption">
    You’ve subscribed. 
  </div> 
  <div class="cta-sub__greeting">
    You’re well on your way to being in the know. 
  </div> 
 </div> 
</div> 
<p><em><strong>Do you think China’s latest rule changes could help bring back confidence among foreign investors? Let us know in the comments below.&nbsp;</strong></em></p> 
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/china-relaxes-capital-rules-for-foreigners-as-fdi-hits-quarterly-low/">China Relaxes Capital Rules for Foreigners as FDI Hits Quarterly Low</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

China Relaxes Capital Rules for Foreigners as FDI Hits Quarterly Low

Table of Contents

Tokenist

Other articles published on Sep 22, 2023

Spot ETF Approval Could Unlock $300 Billion for Bitcoin, Says Morgan Creek Capital CEO

Whale Tarik Banyak LINK dari Binance, Tanda Kelanjutan Bullish?

Moscow court sentences ex-BTC-e administrator to 3.5 years in prison

Is Wall Street’s crypto acknowledgment just for show or…?

Crypto Platform Bybit to Suspend UK Operations Starting October 8 – What's Going On?

A16z Investor Challenges Sequoia’s AI Infrastructure Oversaturation Perspective

Join our free newsletter for daily crypto updates!