In this Tax Flash, we aim to provide you an overview
of the current practice on exchange control in China and highlight
the common exchange control issues encountered by foreign
investment enterprises operating businesses in
China.
1. CURRENT
ACCOUNT
ITEMS
1.1. International Trade
In theory, RMB is freely convertible for all current account
items. No specific approval by the local administration of foreign
exchange would be required. Commercial banks in China could review
the relevant documentation and arrange settlement of imports by
remitting RMB or converting RMB into USD for remittance out of
China; or arrange receipt of RMB or USD funds receipts and in
respect of exports settlement. In practice, stringent control is
still imposed on cross-border settlement. Before mid 2012, foreign
investment enterprises ("FIEs") are required to have its
exports out of China be collected within 180 days in general.
Otherwise, they would be considered as not in compliance
