China Daily quoted the State Administration of Foreign Exchange said China's foreign financial assets rose 23% last year to reach a total of USD 2.92 trillion.

The foreign exchange regulator said of that amount nearly USD 2 trillion, or 67% were foreign exchange and gold reserves. The outbound direct investment however was just USD 169.4 billion accounting for 6% of the total foreign financial assets.

According to the draft rule the regulator also issued a draft rule on Monday to boost outbound direct investment and indicated that it would expand the sources of capital available for companies to invest abroad. Domestic institutions will be able to buy foreign exchange or use foreign currency owned by themselves or borrowed from Chinese banks to invest abroad. The institutions can also reinvest the profit from overseas investments.
Experts said the easing of foreign exchange control on domestic companies' outbound direct investment is likely to help the country manage its foreign exchange more prudently.

The foreign exchange administrative body also said on that it plans to ease approval procedures as part of revised rules. It said companies would now be able to register the source of their foreign currency funding after investing abroad instead of the pre investment vetting required now.

SAFE would also standardize the procedure for companies to seek approval for foreign investments, instead of the case by case system. But it added that any significant foreign investment would still require approval from other authorities.

SAFE said in the statement that "This is aimed at implementing the going out development strategy as well as for promoting and facilitating overseas direct investment by domestic institutions.”

Meanwhile, China's Ministry of Commerce has urged domestic companies to ramp up overseas investments. The ministry said in a statement "The global financial crisis has made a profound adjustment to world economic geography."

(Sourced from China Daily)