Simplified Rules and Credit Support for Firms Investing Overseas
China has now simplified currency rules and finally step up their credit support for firms that are investing overseas. This is part of the government move to encourage the use of excess factory capacity at home that will help local firms grow globally. The government has also allow these firms investing abroad to do financial exchange at banks directly without the need to register with the authorities.
These will also help assist firms to go out and expand abroad as they deal with more bank support for major equipment makers as the government is looking for more diversified use of the foreign exchange reserves. Increased outbound investment will be helping China export surplus capacity especially equipment product to be more internationally competitive. Furthermore the government is simplifying their approval procedure for banks and set up branches overseas and allows firms to list shares abroad and follow merger and acquisitions.
With the geographical limit on the issuance of yuan denominated bonds coming from domestic firms and banks in overseas markets is abolished. Then in September, the Ministry of Commerce has simplified rules that will makes it easier for domestic companies in investing overseas. China outbound investment by non financial firms has US$ 89 billion for the first 11 months in 2014 which is up 11.9 percent compared from a year earlier and China got US$ 106 billion in foreign direct investment in 2014.