China Raises Overseas Lending Cap to Support Firms’ Global Expansion
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China will raise the ceiling on domestic companies’ offshore lending and unify rules for yuan and foreign-currency loans, giving firms greater financial flexibility to support global expansion.
Under new rules released Friday by the People’s Bank of China and the State Administration of Foreign Exchange, the macro-prudential adjustment coefficient for outbound loans was raised to 0.6. The coefficient, which was last increased from 0.3 to 0.5 in 2021, acts as a multiplier against a company’s latest audited equity to determine its maximum allowed offshore loan balance. A higher coefficient effectively allows businesses to channel more capital abroad.
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- China raised the offshore lending ceiling for domestic companies by increasing the macro-prudential adjustment coefficient to 0.6, enabling more capital outflows.
- New unified regulations cover both yuan and foreign-currency loans, aiming to facilitate Chinese firms’ global expansion while maintaining macroeconomic oversight.
- Companies must use their own funds for offshore lending; authorities can adjust lending parameters and require strict regulatory tracking of transactions.
- 2017：
- A macro-prudential framework for capital inflows, covering overseas borrowing by companies and financial institutions, was largely established by Document No. 9.
- 2021：
- The macro-prudential adjustment coefficient for outbound loans was last increased from 0.3 to 0.5.
- 2022：
- A separate set of rules introduced to govern overseas lending by financial institutions for capital outflows.
- October 2025：
- Authorities released a draft of the new rules for public feedback.
- March 20, 2026：
- New rules for offshore lending and the unification of yuan and foreign-currency loan frameworks were officially released by the People’s Bank of China and the State Administration of Foreign Exchange.
- March 20, 2026：
- Regulators stated that both the adjustment coefficient and the new conversion factor introduced by the rules can be adjusted depending on macroeconomic needs.
- March 20, 2026：
- Officials noted the rejection of proposals to freely choose the bank location for processing cross-border loans and to customize adjustment metrics based on individual company credit history.
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