China relaxes FX rules for overseas investments
China's State Administration of Foreign Exchange announced a 52% increase in the amount of foreign currency that Chinese companies could buy for their investments abroad. The greater access to foreign exchange means that a total of $5 billion will be available for Chinese companies' overseas investments in 2005. Beijing continues to encourage domestic companies to invest abroad in an effort to improve their competitiveness in international markets, as well to reduce the abundant foreign currency reserves of the country ($659.1 billion at the end of March). Last year, China's direct investment abroad rose 27% to $3.62 billion. 53% of the $3.62 billion was directed towards the mining industry. At the same time, contracts for overseas investments in the future increased 78% to $3.71 billion last year.