The authorities in China are thinking about setting up a
non-bank money exchange outlet in Shanghai as the country pushes
for free conversion of the renminbi into foreign currencies, said a
government source yesterday.
Once approved the company would be the first in the country to
provide foreign currency exchange services. These are currently
confined to Chinese commercial lenders.
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According to a report by the China Securities Journal last
weekend the first money exchange company is set to open in early
February in the city's Pudong New Area.
"The stakeholder of the soon-to-be-established conversion
company is a prestigious state-owned enterprise in Shanghai with
registered capital of 10 million yuan," said the newspaper. They
quoted an unidentified "authoritative source".
"The money exchange company would keep a large amount of foreign
currencies on hand and customers won't have difficulties if they
need larger sums of foreign currencies as they do now in commercial
banks," the source was quoted as saying.
A Pudong government official told China Daily yesterday
that the nation's authorities had been preparing to set up the
company for months. "It's regarded as an important innovation in
the financial sector," he said.
Initially authorities wanted to build the company as a joint
venture, the source said. He observed that the decision wasn't yet
concrete. "The central bank has yet to approve the company set-up,"
he said.
The domestic-listed Lujiazui Finance and Trade Zone Development
Co Ltd are rumored to hold a majority stake in the firm. Its board
secretary Bi Hailin, however, said yesterday she wasn't aware of
the issue.
The report said the company would offer two-way exchange
services while the renminbi is exchangeable with the US dollar,
Japanese yen, euro, Australian dollar, Hong Kong dollar, Macao
pataca, Canadian dollar and Swiss franc.
Foreigners would also be able to change money at the outlet
avoiding the long queues and language barriers of domestic
banks.
Money exchange facilities are currently available at major
airports, hotels and department stores for those holding foreign
exchange bills.
In addition to providing easier access to money exchange the
company would also help eliminate gangs illegally profiting from
the sale of foreign currencies, the report quoted the source as
saying.
The company has also hired veterans familiar with foreign exchange
transactions from financial institutions such as Bank of China.
In mid-January the People's Bank of China, the country's central
bank, announced that the country's foreign exchange reserves had
reached US$1.0663 trillion by the end of 2006. This is a surge of
30.22 percent on the previous year.
The State Administration of Foreign Exchange ruled that from
February individuals could purchase as much as US$50,000 in foreign
currency per year. Currently the figure is US$20,000.
(China Daily February 1, 2007)