MORE United States' companies are seeking advice on getting around operating restrictions in China, according to an expert with a leading Hong Kong-based consulting firm. However, many more US firms needed advice on China's foreign exchange regime, George Baeder, managing director of Pacific Rim Consulting Group (PacRim), said. Many US companies in China took risks because they were not fully informed about changes made to the forex market in January this year, he said. With foreign currency shortages predicted until 2004 in China and convertibility of yuan a distant goal, it was in a firm's best interest to seek professional advice, Mr Baeder said. 'Absence of a well-constructed approach to forex balancing is a risk to the survival of many US firms. The State Administration for Exchange Controls (SAEC) is tightening control over allocation of foreign exchange,' he said. Since changes to the forex system in January, new and old US enterprises operating in China had to get foreign exchange registration certificates from SAEC to open forex accounts. Certificates also allowed US companies operating under the old system to keep existing accounts open. However, under the new system, there were also potential restrictions. 'None have been applied but SAEC has the power to look at a company's ability to balance foreign exchange,' Mr Baeder said. 'Companies have to send documents proving they can balance their forex. SAEC can reject the documents and then advise the Investment Approval Office. 'The foreign exchange registration certificates have to be renewed annually.' In addition to registration certificates, US firms had to get annual authorisation from SAEC to trade or have access to swap markets, Mr Baeder said. 'There are now two points at which foreign companies can be told they cannot have access to foreign exchange at swap centres, which is limiting,' he said. 'For companies relying on importing ingredients for products sold in China, this could be detrimental. 'When forex is scarce, which is likely in any developing country using large amounts of foreign capital for infrastructural projects, the government can halt forex flow to low-priority areas such as consumer products.' The Chinese Government hopes to formalise regulations governing foreign company's access to swap centres later this month.