Business
16:01, 09-Aug-2017
New rules over credit card use abroad unsettles Chinese holiday makers
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China’s new regulation demanding more detailed information on overseas bank card transactions has put domestic holiday goers on edge. The new rules impose stricter control of spending abroad, bringing to the fore the difficulty Chinese policymakers have in monitoring and controlling cross-border capital movement.
From September 1, banks operating on the Chinese mainland are required to hand over data regarding all transactions made overseas on a domestically issued card that are worth more than 1,000 yuan (148 US dollars), according to China’s State Administration of Foreign Exchange (SAFE).
The measure is aimed at tackling money laundering and corruption, an unnamed SAFE official told Xinhua News Agency, adding that it will not affect holiday goers buying things abroad with their bank cards.
"It is the banks, rather than the individual, that will report the information about bank card holders' overseas spending to SAFE. Therefore, the move will not increase card holders' costs, and it has nothing to do with customs declaration," said the official.
The policy prompted immediate concerns among consumers that the measure may point to stricter capital controls at home.
Sensing the unease, the quoted SAFE official added that there will not be any adjustment of forex management policies related to the use of bank cards overseas.
Individuals in China are allowed to change the equivalent of up to 50,000 US dollars from yuan to foreign currencies every year under the current quota system. Overseas spending on bank cards is not included in the quota provided the debt is repaid from a yuan-denominated domestic bank account.
China has strengthened oversight on financial risks including large-scale capital outflows.
China's regulator said last month that the country was seeing its most balanced forex market supply and demand in three years due to improving economies at home and abroad, as well as an intensified crackdown on irregularities.
The country's foreign exchange reserves rose for a sixth consecutive month in July to hit US$3.081 trillion as pressure from capital outflows eased and the value of the US dollar weakened, data from the central bank showed Monday.
Bank cards have become the main tool for overseas payment for Chinese, with overseas transactions by domestic individual card holders exceeding $120 billion in 2016, SAFE data showed.