Special Topic III
In recent years, the overall scale of
I. Transforming the methods, improving efficiency, and effectively meeting the demands for foreign exchange under the current account
Actively promoting the reform of the foreign exchange administration system for trade in goods. In May 2010, the foreign exchange authorities implemented the reform of the verification and writing-off system of foreign exchange payments for imports through such methods as the “Pilot before Promotion”; in December 2011, on the basis of a summary of the experience in the verification and writing-off reform, the foreign exchange authorities carried out a pilot reform on the integration of the verification and writing-off system for imports and exports in 7 provinces (cities), such as Jiangsu and Shandong, established a new management mode for trade in goods with such characteristics as aggregate screening, dynamic monitoring, and classified management, simplified the document examination requirements for foreign exchange payments for imports, cancelled the procedures for the verification and writing-off of foreign exchange collections from exports and the online inspections of foreign exchange collections and settlements from exports, and reduced the number of administrative licensing items under trade in goods from six to two. After the reform, the receipts and payments of foreign exchange for imports and exports of enterprises that operate according to the law are not required to handle the procedures for the online inspections and the verification and writing-off on a case-by-case basis, and these can be directly handled by the banks upon the strength of the commercial documents. The operating costs for the enterprises and banks were significantly reduced. Supervision by the foreign exchange authorities is focused on the few enterprises with suspicious and irregular activities, which significantly improves the level and efficiency of supervision. This is widely welcomed and supported by the local governments and the various circles in society.
Permitting overseas deposits of export revenue, and actively supporting enterprises to “Go Out.” The policy of overseas deposits of export revenue was implemented for trial in four provinces (cities) such as
Facilitating receipts and payments under trade in services, and actively supporting economic structural adjustments. The foreign exchange authorities actively implemented the strategic policy of the State to transform the economic growth mode and to accelerate the development of the services industry, promoted the facilitation of foreign exchange receipts and payments under trade in services, and provided enterprises engaging in industries such as services outsourcing or tourism with policy benefits in such areas as the opening of foreign exchange accounts and fund exchanges. The foreign exchange authorities further improved management of external payments of foreign exchange, defined the scope of transactions for which tax certificates are not required to be submitted, unified the tax certificate form, and facilitated the handling of the procedures for external payments of foreign exchange by enterprises and banks. The foreign exchange authorities accelerated promotion of the reform of the management methods for trade in service.
Cancelling the quota management and improving the independence and enhancing the autonomy and convenience in the use of foreign exchange. In 2007, the foreign exchange authorities cancelled the quota management on foreign exchange accounts under the current account of enterprises so that they may reserve foreign exchange revenue under the current account on the basis of their operating needs. This further improved the autonomy and convenience for enterprise in holding and utilizing foreign exchange and helped the enterprises strengthen fund management and improve capital utilization efficiency.
II. Proceeding steadily and step by step, making orderly progress, and effectively supporting cross-border investments and financing activities.
Simplifying foreign exchange administration procedures for foreign direct investment, and utilizing scientific and technological means to improve the level of service. The foreign exchange authorities simplified the foreign exchange settlement procedures for foreign exchange capital of foreign-invested micro-credit companies and effectively supported the development of small and micro enterprises and the rural economy. The foreign exchange authorities carried out pilots in some regions and permitted foreign-invested enterprises that conform to the industrial incentive policy to independently make arrangements for foreign exchange settlement of foreign exchange capital. The management mode of capital withdrawal for foreign direct investment was changed from an examination and approval system to a registration system. An information system for the administration of foreign exchange with respect to direct investments was developed to facilitate the handling of the relevant business by enterprises through the Internet. A mode of centralized management and operation of foreign exchange funds was established and improved to facilitate improvements in the efficiency of capital utilization by enterprises, to reduce financing costs, and to accelerate the process for China’s financial service industry to reach international standards.
Energetically carrying out the reform of foreign exchange administration for overseas investments, and strengthening the support system for financing by overseas investment enterprises. While facilitating the practice of “Inviting In,” the foreign exchange authorities further deepened the “Going Out” development strategy. In 2009, a simple and clear system to manage registration of foreign exchange overseas investments was established. The foreign exchange authorities permitted qualified domestic enterprises to grant overseas loans within a certain quota, simplified the management procedures for external guarantees, relaxed the qualifications and conditions of debtors, cancelled the approval procedures for the performance of external guarantees by banks, supported domestic institutions to carry out overseas direct investments in RMB, and facilitated the subsequent financing of overseas enterprises.
Improving external debt policy and supporting the development of the real economy. While implementing moderately tight control over short-term external debt, the foreign exchange authorities continued to support import trade financing of banks and allowed usance letters of credit with a term of 90 days and below and import advance bills by overseas institutions with a term of 90 days and below not to be included in the short-term external debt quotas. The foreign exchange authorities optimized the quota distribution structure for banking financial institutions, appropriately distributed more quotas to small and medium joint-stock banks and local banks whose trade financing business had developed rapidly in recent years, improved the efficiency of quota utilization, and helped solve the “financing difficulty” problems of enterprises. The foreign exchange authorities formulated measures to facilitate Chinese-funded enterprises to borrow short-term external debt, domestic loans with overseas guarantees, and RMB loans with foreign exchange as pledges, gradually narrowed the difference between the financing policy for Chinese-funded enterprises and that for foreign-funded enterprises, and actively supported the financing demands of Chinese-funded enterprises.
III. Relying on technology, improving methods, and continuously optimizing foreign exchange information services
The foreign exchange authorities comprehensively integrated the information system and data in terms of foreign exchange administration, for example, by cooperating with the reform of the foreign exchange administration system for trade in goods, developing and applying the Foreign Exchange Monitoring System for Trade in Goods, and integrating the original nine operating systems for foreign exchange management business for trade into one system. Furthermore, the foreign exchange authorities changed the situation whereby different foreign exchange business systems dealt with the enterprises and the banks separately, established three major application portals that deal with the foreign exchange authorities, the banks, and the enterprises, realized conditions whereby “accessing the network through one portal, only one login and authentication was required, and one-stop services,” and significantly facilitated the operations of enterprises and banks. The foreign exchange authorities fully developed and made use of the Internet to improve the transparency of management information, which not only improved the efficiency of foreign exchange business for banks and enterprises, but also was beneficial for foreign exchange-related subjects such enterprises and banks to strengthen internal management. The foreign exchange authorities energetically promoted comprehensive information sharing with the customs and tax authorities, and established a joint supervision and service mechanism, which provided an effective means for strengthening the monitoring and analysis of cross-border capital flows and for improving the capability to precisely crack down on unusual transactions.
While continuously promoting the facilitation of trade and investment, the foreign exchange authorities actively created a comfortable and convenient environment for the utilization of foreign exchange by individuals. From 2007, a management method based on an annual quota has been implemented for foreign exchange settlement and purchases by domestic individual residents; foreign exchange settlement and purchases by domestic individual residents within USD 50,000 could be directly handled by the banks upon the strength of their identity certificates, significantly simplifying the procedures for foreign exchange settlement and purchases by individuals. Meanwhile, qualified banks are permitted to carry out individual foreign exchange settlement and sales business through E-banks, thereby enriching the channels for individuals to handle their foreign exchange settlement and sales business.
In 2012, the foreign exchange authorities will deeply implement the spirit of the Central Economic Work Conference and the National Financial Work Conference, grasp well the general focus of the work for “Steady Development,” energetically promote the facilitation of trade and investment, and actively improve the level of foreign exchange administration to serve economic development premised on controllable risks. The foreign exchange authorities will choose opportunities to expand nationwide the reform of the foreign exchange administration system for trade in goods; promote the foreign exchange administration reform for trade in services and insurance institutions; rely on technological means, continue to streamline administration, institute decentralization, and optimize procedures under foreign direct investment; gradually integrate and optimize the procedures for handling of the foreign exchange management business for capital accounts, such as investments and external debt; and establish and improve the platform for the monitoring and analysis of cross-border capital flows, while also improving the efficiency of supervision of cross-border capital flows and facilitating trade and investment activities.
