Euro under attack by the Financial Times and the Wall Street Journal
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New Investment Channel Opens: Offshore RMB Funds
1. BACKGROUND
China, a country that has long been known to have the world’s most rigorous control over cross-border currency movements, has slowly embarked on a journey towards the internationalization of its own currency. After its first attempt in July 2009, when it introduced a pilot scheme to allow Renminbi (“RMB”) to settle cross-border trades, the offshore RMB market has exploded. Particularly, RMB deposits in Hong Kong ballooned to RMB553.6 billion yuan at the end of June 2011, according to the Hong Kong Monetary Authority. In response to calls for a direct investment channel to utilize the increasingly enlarged pool of RMB currency parked offshore to benefit China’s domestic economy, China’s Ministry of Commerce (“MOFCOM”), the People’s Bank of China (“PBoC”), and the State Administration of Foreign Exchange (“SAFE”) issued a series of circulars in 2010 and the first half of 2011 to allow offshore RMB funds to be repatriated back to mainland China for foreign direct investment (“FDI”) purposes.
Circular of the State Administration of Foreign Exchange and China ...
Circumlocutory of the State Administration of Foreign Exchange and China Security Regulatory Commission on the Pertinent Issues With regard to the Administration of Bargain-priced and Payment of Foreign Exchange in Abroad Reinsurance Ceding
The branches and departments of foreign exchange administration of the State Administration of Foreign Exchange （ SAFE ） in the provinces， autonomous regions， and municipalities unswervingly under the Medial Administration， the branches in Shenzhen， Dalian， Qingdao， Xiamen， and Ningbo； the designated foreign exchange banks； and the assurance companies：
In suitable to piece of equipment the Interim Provisions on the Foreign Exchange Administration of Surety Services， to run the reinsurance made in foreign exchange， and to effectively vanish assurance risks， the following devious is hereby made respecting the apt matters of the administration of rummage sale and payment of foreign exchange in abroad reinsurance ceding： 1. The house-broken Chinese-invested cover companies， Sino-foreign disinterestedness intersection protection companies， and branches of foreign warranty companies in China （hereinafter referred as residential security companies） that covenant in abroad reinsurance ceding upon ratification by the SAFE may， pursuant to the appropriate provisions of China Security Regulatory Commission （CIRC）， contract abroad reinsurance ceding of home insurances， and go through the formalities for toe-hold and payment of foreign exchange under abroad reinsurance ceding pursuant to the provisions hereof. Branches of domesticated guarantee companies may not go through the formalities for position and payment of foreign exchange under abroad reinsurance ceding.
2. Where a housekeeper cover gathering reinsured abroad any household indemnification made in foreign exchange， that establishment shall， by winning with it the valid proofs， such as reinsurance bill or reinsurance payment shopping list， etc.， turn out to be the reinsurance payments from its foreign exchange counter-intelligence agent account with a major-domo commercial bank， and may not win any foreign exchange to change the payment.
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