Entry, exit rules to be amended

China will soon amend the law on exit and entry control, an official with the Exit and Entry Administration Bureau, said.

Chen Jie, the bureau's general office director, said an amendment to the law, the 10th, had been submitted to the State Council for review.

"The 10th may be the final amendment and is subject to approval by the National People's Congress later this year," Chen said.

He was speaking at a recent conference of the exit and entry (migration) administration, the first nationwide meeting of its kind, which was held at Shantou University.

Chen said the amended law will integrate the Law on Control of the Entry and Exit of Aliens, the Law on Control of the Entry and Exit of Chinese Citizens and the Regulations on Examination and Approval of Permanent Residence of Aliens in China.

"The integrated law will simplify procedures and conditions pertaining to the entry and exit of foreigners and Chinese citizens," Chen said.

Laws on exit and entry control of aliens and Chinese citizens were introduced in 1986, and permanent residence of foreigners in 2004.

"To some degree, they are now outdated to adapt to the new environment that China is facing in the control of entry and exit of foreigners and Chinese citizens," Zhang Baoping, a professor with the Frontier Defence Department of the Chinese People's Armed Police Force Academy, said.

"We are facing a new environment, in which a rising number of foreigners have been moving to the country. They are not only seeking jobs, but also permanent stay here," Liu Guofu, an associate professor at Shantou University, said.

(China Daily October 16, 2008)

They've been trying to ammend this for the past 10 years. I wouldn't hold your breath waiting for this to happen.

Notice that I did make some sentences bold, but I did not add any comment...although I was really tempted to make a comment that the "amendments" would surely be tougher rather than more relaxed
Anyway, in the coming few months, they are going to have many much more pressing issues to find jobs for their billion people than to care for the foreigners sensitivities.
By the way, I read 2 quite good articles about the hot money starting to flow OUT...not too good sign for China, I think

Yeah, I do suppose that if they do make changes it will be of little benefit to most expats.

I really don't understand the whole hot money issue. Can you elaborate?

Jobs are starting to go. A couple of large toy manufacturers have gone bankrupt in DongGuan. 6,500 out of work instantly.

These changes will have little impact on expat who have decent jobs with MNC, I guess.

Havard wrote:These changes will have little impact on expat who have decent jobs with MNC, I guess.

One of the big US automakers is sending several of their families home at Xmas in anticipation of a major domestic downturn. Scary since this is basically the only place they are making money.

underh20 wrote:I really don't understand the whole hot money issue. Can you elaborate?

I am a layman too. But Let's try to explain in simple words and specifically for China (otherwise, hot money is just volatile money moving very quickly in search of the best interest rates or best currencies rates).

For much better references, I advise you to read regularly the column of Michael Pettis here :
http://seekingalpha.com/article/100010- ... ousness-up

and here: http://www.chinastakes.com/

Funny, because yesterday, there were 2 differents articles about hot money in chinastakes.com. The only advantage I found in reading M. Pettis is that being an academic, he has no any vested interest to tout anything. Besides, he gets often interesting "insider" infos through his former students who take positions in banks..etc.

Ok, basically, the definition of hot money for China is money which is entering (and now seems flowing out) the country not as FDI or as trade surplus. of course, this is very simplistic because in reality:
many inflows of hot money can be disguised as FDI; and as you can guess since august why the government is now checking so carefully all import export accounts, hot money can be also hidden in legitimate trade transactions.
For example, anecdotically, for the last 4 years, i have 5 big suppliers (one of them a large batteries maker in Suzhou) who ask me to pay all my purchases on their HK accounts.
Well, this is almost same as when my large north african customers pay me 35% of each shipment from Dubai to decrease the invoices amounts.
The inflow of foreign currencies has to be "sterilized" into RMB, therefore increasing the reserve growth (thus printing more RMB) which automatically will push inflation. But this is just the nice abstract economic theory

what many people suspect is that a very large amount of hot money is actually chinese money, but parked outside of China
As you surely know, Under, for chinese people with this kind of money, we dont need talk about the yearly limit of US$ 50,000. They have their ways (remember the small cigarettes shop in shenzen border passing billions of RMB to HK for the stock market, so the other way is true too)
The hot money started really to flow in China in 2005 when the RMB was de-pegged. At that time, people brought their money in China to bet on: RMB revaluation; property hot market; stock hot market.

There is another channel for the hot money, which the informal lending system (such as the Wenzhou underground banks that the China government has tried to "legalize" without much success in august) but I leave this aside for the moment.

Now, october 2008: the stock market is down 70% from october 2007; the real estate market starts to crack seriously, and it is going to be more serious soon because banks don't lend anymore as before.
and worse, there is a lot of talk inside the government circles to try to stop the RMB revaluation and maybe even reverse the movement to help the exporters who are going through hellish times

so, even if the figures of M. Pettis are not 100% accurate: in Q3, wth a trade surplus almost double of the Q1 one, the headline reserve growth is dropping steeply, and above all , the unexplained amount (mostly between trade surplus + FDI and reserve growth ) drops by half.
Of course, with China official data, we are never sure of the authenticty and accuracy, but I think it is pretty correct. ( if the unexplained amount passes from 30 billions to 14, with a much bigger trade surplus, it surely means that not only there is no new hot money coming in, but that it starts to move out)

A last word about "informal" banking: this is not new for me; I know tens of SME in zhejiang for example, who get financing for more than one year from wenzhou underground banks because regular banks are reluctant to loan, even more now that the export sector takes a hit (if you remember the Yiwu boss making socks who went into hiding and left a tab of 2 billions to the underground banks in july 2008, you will see what I mean).
But because now, the prospects of export sector are very grim, the property market will drop like stone, and the stock market will not recover , this hot money will flow out quickly.

In theory, it should be a good thing; problem is the crazy growth of the last 4 years was in very large part built on this a "lawless" money (same like Thailand in 1997).
This hot money leaving, plus definitely a reduction of FDI and even surely some foreign companies who will disinvest from China to bring back capital, possibly will bring serious liquidity pressure too in Chinese financial system.

Ouff I thought I would write just 10 lines...sorry for the long speech...Hope it is not too confused. If I have made some mistakes or inaccuracies feel free to correct me..but please dont flame me

chinamonty wrote:Jobs are starting to go. A couple of large toy manufacturers have gone bankrupt in DongGuan. 6,500 out of work instantly.

That's just the tip of the iceberg. A lot of small to medium sized factories along the coast have gone bust because of decreased orders from the US and other countries. It will get worse. How worse is anybody's guess at this stage.

travelinjack3 wrote:

Havard wrote:These changes will have little impact on expat who have decent jobs with MNC, I guess.

One of the big US automakers is sending several of their families home at Xmas in anticipation of a major domestic downturn. Scary since this is basically the only place they are making money.

US car sales are already at a ~25 year low and dropping. GM stock is at a 50+ year low (~$4.20) and Ford's is similar (~$2.20). Euro car sales are flat or dropping slightly, but their economic mess is just beginning.
The MNC's and the companies that support the MNC's will be cutting back. The ripple pattern is always the same, first houses, then cars, then everthing else.

travelinjack3 wrote:

Havard wrote:These changes will have little impact on expat who have decent jobs with MNC, I guess.

One of the big US automakers is sending several of their families home at Xmas in anticipation of a major domestic downturn. Scary since this is basically the only place they are making money.

It may be true...yet it is not because of the change of policy...it's because of the financial crisis that is sweeping the world.

Havard wrote:
It may be true...yet it is not because of the change of policy...it's because of the financial crisis that is sweeping the world.

Nobody said it is because of a change of policy..or should rather say everyone, even the MNC are adjusting their policies and priorities because of the crisis.
and now the priority No 1 s to tighten the belts
Even some big property investment projects in Shangha are called off
And the car market in China is sluggish for few months already, with very very large inventories

To go back to the original topic: it will not be just the tight policies of China which will reduce the number of foreigners in China, it will be the economic mess first