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BEIJING, May 18 (Reuters) - China's foreign exchange regulator on Monday said it planned to ease inspection procedures as part of revised rules to encourage more investment abroad by Chinese companies.
In proposing the revision, the State Adminstration of Foreign Exchange (SAFE) said it would mainly confirm existing rules governing overseas investment but would consolidate them into a simpler framework and strip away some bureaucratic red tape.
China has taken a more aggressive stance in recent months in prodding firms to venture abroad, relaxing rules on outbound investment while still warning about the political and cultural risks in foreign deals.
"This is aimed at implementing the 'going out' development strategy as well as at promoting and facilitating overseas direct investment by domestic institutions," SAFE said in the statement on its website.
China has ample cash on hand to support overseas investment with its nearly $2 trillion in foreign exchange reserves, and outbound investment has gathered steam in recent months, especially in the resources sectors.
China's outbound foreign direct investment nearly doubled to $52.2 billion in 2008 from $26.5 billion in 2007.
Among the draft rule revisions, the foreign exchange regulator said that companies would be able to register the source of their foreign currency funding after investing abroad instead of the pre-investment vetting currently required.
SAFE added that it would also standardise the procedure for companies to seek approval for foreign investment, in place of the case-by-case system now in place.
The draft rules were far from a major liberalisation of China's guidelines, as SAFE said that any significant foreign investment would still require approval from other Chinese authorities.
It also said that any investor would still need to register with SAFE before transferring money abroad.
China's commerce ministry earlier on Monday urged domestic companies to ramp up their overseas investments, saying the time was ripe for them to buy relatively inexpensive foreign assets.
"The global financial crisis has made a profound adjustment to world economic geography," the Ministry of Commerce said in a statement on its website.
"Opportunities for going abroad to buy high-quality assets are growing and investment costs are falling. The terms of transactions are improving," it said.
"With a relatively sound macroeconomic framework, ample forex reserves and improving international competitiveness, we have solid foundations for developing more overseas investment," the ministry said.
The commerce ministry also encouraged Chinese firms to move faster in acquiring foreign firms with important technologies and strong brands, as well as to be more ambitious in developing their own operations abroad.
"Domestic firms and banks should strengthen their cooperation and give more attention to fostering famous brands and establishing sales networks in overseas markets," it said. (Reporting by Zhou Xin, Wang Lan and Simon Rabinovitch; editing by Kazunori Takada)