Forex Regulator Meets With Multinationals to Discuss Profit Remittance Speculation

(Yicai Global) April 6 — After reports earlier this year that BMW and other foreign companies encountered problems sending profits back home, the head of China’s foreign exchange regulator, Pan Gongsheng, met with executives of several multinationals, stressing that China is not looking to limit foreign exchange and companies can remit their profits freely.

Affected by several factors, the yuan’s exchange rate fluctuated strongly at the end of last year, and reports suggested that foreign companies were unable to send their profits overseas. The State Administration of Foreign Exchange later said the speculation was not true.

Multinationals at the meeting included Sony, BMW, Daimler, Shell, Pfizer, IBM and VISA, a press release from SAFE said today.

“Pan answered questions relating to problems remitting profits one by one,” a participant told Yicai Global, adding that Pan left his contact details at the meeting for further communication. He reiterated that exporting profits would not be restricted and China is not looking to limit foreign exchange in this way, but did add that enhanced compliance review would be needed.

The regulatory leader said the establishment of a stable and benign forex market conforms to the common interests of regulators and market players, and requires concerted effort from all parties. China’s foreign exchange market is relatively stable, and cross-border capital flows are moving towards an equilibrium, suggesting the country has a sound foundation for future cross-border payments.