CENTRAL BANK OF CHINA FREES UP SOME FIRMS FROM OVERSEAS BORROWING
China's central bank said on Friday that 27 financial institutions, as well as firms registered in free trade zones in Shanghai, Tianjin, Guangzhou and Fujian, would no longer need approval to issue foreign debt.
The central bank will apply its macro-prudential management rules to the selected firms from Jan. 25, letting them conduct cross-border financing activity up to a limit linked to their assets or net assets, it said in a statement on its website.
The central bank said it had accumulated "replicable experiences" from a pilot scheme on cross-border financing in Shanghai's free trade zone that was launched in early 2005.
The move will help "improve foreign capital utilization efficiency," and help lower funding costs for firms, the central bank said.
The selected banks and firms can use funds raised overseas to replenish their capital base and support the economy, it said.
The financial institutions include the country's policy banks, including:
China Development Bank, and major state lenders including Industrial and Commercial Bank of China Ltd (ICBC), mid-sized banks as well as HSBC, Citibank and Standard Chartered.
The pilot programme will be expanded nationwide at an appropriate time, the central bank added.
(Additional reporting by Reuters China Monitoring Desk)