In China, the Chinese currency Renminbi (RMB) is freely convertible via current accounts and, under certain management, via capital accounts. "Current accounts" include transactional items that are frequently the subject of economic transactions between a nation and its foreign counterparts, including foreign trade expenses and income, noncommercial transactions, and free remittances. “Capital accounts” include the increases and decreases, respectively, in assets and liabilities as a result of capital exports and imports in the balance of payments, reflecting changes in the claims and debts between a nation and its foreign counterparts as expressed in the context of foreign exchange trading, including the Transfers of tangible and/or financial assets between residents and non-residents. The whole is broken down into three categories: direct investments, investment securities and cross-border loans.
The PRC is in the process of gradually opening its capital accounts. The number of convertible transaction items is gradually increasing - as is the degree of convertibility. So far, the opening affects primarily direct investments, and cross-border investment securities trading channels have also expanded significantly, while macroprudential asset management is practiced for foreign debt. In the area of cross-border investment securities and personal capital accounts, there are few transaction items that have not yet been fully opened up.
The Chinese State Foreign Exchange Bureau (abbreviated as "SAFE" in English) and local foreign exchange trading administrations are responsible for the supervision and control of foreign exchange trading. In accordance with the relevant regulations, the PRC implements the foreign exchange trading filing management for the domestic direct investment of foreign investors (abbreviated as "DDI" in English). Organizations and individuals involved in DDI activities must apply for a foreign exchange trading application prior to engaging in such transactions. Since June 2015, foreign-invested companies have the option of applying for foreign exchange trading registration at a bank at the location of their company registration.
The use of capital and renminbi funds obtained through foreign exchange trading activities of foreign-invested companies is subject to the principles of authenticity and self-use within the business framework and the regulations of foreign exchange trading. Foreign investors are free to make domestic and international transfers of their investments in RMB, or in foreign exchange as far as their equity interests, profits and capital gains are concerned within Chinese territory.