China was cautious of money outflow, new regulations to avoid sharp yuan depreciation

Recently Nihon Keizai Shimbun Electronic Edition reported the following:

中国、資金流出を警戒　急激な元安回避へ新規制

中国・台湾

2019/8/29 23:00日本経済新聞　電子版

【上海=張勇祥】中国政府が海外への資金流出を抑制する新規制を導入した。資金流出が加速した場合、海外送金や外貨売却が多い銀行の評価を引き下げる新ルールを適用する。不動産会社には借り換え目的以外の外債発行を禁じた。米中貿易戦争が長期化するなか、人民元相場で11年ぶりとなる1ドル=7元を突破し、当局は当面この水準を容認しているが、元安に歯止めがかからない状況は回避したい考えだ。

■海外送金多い銀行の評価下げ

中国政府は元安を容認して輸出企業への影響を緩和する方針だが、2015年の人民元切り下げを機に起きた「人民元ショック」のような急激な元売り圧力に襲われることを警戒する。

このため導入したのが元売りが膨らまないよう銀行の海外送金などを制限する新しい規則だ。金融システムの安定が損なわれかねないと判断した場合、国家外貨管理局は「非平常時」と認定する。各行の元の海外送金、外貨売却の状況を全国平均と比べ、差が大きいほど評価を下げる。低評価の銀行は業務に制限をかけられる可能性がある。

現在も当局は海外送金を制限するため、個人顧客に詳しい資料を提出させるよう銀行を厳格指導している。留学費用なら入学許可書、仕送りでは相手先の在職証明などを求める。「不動産や保険商品の購入目的での海外送金は認めていない」（準大手銀行の支店）

元の海外送金と顧客への外貨売却は、元安や資金流出が止まらなかった16～17年にも外貨管理局が規制した。このときは外国人が円換算で数十万円規模の送金をするのも難しくなった。手段を選ばない規制に海外から批判を浴びたが、今回は直接的な資本規制は回避して批判をかわす狙いだ。

だが外貨管理局は平常時と非平常時の判断基準を示しておらず、当局のさじ加減で海外送金に支障が出る恐れがある。

■不動産会社の外貨調達制限

不動産会社にはより厳しい規制を課した。国家発展改革委員会は外債発行による調達資金の使途を「1年以内に満期を迎える海外債務に限る」と通知し、借り換え以外の調達は認めない方針だ。

中国の不動産会社は元が高値で推移した13～15年にドル建て債務を膨らませた。19年7月時点の残高は1700億ドル（18兆円）との調査もある。元安が進めば債務返済の負担はさらに重くなる。

ドルを調達すれば一時的に元高要因になる可能性はある。だが信用の低下した不動産会社は10%前後の高利で借りている例もある。これ以上の債務拡大は金融市場の不安定要因になりかねない。

中国政府は米国との摩擦の長期化を懸念する。トランプ米大統領は8月1日、制裁関税の対象を中国からの輸入品ほぼすべてに広げる「第4弾」の発動を表明した。5日には元の対ドル相場が08年以来となる1ドル=7元台を付けた。29日には一時1ドル=7.17元まで下落し、月間の下落率は約4%と「管理変動相場制」を導入した05年以降で最大になる見通しだ。

Translation

Shanghai Zhang Yuxiang  -- The Chinese government had introduced new regulations to curb the outflow of funds to foreign countries.  If the outflow of fund accelerated, new rules would be applied to lower the rating of those banks that had many overseas remittance and foreign currency selling. Real estate companies were prohibited from issuing foreign bonds other than for refinancing purposes. Amid a prolonged U.S.-China trade war, the yuan had surpassed the one US dollar to seven yuan level which was not seen in 11 years, and the authorities tolerated this level for the time being, but they wanted to avoid a situation in which the yuan's depreciation could not be stopped.

■  Lowering the evaluation rating of banks with a lot of overseas remittance

The Chinese government was prepared to ease its influence on exporting companies by allowing a yuan depreciation but was wary of being hit by sharp yuan pressures such as the "Yuan shock" triggered by the yuan's devaluation in 2015.

For this reason, new rules were introduced to restrict banks' overseas remittance so that the yuan selling would not expand. If it was determined that the stability of the financial system could be damaged, the National Foreign Exchange Administration could determine the situaion as "abnormal time". Focus on individual bank’s overseas yuan remittance and the statue of foreign currency selling, when compared to the national average, the greater the difference the lower the evaluation rating. There was a possibility that the lowly rated banks might be restricted in their operations.

The authorities for the purpose of restricting overseas remittances, instructed banks to strictly provide detailed information of individual customers. If the remittance was for a study abroad fee an admission letter was required, and also for proof of employment etc. of the party in remittance. "Overseas remittances for the purpose of purchasing real estate and insurance products were not permitted" (branch of a semi-major bank).

The foreign currency management bureau had tried to regulate the yuan overseas remittance and the selling of foreign currency to customers in the year 2016-17 when both yuan deprecation and the outflow of funds could not be stopped. This time, it became difficult for the foreigner to send the remittance of several hundred thousand yen in yen conversion. It had attracted criticism from overseas in that the regulations were not the way to go. This time the aim was to fend off criticism by avoiding direct capital control.

However, the foreign currency management bureau did not show the criteria to judge what was normal time and non-normal time, and there was a possibility that the overseas remittance might be hindered by the level of adjustments of the authorities.

■Restricting real estate companies in buying foreign currency 

 Stricter regulations were imposed on real estate companies. The National Development and Reform Commission notified that the use of funds raised by issuing foreign bonds would be limited to “overseas debt which will expire within a year”, and would not allow procurement other than for refinancing.

Chinese real estate companies inflated their US dollar-denominated debt in the year 2013-15 when the yuan shifted to a high price. According an investigation as of July 2019, the balance was 170 billion US dollars (18 trillion yen). If the yuan was weakened, the burden of debt repayment would become even heavier.

If US dollar rose, it could temporarily become a source of high yuan. However, there were examples that the real estate company which had low credit rating to borrow at a high interest rate of around 10%.  Further debt expansion could be a factor in financial market instability.

Beijing was concerned about a prolonged friction with the United States. U.S. President Trump announced on Monday that he would launch the "fourth round" to extend the sanctions to almost all Chinese imports. On the 5th, the yuan's exchange rate against the US dollar was at the lowest since 2008. On the 29^th at one time it fell to 7.17 yuan for one dollar, the largest monthly decline rate of about 4%, and the biggest drop since the introduction of the " Controlled floating exchange-rate system" in 2005.

     So, from now on the remittance of  yuan to overseas will be more restrictive under these new regulations. One effect of such new regulations is that we could from now on see fewer property buying activities by the Chinese in Australia, the UK, Canada and the US.