China will abandon quotas on how much foreign currency its companies can obtain in order to invest abroad, a news report said on April 20.
Such a step, which comes as Beijing's trading partners urge it to ease strict currency controls, could result in a dramatic increase in the amount of money that Chinese companies are investing overseas.
The report from the official Xinhua News Agency didn't say when the step would take effect. "In the future, if any firms win approval to invest overseas, they could freely buy foreign currencies needed for the investment from banks," Xinhua quoted Guan Tao, an official at the State Administration of Foreign Exchange, as saying.
The government announced last week that it will sharply raise the amount of money that companies and individuals are allowed to move abroad for investment as of May 1.
China has the world's biggest foreign currency reserves - US $875.1 billion as of the end of March - as a result of surging exports and foreign investment and controls that limit the amount of money that can be taken abroad.
China also is under pressure to relax controls on the exchange rate of its currency, the yuan, which the United States and other trading partners say is too low and gives Chinese exporters an unfair price advantage.
"We now want to strengthen the support for overseas investment by Chinese companies," Guan was quoted as saying. "We want to expand channels for foreign currencies to flow out of the country, which is why we are poised to abolish the corporate overseas investment quotas."
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