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A senior government official said Monday that capital flight has
assumed a downward trend over the past few years.
Guo Shuqing, director general of the State Administration for
Foreign Exchange and member of the 10th National Committee of the
Chinese People's Political Consultative Conference (CPPCC), said
that capital flight is a kind of underground economic activity
aiming to seek hedging or evade regulation. Although it is hard to
know the exact amount of capital flight, there is evidence to
believe that it is going downward.
He
said that departments concerned have tightened the implementation
of forex policies to keep the front door wide open while blocking
the side doors. While strictly cracking down on illegal trading,
forex control evasion and dodging, smuggling and other illegal
activities , the country has adopted such measures as lowering
tariffs, removing non-tariff measures, simplifying examination and
approval procedures for investing abroad, removing restrictions on
buying foreign exchange, lifting the compulsory foreign exchange
surrender and settlement and providing conveniences for individuals
to buy foreign exchange, thus weakening the motives for enterprises
and individuals to evade regulation. As a result, The amount of
foreign exchange settled by individuals rose 2.5 times while
individual purchase of foreign exchange dropped by about half in
2002.
Other factors contributing to the reduction in capital flight
include the fluctuation of international financial market and the
exchange rates of major currencies, the good situation of China's
international payments, stability of the Renminbi exchange rates
and the sagging black market for forex trading.
He
said that the government will continue to deal with illegal forex
trading and keep the market in good order.
He
disclosed that the country uncovered 12,000 forex law violating
cases, involving US$9.02 billion, and stormed 78 underground money
houses and captured 519 suspects and arrested 27.
(Xinhua News Agency March 10, 2003)
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