Laws of the People's Republic of China

State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Relevant Issues concerning Broadening the Reservation of Foreign Exchange Earnings under Current Account for Domestic Institutions

Hui Fa [2005] No.58

August 2, 2005

Branches and Exchange Administration Offices of the State Administration of Foreign Exchange in all provinces, autonomous regions, municipalities directly under the Central Government, Branches in the Cities of Shenzhen, Dalian, Qingdao, Xiamen and Ningbo:

In order to facilitate the domestic institution's use of foreign exchange and the trade, the State Administration of Foreign Exchange decided to re-raise the reservation percentage of foreign exchange under the current account of domestic institutions. And this Circular is hereby given as follows:

I.

Where the domestic institution's last-year foreign exchange disbursement under current account takes a part of less than 80% of its foreign exchange earnings under current account, its reservation percentage of foreign exchange under current account shall be readjusted from 30% of its last-year foreign exchange earnings under current account to 50%.

II.

Where the domestic institution's last-year foreign exchange disbursement under current account takes a part of more than 80% (included) of its foreign exchange earnings under current account, its reservation percentage of foreign exchange under current account shall be readjusted from 50% of its last-year foreign exchange earnings under current account to 50%.

III.

The initial limitation amount for the newly-established current account of the domestic institution that has no foreign exchange earnings under current account in last year shall be readjusted from the previous no more than $100 thousand USD equivalent to no more than $200 thousand USD equivalent.

IV.

With regard to the foreign exchange current account for temporarily receiving donations, aid, international postal remittances and internationally-contracted projects etc., the limitation amount may be he limitation amount may be fixed at 100% of the foreign exchange earnings, and the concrete measures for this shall be subject to Circular of the State Administration of Foreign Exchange on Relevant Issues concerning Further Readjusting the Policies for the Administration of Foreign Exchange Current Accounts (Hui Fa [2002] No.87), and Circular of the State Administration of Foreign Exchange on Relevant Issues concerning Readjusting the Policies for the Administration of Foreign Exchange Current Accounts under such Items as Internationally-Contracted Projects etc. (Hui Fa [2003] No.90).

V.

The limitation amount of foreign exchange current account for such import/export enterprise and productive enterprise as have actual business need, with the authorization of the branches of the State Administration of Foreign Exchange, may be fixed at 100% of its foreign exchange earnings, and the concrete measures for this shall be subject to Circular of the State Administration of Foreign Exchange on Readjusting the Administration Measures for the Limitation Amount of Foreign Exchange Current Accounts (Hui Fa [2005] No.7).

VI.

All the branches of the State Administration of Foreign Exchange shall earnestly organize and do well the work of readjusting the limitation amount of foreign exchange current account, and strengthen the statistical analysis, supervision and administration of the foreign exchange accounts.

VII.

This Circular shall enter into force as of the date of promulgation. And this Circular shall prevail in case that any conflict occurs between it and the previous provisions.