Posted by WARREN MOSLER on December 24th, 2008
|China eases rules on forex advances|
Domestics somehow caught short USD like the rest of the world?
|More measures to spur consumption and foreign trade(Xinhua)|
Help for both domestic consumption but exports as well- still pushing exports.
|China to Raise Export Rebates, Use Yuan to Settle Some Trade|
|China Must Prevent Drastic Decline in Property Prices|
China eases rules on forex advances
Exporters will be able to increase their advances on foreign-currency payments to 25 percent from the current 10 percent, the China Securities Journal reported on Wednesday.
The decision came in a circular issued by the State Administration of Foreign Exchange (SAFE) on Tuesday night.
Importers’ quota for deferred foreign-currency payments also rose to 25 percent from 10 percent.
Analysts said the move would help small and medium-sized enterprises raise funds and improve their cash flow.
A banker who asked to remain unidentified told Xinhua the financial crisis has caused difficulties for many enterprises and this move would give them more operating capital.
The State Council, or China’s cabinet, urged a higher quota of foreign exchange advances to support trade during a standing committee conference on Dec 3.
SAFE official Cai Qiusheng was quoted by Tuesday’s Shanghai Securities News as saying that foreign exchange reserves were below their peak at $1.9 trillion as of the end of September.
According to the paper, enterprises that have good credit and haven’t violated any foreign-exchange regulations can qualify for the new limits.
To prevent “hot money” inflows through trade, SAFE, the Ministry of Commerce and the General Administration of Customs issued a joint circular on July 14 to step up supervision of cross-border capital flows.
The foreign exchange agency told administrative departments at all levels to step up inspection to prevent large-scale cash outflows.
More measures to spur consumption and foreign trade(Xinhua)
Updated: 2008-12-24 20:02BEIJING — More measures will be taken to stimulate consumption and support foreign trade, according to Wednesday’s executive meeting of China’s State Council, or the cabinet.
A document released after the meeting, chaired by Premier Wen Jiabao, said to stimulate domestic consumption, efforts should be made to improve the rural circulation network, increase varieties of commodities available in rural markets, improve urban community service-facilities, promote upgrade of durable goods, support development of circulation companies, stimulate consumption in holidays and through exhibitions, and step up supervision over product quality and safety.
In the fiscal year of 2009, the central government would increase its financial support for development of the rural circulation network and the service industry.
To sustain a stable growth in the country’s foreign trade, the central government would raise export tax rebates of high-tech and high-value-added products, adjust the forbidden and limited commodity catalogue of processing trade, encourage a transfer of processing trade from the eastern to the central and western region.
The government would also urge banks to improve services for foreign traders, increase imports of products needed, direct foreign funds to high-tech, energy-saving and modern service industries, simplify customs procedures and keep a close eye on the quality and safety of both imported and exported products.
China to Raise Export Rebates, Use Yuan to Settle Some Trade
Dec. 24 (Bloomberg) –China will raise export rebates on some machinery and electronics and let some trade with Hong Kong, Macau and Southeast Asia be settled in yuan to help boost faltering overseas sales, the Cabinet said.
China will also expand the use of government money to develop foreign trade, the State Council announced today.
The pilot program for settling trade in yuan will take place in Guangdong province, eastern China’s Yangtze River Delta region, and Guangxi and Yunnan provinces, the statement said.
China Must Prevent Drastic Decline in Property Prices
Dec. 24 (Bloomberg) — China must prevent a drastic decline in property prices, the State Council said in a report to the nation’s parliament today, state-run China National Radio said on its Web site.
The government will increase construction of housing for low-income families and control excessive gains in land prices, the report said.