Registered capital rules relaxed for some foreign firms

Some foreign companies in China can now use their registered capital to buy stakes in Chinese companies as part of an experiment to further loosen capital controls, the State Administration of Foreign Exchange said on Monday.

The agency said the pilot test would also reduce red tape for companies that want to convert their registered capital into yuan to attract more foreign investment.

Under the new rules, companies are free to convert all of their registered capital into yuan if they wish, though they are prohibited from using the funds to buy listed Chinese securities.