EU companies in China hit by new exchange rules

Several European companies in China have been unable to remit dividends abroad following the introduction of new exchange controls, the first indication that Chinese attempts to curb capital outflows are causing problems for foreign businesses, the Financial Times reports. The EU Chamber of Commerce in Beijing said the payment difficulties experienced by European companies were “disruptive to business operations.” The measures, which included complex approval procedures for sending money out of the country, were introduced on November 28. They appear designed to shore up China’s foreign exchange reserves following a period of unprecedented outflows of capital. One company based in Shanghai had a dividend payment of several hundred million renminbi “stuck,” while another in southern Chinese told last week that a Rmb900m ($131m) payment needed more time for approval.