China's central bank announces restrictions for yuan FDI

China’s central bank unveiled restrictions on the use of offshore yuan that flows back into the country in the form of foreign direct investment (FDI), Reuters reported, citing Shanghai Securities News. Under the new restrictions, which were outlined in a document issued by the People’s Bank of China, foreign investors are prohibited from investing in property or land development using yuan in accounts opened before the flow of FDI has been initiated. Yuan in accounts opened after the start of FDI may not be used to invest in securities, derivatives or asset management products and may only buy property for use by the investors themselves. This latest policy comes after a scheme launched last October first allowed foreign investment in China with yuan that investors had acquired offshore. Such steps are part of China’s efforts to promote the further internationalization of its currency.