For the purpose of adapting to the requirements for statistics and monitoring of foreign-related receipts and payments under the new situation of China’s opening-up and for providing better services for macroeconomic decision making and social analysis and applications, the State Administration of Foreign Exchange (SAFE) recently revised and released the Classification and Codes for Foreign-related Receipt and Payment Transactions (2014 version) (HuiFa [2014] No. 21, hereafter referred to as “Codes [2014 version]”). 

The Codes (2014 version) will serve as an important institutional basis for preparing the balance-of-payments statistics in line with the Balance of Payments and International Investment Position Manual (Sixth Edition) issued by the International Monetary Fund (IMF). The major changes in the Codes (2014 version) are reflected in the following areas. First, adjustments have been made to adapt to the new international standards. For example, in line with the principle of ownership changes, transit trade has been transferred from trade in services to trade in goods, while the receipt and payment of processing fees for processing trade with supplied materials and outward processing have been transferred from trade in goods to trade in services; c investments, reverse investments among associated enterprises and corresponding revenue items have been added under direct investments. Second, monitoring of fund flows under trade in services will be further strengthened. For example, service items such as freight services, import and export freight insurance, travel, project contracting, and intellectual property rights are refined and adjusted. Third, statistical preparations and regulatory requirements are better met. For example, capital flows under trade in goods are classified by whether they are integrated into the Customs statistics, and transaction categories that are not covered in the Customs statistics are further refined; relevant codes are added under the securities investments for trading activities market conducted by non-residents in the domestic securities. Fourth, the declaration burdens of the declaring entities are lessened. Revision work has been conducted in line with the principles of necessity and minimization to delete and combine certain items.

The Codes (2014 version) will take effect as of May 1, 2014. The recommended national standards for the previous classification of foreign-related receipt and payment transactions will be adjusted accordingly.