1. The relevant provisions on foreign investors' contribution in foreign currency or overseas RMB can be found in the supporting administrative regulations of the Foreign-funded Enterprise Law and the relevant normative documents of the Ministry of Foreign Trade and Economic Cooperation and its successor, the Ministry of Commerce: 1. Article 23 of the Regulations for the Implementation of the Law on Chinese-foreign Joint Ventures stipulates that the foreign currency contributed by a foreign party shall be converted into RMB or calculated into the agreed foreign currency according to the benchmark exchange rate announced by the People's Bank of China on the day of payment. 2. Article 25 of the Detailed Rules for the Implementation of the Law on Foreign-funded Enterprises stipulates that foreign investors may contribute their capital in freely convertible foreign currencies, or they may use machinery and equipment, industrial property rights, proprietary technology, etc. 3. Notice of the Ministry of Foreign Trade and Economic Cooperation on Issues Concerning Foreign Investment in Renminbi (No.492 [1998] Comprehensive Letter of Foreign Trade and Economic Cooperation): The State encourages foreign investors to make capital contributions in freely convertible foreign currencies. 4. The Ministry of Foreign Trade and Economic Cooperation mentioned in its reply to the Capital Account Management Department of the State Administration of Foreign Exchange that at present, in principle, foreign investors are still not allowed to contribute in non-profit RMB. 5. Article 2 of the Notice of the Ministry of Commerce on Issues Related to Cross-border RMB Direct Investment (Shangzihan [211] No.889, which has been suspended at present) clearly stipulates that two types of overseas RMB can be directly used for domestic investment by foreign investors: (1) RMB obtained by foreign investors through RMB settlement of cross-border trade, and RMB profits obtained from China and remitted abroad according to law, and RMB obtained from share conversion, capital reduction, liquidation and early recovery of investment; (2) Renminbi obtained by foreign investors through legal channels abroad, including but not limited to Renminbi obtained through overseas issuance of Renminbi bonds and Renminbi shares. 6. Announcement on Issues Related to Cross-border RMB Direct Investment (Announcement No.87 of the Ministry of Commerce in 213) Article 1: The term "cross-border RMB direct investment" as mentioned in this announcement refers to foreign investors (including investors from Hong Kong, Macao and Taiwan, the same below) who come to China to carry out foreign direct investment activities such as newly established enterprises, capital increase, equity participation or merger and acquisition of domestic enterprises with legally obtained overseas RMB.

ii. as for foreign investors' contribution or capital increase in domestic RMB, in fact, laws and relevant documents do not prohibit foreign investors from making contribution or capital increase in domestic RMB, but the source of RMB must meet the following requirements: 1. RMB profit. Paragraph 2 of Article 25 of the Detailed Rules for the Implementation of the Law on Foreign-funded Enterprises stipulates that, with the approval of the examination and approval authorities, foreign investors may also contribute their capital with RMB profits obtained from other foreign-funded enterprises established in China. The Notice of the Ministry of Foreign Trade and Economic Cooperation on Issues Related to Foreign Investment in RMB ([1998] Comprehensive Letter of Foreign Trade and Economic Cooperation No.492) further specifies the contribution of foreign investors in RMB profits, reiterating that RMB as foreign investment must be the RMB profits obtained by the foreign investor from other foreign-invested enterprises established in China, and the certificate of profit distribution and tax payment (exemption or reduction) of the invested enterprise shall be issued to the examination and approval authority, and the examination and approval authority shall approve it. 2. RMB funds obtained from liquidation, equity transfer, capital reduction and early recovery of investment. The Reply of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign Exchange Management of Foreign Investors' Reinvestment in RMB (Huifu [2] No.129) extends the scope of domestic RMB used by foreign investors as capital contribution to RMB funds obtained from the invested foreign-invested enterprises due to liquidation, equity transfer and early recovery of investment. Article 6 of the Announcement on Issues Related to Cross-border RMB Direct Investment (Announcement No.87 of the Ministry of Commerce, 213) stipulates that RMB obtained by foreign investors through capital reduction from invested foreign-invested enterprises can also be used for domestic investment. Foreign investors who reinvest in China with the above-mentioned RMB funds can enjoy the same treatment as foreign exchange investment in policy. 3. Funds settled and transferred in the special foreign exchange accounts of foreign investors in acquisition, expense and guarantee categories. Article 1 of the Notice of the State Administration of Foreign Exchange on Improving the Foreign Exchange Management of Foreign Direct Investment (Huifa [23] No.3) stipulates that: for foreign investors' special foreign exchange accounts for acquisitions, expenses and guarantees, if foreign investors set up foreign-invested enterprises in China, the balance of the above accounts can be transferred to the enterprise capital account, and the funds settled and transferred from the above accounts can be regarded as the corresponding approval documents issued by the foreign exchange bureau. 4. Development fund, reserve fund (or capital reserve fund, surplus reserve fund), undistributed profit, dividend payable and its interest payable, registered foreign debt principal and current interest are transferred to increase the capital of the enterprise. See point 3 of Huifa [23] No.3 for details. To sum up, as long as the domestic RMB obtained by foreign investors meets the above requirements, it can be used as foreign capital contribution or capital increase after approval. Therefore, it can't be generalized that foreign investors' monetary contribution in foreign-invested enterprises can only be foreign currency or overseas RMB contribution.

PS: On November 19th, 212, the Notice of the State Administration of Foreign Exchange on Further Improving and Adjusting Foreign Exchange Management Policies for Direct Investment (Huifa [212] No.59) has explicitly cancelled the original foreign exchange accounts for foreign investors (acquisition, guarantee, investment and expense). Cancel the approval of foreign-invested enterprises to increase the registered capital of enterprises with capital accumulation fund, surplus accumulation fund, undistributed profits and other legitimate income belonging to foreign investors, and the approval of foreign investors to reinvest with legitimate income such as domestic profits, equity transfer, capital reduction, liquidation and first recovery investment. On June 17, 214, the Notice of the Ministry of Commerce on Improving the Management of Foreign Investment Audit (Shangzihan [214] No.314) stipulated that the certification materials for foreign-invested enterprises mainly include (but are not limited to) the following forms: 1. If investors contribute in cash or cross-border RMB, the enterprise shall submit a bank receipt (or documents with the same certification effect) and a message; ..... 4. If the investment is made in domestic RMB, the approval certificate of the profit-generating enterprise, the annual financial statements for generating profits and the resolutions of the board of directors on profit distribution shall be submitted; Or the liquidation report of the enterprise from which the liquidation proceeds are obtained; Or the approval certificate of the enterprise obtained from the equity transfer and the resolutions of the board of directors related to the equity transfer.

iii. conclusion after combing the above laws and relevant documents, we find that foreign investors in foreign-invested enterprises can choose either foreign currency or RMB (both domestic and overseas) if they invest in currency, but there is no special requirement for choosing domestic RMB for investment, but there is no special requirement for choosing foreign currency or overseas RMB for investment. In other words, foreign investors take foreign currency as the principle and RMB as the exception (of course, return investment is the exception, because as far as I know about Shenzhen, return investment is basically realized through cross-border RMB direct investment, and other foreign investors still mainly invest in foreign currency). At this point, the question of the subject can be expressed as: Why should foreign investors receive special "care" for investing in domestic RMB? This is actually a question of policy interpretation, and the intention of the rule makers is not difficult to find: 1. Prevent arbitrage and maintain foreign exchange security; 2. Ensure that the sources of domestic RMB contributed by foreign investors are legal. In fact, as early as December 22, 1988, the State Administration of Foreign Exchange clearly pointed out in the Reply on Foreign Investment in RMB of Foreign-invested Enterprises ((88) Huiguantiaozi No.154) that foreign investment must be invested in foreign exchange; Rmb investment is limited to the RMB profits made by foreign investors from their joint ventures, and a certificate issued by the local foreign exchange administration branch is also required; Units and individuals who violate the above provisions shall be punished as arbitrage. The requirements of the Ministry of Commerce on the certification materials of foreign-invested enterprises' capital contribution clearly reflect the attention and concern of the competent authorities on the legality of foreign-invested RMB sources.