Is the Chinese government subject to any foreign exchange control restrictions regarding the remittance of funds, profits, and dividends?

Drawing from over a decade of experience in handling such issues, Xu Baotong's legal team shares the following.

China still maintains strict foreign exchange control measures, and the renminbi cannot be freely converted. However, profits and dividends of foreign-invested enterprises that comply with relevant foreign exchange management regulations can be converted into foreign currency and remitted overseas, apart from paying corporate income tax and withdrawing statutory surplus reserves.

Generally, transactions related to current accounts of foreign-invested enterprises are relatively freely convertible, while those related to capital accounts are still subject to strict control.

Current accounts refer to transactions between a country and foreign entities that occur regularly, including trade in goods and services, non-trade transactions, and transfers of funds without compensation. Capital accounts refer to changes in assets and liabilities resulting from capital flows into or out of a country, including direct investment, portfolio investment, and cross-border borrowing.