CHINA'S central bank loosened its currency policy ever so slightly on November 16, saying that Chinese emigrants would be allowed to take personal assets out of the country from next month - albeit in stages.
It also said foreigners who inherit Chinese assets would be allowed to take their inheritance offshore.
According to the new rule to be enacted December 1, Chinese citizens moving overseas will be able to legally convert their personal assets into foreign currency and transfer them out of China, which is "another step toward making the Renminbi convertible,"a statement made by the central bank said.
Currently China's currency can only be freely converted into foreign currency for overseas trade purposes. Many Chinese who have legally migrated have used underground channels to transfer their assets abroad, which has partly boosted illegal exchange transactions, a story from Bloomberg News said.
To prevent large sums of money from leaving China at once, emigrants would be required to move their money in several stages unless the amount is less than 200,000 yuan (US$24,000), it said. Specifically, emigrants would be able to move half their money as a first stage, then half of what is left a year later. They could move the rest of their money two years after the first transfer.
The rules also apply to Chinese citizens moving from Chinese mainland to Hong Kong and Macao. Personal asset transfers from the mainland to Taiwan can also be serviced according to the rules.
To prevent people from moving illegal assets, the central bank will check the status of the applicants and the source of their wealth. In extreme conditions, the central bank could change the quota and frequency of asset transfers to help maintain domestic financial stability.
Statistics showed that China's foreign reserves jumped 34 per cent in the first nine months to US$514.5 billion, creating conditions for allowing the transfer of personal assets overseas.
The new rules will help better protect property rights, as "when people cannot transfer their personal funds as they wish, they cannot fully exercise their property rights," it said. (Star-agencies)
Source: Shanghai Star
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