The Chinese yuan (CNY), also known as renminbi (RMB), is not fully convertible.

In July 2005, the exchange rate was revalued to CNY8.11 per USD1. PRC now maintains a managed floating-rate system that allows the yuan to move against the US dollar within a narrow 3% parity range published daily by the People’s Bank of China (PBC). Non-USD currencies trading against the USD are allowed within a range as prescribed by the PBC.

CNY is convertible on current accounts, defined to include daily recurring business transactions and revenues, and expenditures from international trade in goods and services. Current account convertibility also applies to repatriation of profits by foreign-funded companies. In contrast, capital account items are direct investments, international loans and securities investments and include repayment of foreign debt principal, overseas investments, investments in foreign-invested enterprises, and remittances of Foreign Institutional Enterprises following liquidation.

The State Administration of Foreign Exchange (SAFE), under the supervision of the PBC, enforces exchange control rules and regulations. The PBC is the principal foreign exchange bank of the PRC.

Import/Export of Currencies

Exports - A maximum of CNY20,000 may be taken out of the PRC. For foreign currencies, residents may export up to USD10,000 or its equivalent in cash. Amounts exceeding USD10,000 may be exported by traveler’s check or other payment certificates. Residents and nonresidents taking out foreign currencies exceeding USD5,000 need to apply for a bank-issued License for Carrying Foreign Currencies Abroad (LCFCA). Amounts exceeding USD10,000 require LCFCA from the local SAFE office.

Imports - Residents and nonresidents may import up to CNY20,000. For foreign currencies, residents and nonresidents importing more than USD5,000 must file a customs report.

Domestic/Foreign Currency Accounts

SAFE authorizes the opening of foreign currency accounts by approved domestic or foreign-funded enterprises that have either managed rights or earn foreign exchange from current transactions. Foreign exchange funds in these accounts may be used for current account or capital payments with the approval of SAFE.
Nonresidents residing in PRC for a short time may open foreign currency savings accounts. Nonresidents may open CNY accounts without restriction.

Borrowing/Lending

By residents to nonresidents – Financial institutions authorized by the People’s Bank of China may lend to overseas institutions or contract overseas credits.

To residents from nonresidents – Medium- and long-term international commercial borrowing by PRC institutions must be incorporated in the state plan for the use of foreign capital, undergo transaction-based examination, and receive SAFE approval. Financial institutions permitted to engage in foreign borrowing may conduct short-term foreign borrowing with maturities of one year or less within limits set by SAFE. Specific transaction-based approval is not required. All foreign borrowing must be registered with SAFE.