SHANGHAI, July 9 -- CHINA will scrap the system of checking exporters' foreign-exchange earnings because of its economic development, the State Administration of Foreign Exchange said on its Web site.

The currency regulator and Ministry of Commerce have decided to do away with the policy ``and will no longer examine the earnings,'' SAFE said today. It didn't elaborate on why the decision was made.

China has been aiming to improve the yuan's exchange-rate mechanism. The ending of checks is a step toward a freer currency system, said Guo Zhaoyang, a foreign-exchange analyst at China Everbright Bank.

``This will make the management of exchange rates freer and help spur exports and imports in a healthy way,'' Guangzhou-based Guo said.

The government is trying to increase imports as a way to balance international payments. A freer exchange-rate management system can help boost exports, which will encourage companies to increase their imported materials for production.