TNAG-2792-FCO40-4031-Relations-between-Hong-Kong-and-China-1993 — Page 119

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exchange earnings

from exports of general commodities are

shared among the export enterprise, the local government and the central government in the proportions of 4:1:5.

38.

The scope of reform has been widened to cover

also foreign exchange transactions by individuals. As from December 1991, Chinese residents are allowed to buy and

sell US dollars and Hong Kong dollars in the swap centres,

although their transactions are subject to volume ceilings

and limited to uses laid down by SAEC.

39.

Starting from 1 March 1993, travellers are allowed to carry Renminbi in and out of China in amounts up to Rmb 6,000 each time. This is intended to afford greater convenience especially to frequent travellers to China. It in turn has led to a flourishing Renminbi exchange business

(10). in Hong Kong

40.

In mid-April 1993,

management rules

for the swap

stipulating that all transactions

centres have to be approved by

transactions to

different localities.

be

SAEC promulgated

centres.

conducted

the

Apart from

in the swap

SAEC, the rules allow

carried out between swap centres in But they prohibit any transactions

outside the swap centres. Moreover, change in use of the

foreign exchange purchased

from the centres is forbidden.

In early July 1993, PBOC issued an order stating that foreign exchange quotas held by enterprises should be redeemed within a period of three to six months, and quotas

(10)

Po Sang Bank, which is a member of the Bank of China Group, takes the lead in providing the service of cash exchange between Hong Kong dollars and Renminbi. It provides quotation on a daily basis and is responsible for the recycling arrangements.

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