With China’s Xi administration pushing capital
account reform to boost renminbi internationalisation, counsel
in China and Hong Kong have revealed a tightening of
cross-border cash flows.
The People’s Bank of China (PBOC) announced on
October 30 that it was considering allowing individuals to
purchase overseas assets, as well as foreign companies to trade
RMB-denominated bonds in the Shanghai free-trade zone
But legal ambiguities and compliance confusion surrounds the
National Development and Reform
Commission’s (NDRC) recent circular on
offshore RMB bond issuance.
"The revised regime under the circular is a little bit more
restrictive than the previous one because previously offshore
PRC subsidiaries could access the offshore market, with no
problem, for funds for offshore use," said
Andrew Malcom, partner at Linklaters in Hong Kong.
The move to allow individuals to invest directly in overseas
assets was announced under the Qualified...