China Funds Ruling Blow to Builders
China's strict control on overseas currency transfers is adversely affecting some property development projects in Sabah, a dialogue between the Vice-President of All-China Federation of Returned Overseas Chinese (ACFROC), Qiao Wei, from Beijing, and industry players in Sabah was told.
Chief Operating Officer of the Kinsabina Group, Datuk Gerald Goh and Sabah Tourism Federation President, Datuk Seri Winston Liau, lamented that the restriction, which made it difficult for China nationals to buy property abroad and move money out of their country, was hurting their (developers') business.
They said the curb on foreign exchange transactions hampers Chinese companies seeking to invest overseas.
Authorities in China are also barring individuals from putting their cash into overseas markets to buy homes and other investments.
As a result, house buyers from China are unable to proceed with subsequent payments following their down payment in Sabah.
Cited was the case of a house buyer who paid 50,000 Renminbi as deposit for a house in Kota Kinabalu.
However, he is unable to settle the remaining payment(s) because he can't purchase foreign currency to buy property under the China Government's control over outflow of money overseas.
According to a Reuters report, starting this month (July), banks and other financial institutions in China will have to report all domestic and overseas cash transactions of more than 50,000 yuan ($7,201), compared with 200,000 yuan previously.
Banks will also need to report any overseas transfers by individuals of $10,000 or more.
Qiao said the new rules on yuan transfers were temporary.
"Hopefully, we will resolve the situation through a proper channel," he told the dialogue initiated by Sabah's representatives in the Committee of the ACFROC, Tan Sri Andrew Liew Sui Fatt and Datuk Lau Kok Sing at the Pacific Sutera Hotel.