China's new rules on overseas bank card transactions will have a limited effect on card holders as they aim only to gather information to curb money laundering, not spending, an official said Tuesday.
From Sept. 1, banks are required to report all cash withdrawals on a daily basis, as well as domestic card transactions worth more than 1,000 yuan (about 148 U.S. dollars) at overseas brick-and-mortar and online stores, according to the State Administration of Foreign Exchange (SAFE).
"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 unnamed SAFE official.
The new rules do not mean there will be adjustment of forex management policies related to the use of bank cards overseas, according to SAFE.
The move is intended to improve transparency and data quality of overseas bank card transactions to meet the demands of international cooperation to fight crime, including money laundering, SAFE said.
SAFE said it will continue to support legal and convenient use of domestic cards overseas under the current account.
The new rules will be piloted starting Aug. 21.
Bank cards have become the main tool for overseas payment for Chinese, with overseas transactions by domestic individual card holders exceeding 120 billion U.S. dollars in 2016, SAFE data showed.
Transactions made through non-bank payment institutions do not need to be reported.
Individuals in China are allowed to change the equivalent of up to 50,000 U.S. 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 3.081 trillion U.S. dollars as pressure from capital outflows eased and the value of the U.S. dollar weakened, data from the central bank showed Monday.