By Helen H. Chan
HONG KONG, Jan. 21 (Westlaw Business) – Excessive liquidity is becoming a hot potato for the State Administration of Foreign Exchange (SAFE), China’s forex regulator. Recently, SAFE announced that it would continue to crack down on “hot money” inflows through vigilant monitoring of cross-border transactions. In particular, China’s currency watchdog will examine whether foreign exchange destined for the PRC are being used in compliance with Chinese laws.
In its ongoing battle against inflation, the Chinese government has been scrutinizing compliance with existing forex regulations, many of which apply to the daily operations of overseas listed Chinese companies. In response to the clampdown, Sino-U.S. companies have highlighted a number of foreign exchange transfer risks in recent disclosure filings. (more…)