China to relax forex control over services trade

China will expedite foreign exchange transactions in the services trade by streamlining administrative procedures, the Chinese State Administration of Foreign Exchange (SAFE) announced. Under the new rules, which will be effective from Sept. 1, a forex payment or settlement transaction in the services trade that is equivalent to 50,000 US dollars or less can proceed without having to verify its transaction documents, the SAFE said in an online statement. SAFE data showed that the simplified procedure is expected to benefit about 88% of China’s services-trade-related forex transactions, according to China’s (Xinhua) News Agency. Other measures unveiled include those to allow services trade forex transactions to be handled directly at financial institutions and to permit companies in the services trade to deposit their foreign currency earnings overseas. While loosening controls, the SAFE also vowed to ramp up supervision of the services trade forex flowing into and out of the country in order to prevent risks. China has been emphasizing the service sector’s role in lifting growth and creating jobs amid the country’s recent economic slowdown. The service sector accounted for roughly 44.6% of China’s GDP in 2012, and policymakers aim to raise that to 47% by 2015.