Forex reserves slip to lowest in 7 months

CHINA’S foreign exchange reserves fell slightly in May to its lowest in seven months as the U.S. dollar rebounded strongly and regulators continued their efforts to increase cross-border use of the yuan.

Reserves fell US$14.23 billion in May to US$3.111 trillion, the lowest level since October, compared with a drop of US$17.97 billion in April, central bank data showed Thursday. The State Administration of Foreign Exchange (SAFE) said the size of China’s foreign exchange reserves should remain stable overall. A decline in other currencies versus the U.S. dollar was the main reason for the small decline in the dollar value of the reserves in May, the SAFE said in a statement.

SOEs face obstacles in overseas expansion

CHINA’S State firms are facing growing obstacles in expanding their overseas businesses due to foreign concerns about their links to the Chinese Government, the Global Times reported Thursday.

The paper said politically charged accusations by foreign countries were a reminder that China needed to accelerate the pace of reform among its State-owned enterprises (SOEs). The paper cited researchers as saying that reforms have been too slow and government authorities have continued to play a major role in overseas investment decisions, adding that the government should be responsible for managing capital rather than individual companies.

China, Argentina in forex swap extension talks

ARGENTINA is in talks with China about extending a currency swap program due to recent financial turmoil, the country’s cabinet chief said Wednesday.

“There are talks ... to see if there’s a possibility of extending the swaps in the current situation,” Cabinet Chief Marcos Pena said. He said Argentina’s relationship with China has been “very fruitful.” China’s central bank last year extended a bilateral swap agreement for 70 billion yuan (US$10.37 billion) for another three years.

Customs bust steel scrap smuggling ring

CHINA’S customs authority has arrested 245 suspects involved in smuggling scrap and waste steel valued at 4.8 billion yuan (US$750 million) out of the country, it said Wednesday.

Following a ban on imported trash, the General Administration of Customs has identified the crackdown on waste smuggling as one of its major priorities this year, but its efforts have focused on illegal imports of low-quality scrap plastic, paper and electronics.