China's forex watchdog has announced plans to monitor and check
short-term, abnormal fund inflows in the latest effort to trim the
country's huge international payments surplus.
China's current account surplus surged more than 36 percent to
US$91.58 billion in the first half of 2006 compared with the same
period of the previous year, according to the State Administration
of Foreign Exchange (SAFE).
Deng Xianhong, deputy director of the administration, said the
campaign would cover foreign currency exchanges, companies, foreign
agencies and individuals in China's 10 wealthiest regions, but he
would not specify the regions.
The administration also ordered all banks in cities, including
Beijing, Tianjin, Shanghai, and Shenzhen, that handle foreign
exchange services to monitor their own operations, Deng said.
He said the watchdog had investigated 1,914 cases and issued
fines totaling 139 million yuan (US$17.98 million) in last year's
forex campaign. It also uncovered 70 "underground" banks, or
illegal private businesses offering remittance, foreign exchange
and other banking services, and illegal foreign exchange
centers.
In 2006, the administration inspected 2,027 branches of 29
domestic and foreign banks, of which 265 were fined 16 million yuan
(US$2.07 million) for irregularities in foreign exchange
services.
Analysts said the effort would help to prevent economic
fluctuations caused by heavy inflows and outflows of short-term
capital and slow the rise of China's US$1 trillion in foreign
exchange reserves.
(Xinhua News Agency April 1, 2007)