China’s top foreign exchange regulator says the country will not follow the “old road of capital controls”, as the government seeks to reassure investors that their money will not be trapped in China following recent measures to restrict capital outflows.

A flurry of moves to keep money onshore has sparked concern that China is backtracking on promises to liberalise cross-border investment and internationalise its currency. The measures include tighter approval procedures for foreign acquisitions by Chinese companies and higher hurdles for forex purchases by individuals. 

In a rare media interview, Pan Gongsheng, head of the State Administration of Foreign Exchange and deputy governor of the People’s Bank of China, described the recent tightening primarily as an effort to close loopholes and improve enforcement of existing rules and root out fraud, not to abandon the general trend towards greater openness.