China Unveils Sweeping Foreign Exchange Reforms to Boost Investment and Stabilize Property Market

New Measures Take Effect

On September 15, 2025, China's State Administration of Foreign Exchange (SAFE) officially implemented a comprehensive package of nine new foreign exchange (FX) measures. These reforms, outlined in the 'Notice on Deepening the Reform of Foreign Exchange Administration for Cross-border Investment and Financing,' are designed to significantly ease restrictions on foreign investment and streamline financial operations for international businesses operating in China.

Easing Property Purchase Curbs and Investment Procedures

A key component of the new regulations is the lifting of a long-standing restriction that previously barred foreign companies from purchasing residential properties for non-self-use. The ban on using capital account income for such property acquisitions has been scrapped, making it easier for overseas individuals and firms to invest in China's real estate sector. This move is intended to help stabilize the country's property market.

Furthermore, the reforms simplify various aspects of cross-border investment and financing:

• The requirement for preliminary registration of Foreign Direct Investment (FDI)-related fees has been abolished.
• Foreign-invested enterprises (FIEs) can now reinvest foreign exchange profits within mainland China without undergoing the previous registration process for the receiving entity.
• Restrictions on the use of capital account income have been reduced.
• Eligible foreign buyers can initiate foreign exchange settlement for property purchases using purchase agreements before completing local registration.

Expanded Financing for Innovative Enterprises

The new measures also expand cross-border financing access, particularly for technology-focused enterprises. Cross-border financing quotas for high-tech firms, 'Little Giant' specialized firms, and technology-oriented Small and Medium-sized Enterprises (SMEs) have been standardized at $10 million. Selected firms under an 'innovation points system' may even access up to $20 million, with simplified registration and contracting requirements.

Strategic Context and Official Statements

These policy adjustments are part of China's broader 'steady foreign investment' strategy, which has been aggressively pursued since 2023 to counter slowing foreign capital inflows. Li Bin, Deputy Head of SAFE, commented on the changes, noting that earlier restrictions were imposed to curb speculative 'hot money' flows during an overheated property market. He emphasized that 'Today, the market conditions are different, and it is necessary to adjust measures to fit the new reality and support stable growth in the housing sector.' The reforms underscore China's commitment to fostering a more open, predictable, and business-friendly investment environment.