Company: CAAS
Filing Date: 2025-07-25
Form Type: F-4/A
Source: 0001104659-25-070492
Chunk: 87

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-25
Form: F-4/A
Chunk 87
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2015, 2018 and 2019, approval of SAFE is not required for opening a foreign
exchange account and depositing foreign exchange proceeds into the accounts relating to the direct investments. This circular also simplifies
foreign exchange-related registration required for foreign investors to acquire equity interests of PRC companies and further improves
the administration on foreign exchange settlement for FIEs.

The Circular on Further Simplifying and Improving
Foreign Exchange Administration Policy on Direct Investment, or SAFE Circular 13, which became effective on June 1, 2015, and was
amended in 2019, cancels the administrative approvals of foreign exchange registration of direct domestic investment and direct overseas
investment and simplifies the procedure of foreign exchange-related registration. Pursuant to the SAFE Circular 13, when setting up a
new FIE, investors should register with banks for direct domestic investment and direct overseas investment.

Loans by the Foreign Companies to Their PRC Subsidiaries

A loan made by foreign investors as shareholders
in an FIE is considered foreign debt in China and is regulated by various laws and regulations, including the PRC Regulation on Foreign
Exchange Administration, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debt Tentative
Provisions, the Detailed Rules for the Implementation of Provisional Regulations on Statistics and Supervision of Foreign Debt, and
the Administrative Measures for Registration of Foreign Debt. Under these rules and regulations, a shareholder loan in the form of
foreign debt made to a PRC entity does not require the prior approval of SAFE. However, such foreign debt must be registered with and
recorded by SAFE or its local branches within fifteen business days after entering into the foreign debt contract. Pursuant to these rules and
regulations, the balance of the foreign debts of an FIE cannot exceed the difference between the total investment and the registered capital
of the FIE.

On January 12, 2017, the PBOC promulgated
the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing,
or PBOC Notice No. 9. Pursuant to PBOC Notice No. 9, within a transition period of one year from January 12, 2017, FIEs
may adopt the currently valid foreign debt management mechanism, or the mechanism as provided in PBOC Notice No. 9, at their own
discretions