China opens routes for investment

New rules announced by China's foreign exchange regulator are set to make it easier for domestic citizens to raise overseas capital. The regulations, which will go into effect next month, allow Chinese citizens to use domestic assets to set up overseas special purpose vehicles (SPVs) as means to raise funds which may then be reinvested in China. The new regulation aims to "encourage, support and guide the development of the non-State sector, further improve the policy support system for venture capital, and regulate cross-border capital transactions by domestic citizens through SPV-based fundraising and investment activities", according to a State Administration of Foreign Exchange statement.