Laws of the People's Republic of China

The Administration Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation

Reply of the Department of Foreign Investment Administration of the Ministry of Foreign Trade and Economic Cooperation to Questions on Foreign Investors' Reinvestment in China in RMB Obtained from Liquidation, Share Transfer and Previous Investment

April 4, 2000

The Department of Capital Account Administration of the State Foreign Exchange Administration:

Your letter concerning foreign investors' reinvestment in China in RMB obtained from liquidation, share transfer and previous investment has been received. After consulting the Department of Law and Treaty of MOFTEC, our reply is given as follows:

Document WaiJingMaoZiZongHanZi (1998) No. 492, i.e. Circular on Issues concerning Foreign Investment in RMB remains effective. At present, in principle, foreign investors are not allowed to invest in RMB which is not their profit made. However, same policy treatment as investment in foreign currencies shall be granted to the reinvestment in RMB which the foreign investors obtained from legally distributed share in the liquidation of the enterprises with foreign investment, share transfer or profit of previous investment.

The above opinions are provided for reference.