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| SAFE Launches Campaign on Short-term Fund Inflows |
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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) |
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