This is a market driven system which enables those wishing to sell foreign currency to exchange with those wishing to buy. In most cases, only profits from a joint venture or wholly foreign owned enterprise can be exchanged at swap centres. However, the volume of currency exchanged at these centres is increasing and converting local Chinese currency into foreign exchange for remittance abroad is now much less of a problem. As China pushes ahead with its application to enter the GATT, it will be forced to make its currency freely convertible. This is likely to lead to a formalisation of the swap centres as the means to setting China's foreign exchange rate.
China has no reliable legal system and resolution of disputes is next to impossible'.
China's legal system has developed steadily since 1979. China's international arbitration system has also earned the respect of foreign lawyers dealing regularly with China. The China International Economic and Trade Arbitration Commission is the second busiest in the world after Paris. It boasts an international panel of arbitrators with considerable experience and skill in resolving commercial disputes. Of course, parties are free to nominate arbitration outside China if that is their preference.