Restrictions on foreign exchange for the purchase of property overseas is not a new rule, and overseas real estate investment remains closed to domestic buyers, an official from the State Administration of Foreign Exchange (SAFE) told people.cn on Tuesday morning.
The comment was made after SAFE stressed in a post published on its website on Saturday that the authority is improving the application process for foreign exchange purchasing, though its $50,000 annual quota for individuals remains unchanged.
The previous application form for individuals did not specify that domestic buyers could not purchase foreign exchange to invest in real estate investment, an employee from a domestic bank who is in charge of the individual cross-border transaction business, told the Global Times on Tuesday. She preferred not to be named because she is not allowed to speak to the media.
"However, there were several foreign exchange purchase options on the form, such tourism and studying aboard, but there was no option for investing in real estate or buying insurance," she said.
The lack of detailed rules created loopholes for individual cross-border transactions, which also aroused concerns about the authority's stricter rules on capital outflows.
SAFE's post was published after the People's Bank of China (PBC), the country's central bank, issued new regulations on Friday to crack down on large, suspicious transactions. The new regulations were, however, labeled as new capital controls in some media reports, according to the Xinhua News Agency.
"They're not capital controls at all. The new regulations for banks to report cross-border transactions were created to curb money laundering and prevent terrorism financing," Ma Jun, chief economist of the PBC's research bureau, was quoted as saying in Xinhua's report on Saturday.
When Global Times accessed the online form from Industrial and Commercial Bank of China on Monday, foreign currency buyers were asked for detailed information for why they wanted to buy foreign currency.
The form listed six prohibited activities, such as providing false information, lending or borrowing their foreign currency quotas and engaging in money laundering, tax evasion or other illegal activities.
The only difference in the new regulations is an adjustment in the reporting standard from 200,000 yuan ($28,779) to 50,000 yuan, which is also in line with the principle of fighting money laundering highlighted during the G20 meeting in Hangzhou in 2016, according to the post published on the central government's website on Sunday.
