Hu Xiaolian, Deputy Governor of the People's Bank of China and Administrator of the State Administration of Foreign Exchange (SAFE), recently visited Dalian , Suzhou , and Wuhan to carry out onsite investigations on the current foreign exchange situation and on work to strengthen supervision over cross-border capital flows. Taking part in the investigations were comrades from the Ministry of Commerce, the General Administration of Customs, and other relevant departments. Ms.Hu held individual study meetings with the foreign exchange administrative departments in Northeast China, East China, and Central China . She also held informal discussions with import and export enterprises and conducted a field survey of foreign-related enterprises.
Ms.Hu pointed out that although the domestic economy maintained rapid development this year, uncertainties are increasing and the macro-control situation remains serious, thus requiring adherence to the guideline of the "Two Preventions and One Tightening Measure," as set out by the central government to implement its instructions on strengthening supervision over cross-border capital inflows and outflows in foreign exchange administrative work and to improve the status of the balance of payments, thus ensuring China's economic and financial security.
As a result of the aftermath of the U.S. subprime lending crisis and the impact of the currency adjustments in the major countries, the world economy witnessed a recession this year, with international financial markets becoming increasingly unstable. The changing exchange rates of the major currencies and prices of international energy and grain have had an extensive effect on the direction and scale of international capital flows. China 's efforts to avoid the impact of international short-term speculative capital and to safeguard the security of the national economy face greater challenges. In order to improve the performance of national macro-control, measures should be taken to strengthen the management of cross-border capital flows; one major action is to prevent speculative money from being transferred across borders through trade, commercial credits, and other channels. We should strengthen and improve verification of the authenticity and consistency of foreign exchange receipts and expenditures under the current account and actual trade deals and focus on enhancing control and management over short-term external debt by improving management of trade-related foreign exchange collection and sales and trade credits.
Ms.Hu emphasized that improvements in the management of trade-related foreign exchange collection and sales and trade credits will promote convenient trade by adopting advanced information technology to fully achieve the effects of management, to simplify procedures, to raise efficiency, and to carry out various and proper measures for different industries and enterprises. She also pointed out that the policy adjustments according to the changing situations to ensure the authenticity of cross-border capital flows and its consistency with trade deals will help foster a good business environment for enterprises and will promote the smooth development of China 's economy and finance.
During the investigation, Hu fully affirmed the efforts made by local foreign exchange administrations to carefully implement the requirements by the central government to strengthen supervision over cross-border capital flows. She added that the current work to facilitate the balance of payments equilibrium still faces great challenges and every foreign exchange administrative department at all levels should work hard to fulfill its duties and to enhance the overall level of foreign exchange administration.