Trade Payment Rules Eased (Update1)

Companies in China previously allowed to collect %10 of prepayments on exports in foreign currency. Starting from today, now State Administration of Foreign Exchange increased prepayments to %25 on exports in foreign currency.Here is the news from Bloomberg by Li Yanping:

Dec. 23 (Bloomberg) — China will loosen regulations on the prepayments companies can receive when exporting goods to help their cashflow as the global financial crisis hits overseas sales, the State Administration of Foreign Exchange said today.

Companies will be allowed to collect 25 percent of prepayments on exports in foreign currency, up from 10 percent, starting from today, the regulator said on its Web site. The rules are being changed to “tackle the negative impact of the global financial crisis and to promote stable and relatively fast economic growth,” the statement said.

Expansion in the world’s fourth-largest economy is slowing as recessions in the U.S. and Europe stem demand for goods from the Asian nation. China’s exports fell for the first time in seven years in November and imports plunged. Two thirds of the country’s smaller toymakers closed in the first nine months on faltering demand, according to customs bureau data.

Importers will be allowed to make delayed foreign-exchange payments on shipments amounting to 25 percent of the value of the goods, up from 10 percent, today’s statement said.

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