CHINA’S new regulations on cash transactions and overseas transfers are not capital controls, according to a central bank researcher cited by Xinhua.

    New requirements published by the People’s Bank of China on Friday stoked concern that the government is imposing capital controls in a disguised form, Xinhua reported late Sunday.

    “It is not capital control at all,” Ma Jun, chief economist of the central bank’s research bureau, told the news service. The US$50,000 annual foreign exchange purchase quota for individuals is unchanged, and the rules won’t affect normal activities such as business investment and operations abroad or overseas travel and study, Ma said.

    Ma’s comments follow the annual Jan. 1 reset of the US$50,000 limit for individuals, which may potentially aggravate capital outflow pressures that have been intensifying after the yuan suffered its steepest annual slump in more than two decades.

    The State Administration of Foreign Exchange (SAFE), China’s foreign exchange regulator, said late Saturday that starting Sunday, it will step up scrutiny on individual foreign currency purchases and strengthen punishment for illegal money outflows, but the US$50,000 annual individual quota will remain unchanged.

    The announcement by the SAFE comes amid worries that the yuan, which fell nearly 7 percent against the dollar in 2016, could face renewed pressure in the new year as foreign currency buyers start afresh with a new US$50,000 annual quota.

    Starting Sunday, individuals who want to buy foreign currencies at banks must first fill out an application form specifying the purpose of the purchase, among other information. The SAFE will examine such information and data more closely and frequently, according to a statement on the SAFE’s website.

    The central bank said Friday it will tighten rules for banks to report cross-border customer transactions starting July 1 as part of stepped-up efforts to curb money laundering and prevent terrorism financing.

    Financial institutions will assume responsibility for reporting and there will be neither extra documentation nor official approval procedures for businesses and individuals, Ma said. (SD-Agencies)