China tightens foreign exchange rules

Major concern has been sparked by the announcement of a massive reduction in the amount of US dollars that China’s foreign residents can exchange into Renminbi Yuan (RMB).
Foreign nationals are now allowed to change only up to US$ 50 000 a year into RMB at Chinese banks. To exchange more, evidence such as bills and invoices are required to be produced in support of the claim, according to China’€™s State Administration of Foreign Exchange (SAFE). Prior to the introduction of the new regulation, the limit was US$ 50 000 a month for expatriates.
At the same time, SAFE announced that the Chinese themselves can now use RMB to purchase up to a maximum of US$ 50 000, an increase of US$ 30 000 a year. The new limit has been established ’on a reasonable basis to restrain the entry of unregulated funds through individual channels’€™, according to a SAFE spokesperson.
But foreigners living in China – and especially businessmen – say the new policy is making life difficult. A US businessman reportedly observed: ‘€˜This is the way to keep you from living on money you get paid overseas. This is asking to create a black market economy. But this doesn’€™t surprise me because many foreigners get too much money paid offshore.’€™