How has the process for conversion of capital funds held in foreign currency by foreign invested enterprises (FIEs) been simplified?

It has been simplified by the SAFE Circular on Reforming the Regulation of the Settlement of Foreign Invested Capital Funds, which came into effect on July 1, 2002. Circular 59 represents a policy shift in foreign exchange control from direct control by SAFE of FIEs to indirect control through authorized foreign exchange banks. Under Circular 59, SAFE approval is no longer required if the FIE converts funds in a capital funds account opened with an authorized bank.