SAFE eases overseas funding rules

China’s foreign-exchange regulator said it would ease restrictions on companies loaning funds to their overseas affiliates, the South China Morning Post reported. The change in policy is projected to open close to US$30 billion in new financing, the State Administration of Foreign Exchange (SAFE) said. Chinese firms would be permitted to loan up to 30% of their own equity to any overseas subsidiaries, branches and companies in which they have owned stakes since August 1. The move is intended to loosen up much-needed capital to domestic companies’ overseas operations, which have had difficulty finding financing as a result of the credit crunch. It is also expected to push firms to expand into other profitable overseas sectors to cushion against slumping exports.