China says no return to old capital controls

BEIJING - China will not return to its old path of capital controls or go backwards on its foreign exchange management policies, according to a leading foreign exchange official.

Pan Gongsheng, head of State Administration of Foreign Exchange, was quoted in China Business News on Monday, saying that China's forex management policies will balance efforts between guarding against risks of cross-border capital flows and facilitating trade and investment.

Pan said China would enhance the scrutiny of forex transactions' authenticity and regularity, intensify the crackdown on irregularities, and ensure the healthy development of forex markets.

Warning that there was blindness in outbound investment, Pan said that China would encourage domestic firms, especially those with the right abilities and conditions, to invest overseas in areas such as the Belt and Road Initiative and in international industrial cooperation.

Pan said that the country would continue to open up its financial markets based on "a strategic perspective" so as to balance short-term and long-term benefits.

He also said the country had ample forex reserves, and it was normal for the forex reserve levels to fluctuate in light of complicated economic and financial environments.

China's forex reserves fell to about $2.99 trillion in January, a six-year low but still the world's largest.