Recent China Development – Outbound Investment In Renminbi

BACKGROUND

Due to the recent strong desire to convert Renminbi ("RMB") funds into foreign currency and remit foreign currency amounts outside of China ("China" or the "PRC", which excludes Hong Kong, Macau and Taiwan for purposes of this discussion), the State Administration of Foreign Exchange of China ("SAFE") and the Chinese banks have slowed down the process for foreign currency conversions. In practice, after PRC investors obtain required regulatory approvals from, or complete filings with, the National Development and Reform Commission and the Ministry of Commerce or their respective provincial counterparts ("Regulatory Approvals"), their conversion and remittance of outbound investment capital may be subject to a further scrutiny of the competent branch of SAFE and Chinese banks which handle such conversions and remittances. As a result, remittances of foreign currency amounts overseas for purposes of outbound investments have taken longer than before.