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	ANNOUNCEMENT OF THE PEOPLE'S BANK OF CHINA

	(Announcement of the People's Bank of China (No. 5 [2006]), April 13, 2006)


SUBJECT : FOREIGN EXCHANGE MANAGEMENT POLICIES; ADJUSTMENTS
ISSUING DEPARTMENT : PEOPLE'S BANK OF CHINA
ISSUE DATE : 04/13/2006
IMPLEMENT DATE : 04/13/2006
LENGTH : 464 words
TEXT :

In order to deepen the foreign exchange management mechanism reform, support the facilitation of trade and investment, further cultivate the foreign exchange market and promote the basic international balance of payments, upon approval of the State Council, we hereby announce the matters regarding the adjustment of foreign exchange management policies as follows:

I. With respect to the opening, alteration and closing of current foreign exchange accounts of the enterprises, the examination and approval in advance shall be adjusted as the direct handling of the bank according to the foreign exchange management requirements and the archival filing of the foreign exchange bureau. The limits for the current foreign exchange accounts of the enterprises shall be enhanced. The enterprises that have real transactions and need to pay foreign exchange to the outside shall be allowed to purchase foreign exchanges in advance.

II. Banks shall simplify the vouchers for the sale and payment of foreign exchange in the service trade, and relax the examination and approval power thereof.

III. Banks shall further simplify the formalities for foreign exchange purchase by domestic citizens, raise the quota of foreign exchange purchase and implement the management of total annual amounts. If an individual purchases foreign exchange within the limit, he shall, upon the strength of his real identity certification, purchase foreign exchange from and declare their purposes to the bank; and if an individual purchases foreign exchange by exceeding the limit, the bank shall offer foreign exchange in light of the actual demands after examination of the relevant vouchers.

IV. The overseas foreign exchange financial management business of domestic banks on behalf of their clients shall be broadened, and the qualified banks shall be allowed to gather the Renminbi capital of domestic institutions and individuals and use them for purchasing foreign exchange for investing in the overseas products with fixed proceeds.

V. The qualified fund management companies and other securities management institutions shall be allowed to gather the self-owned foreign exchange of domestic institutions and individuals within a certain amount for the purpose of the overseas portfolio investments, including the stocks.

VI. Banks shall develop the business of overseas securities investments by insurance institutions, permit qualified insurance institutions to purchase foreign exchange for investing in overseas products with fixed proceeds and money market instruments, and shall control the amount of foreign exchange purchase in light of a certain proportion of total assets of an insurance institution.

The People's Bank of China shall, together with the relevant department, organize the implementation of the above-mentioned policies and measures in real time and item by item. At the same time, the People's Bank of China shall closely follow up and analyze the international balance of payments, timely adjust the relevant policies, practically guard against risks and maintain the national economy and financial safety.