Central bank reassures foreign-invested firms on profit repatriation

An employee at a bank counter in Nantong, Jiangsu province, counts renminbi and dollars. [Photo/China Daily]

BEIJING - Repatriation of profits by foreign-invested companies can be handled normally, China's central bank said on Tuesday.

China has achieved convertibility under the current account and real and legal international payments and transfers are not restricted, including those of dividend and goods and services trade, said the People's Bank of China in a statement.

The statement said the procedures can be handled directly by commercial banks with real and effective transaction documents. If foreign-invested companies have any problems repatriating profits, they can report them to the central bank or the country's foreign exchange regulator.

Weighed on by a weak Chinese yuan against the US dollar, regulators moved to crack down on illegal cross-border capital flows, while reiterating that normal business will not be affected and foreign investment is still welcome.

China's foreign exchange regulator has approved a larger amount of foreign investment in the country's onshore financial market, official data showed on Monday.

As of Feb 27, 278 Qualified Foreign Institutional Investors (QFII) had received quotas totaling $89.21 billion, up from $87.31 billion registered at the end of January, according to the State Administration of Foreign Exchange (SAFE).

In total, 181 overseas institutions have received quotas totaling 541.13 billion yuan ($80.75 billion) under the RMB Qualified Foreign Institutional Investors (RQFII) program. A month earlier, the quotas totaled 529.63 billion yuan.

To gradually liberalize the capital account, the government introduced the QFII and RQFII programs in 2003 and 2011, respectively, part of China's strategy to promote the yuan's use overseas.