On July 28, the State Administration of Foreign Exchange (SAFE) held the foreign exchange administration work meeting for the second half of 2022 via video conferencing. At the conference, essential arrangements of the CPC Central Committee and the State Council on economic and financial work were communicated in thorough to all participants. The conference summarized the foreign exchange administration work in the first half of the year, analyzed the current financial and foreign exchange situation, and made arrangements for the key tasks for the second half of the year. Pan Gongsheng, Secretary of the CPC Leadership and Administrator of the SAFE, delivered the work report. Members of the SAFE CPC Leadership and the Chief Accountant also attended the meeting.

According to the conference, since the beginning of 2022, the SAFE has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and earnestly implemented the guidelines of the Central Economic Work Conference and the arrangements of the Government Work Report. Under the specific guidance of the State Council’s Financial Stability and Development Committee, the SAFE steadily and vigorously promoted the inspection and rectification under the Party’s Central Committee, strived for the coordinated epidemic prevention and control as well as economic and social developmentefficient coordination of epidemic control and socioeconomic development, continuously promoted reforms and opening-up in the foreign exchange sector, effectively maintained the stability of the foreign exchange market, and increased the efforts of foreign exchange assistance to support enterprises with the focus on SMEs. In general, the work of the SAFE has achieved positive results, and China’s foreign exchange market has been operating smoothly and showing strong resilience. First, the inspection and rectification under the Party’s Central Committee were put in place. The SAFE earnestly studied and carried out General Secretary Xi Jinping’s important expositions and instructions on inspection work as well as financial and foreign exchange work, implemented the rectification requirements of the “five enhancements” and “four integrations”, and further promoted the “carpet-style” rectification and achieved phased results. Second, the SAFE increased the efforts of foreign exchange assistance to help ease enterprises' burden support enterprises and deepened the reforms and opening-up in the foreign exchange sector. Notably, the SAFE promoted policies on foreign exchange receipt and payment facilitation for trade to high-quality enterprises across the country, and improved the convenience of foreign exchange settlement in new forms and models of cross-border trade. It also broadened the channels of the cross-border financing for high-tech and “professional, refined, specific, and novel” enterprises, expanded the application scenarios of cross-border financial service platforms, and facilitated foreign investors to invest in China’s bond market. The agency actively helped enterprises manage exchange rate risks and took multiple measures to reduce the cost of hedging, expanded the pilot program of integrated domestic and foreign currency capital pools for multinational companies, and carried out pilot programs for high-level opening-up of cross-border trade and investment in certain regions. Third, SAFE has effectively prevented against the risks of cross-border capital flows. It has strengthened the macro-prudential management and expectation management, and maintained a high-pressure crackdown on illegal activities such as underground banks and cross-border gambling. Fourth, the SAFE constantly improved the operation and management of foreign exchange reserves, and China’s foreign exchange reserves remained generally stable.

The conference stressed that, in the second half of 2022, the foreign exchange administration at all levels should resolutely implement the arrangements and requirements of the CPC Central Committee on “effectively coordinated COVID-19 prevention and control with economic and social developmentefficiently coordinating pandemic prevention and control, stabilizing the economy, and ensuring security in development”. The SAFE should adhere to the general principle of pursuing progress while ensuring stability, and promote the full, accurate, and comprehensive application of the new development philosophy. The agency should actively introduce and solidly implement the policies and measures conducive to sustaining stable macroeconomic performance and serving the real economy. Meanwhile, it should further deepen the reform and opening-up in the foreign exchange sector, maintain the steady operation and the order of the foreign exchange market, and consolidate and expand the results of inspection and rectification. In short, the SAFE should complete all work tasks this year with full spirit and high quality, and welcome the successful convening of the 20th CPC National Congress 20th National Congress of the CPC with concrete action.

The conference outlined key tasks for foreign exchange administration for the second half of 2022. First, the SAFE should acquire a deep understanding of the decisive significance of the establishment of both Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and firmly uphold Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and uphold the Central Committee’s authority and its centralized, unified leadership. It will take inspection and rectification by the Party’s Central Committee as an opportunity to further enforce full, rigorous self-discipline within the Party. Besides, the SAFE will adhere to strengthen the Party’s overall leadership over financial and foreign exchange work, consolidate the results of centralized rectification, and deepen long-term rectification tasks. Furthermore, it will continue to strengthen the strict atmosphere and build a contingent of competent and professional officials loyal to the Party, with moral integrity and a keen sense of responsibility. Second, the SAFE will deepen the reform and opening-up in the foreign exchange sector to stimulate the vitality of market entities. To be specific, it will continue to promote the implementation and effectiveness of cross-border trade and investment facilitation policies, and actively assist in the promotion of exports, expansion of imports, and introduction of technology and foreign capital. It will expand the coverage of policies on foreign exchange receipt and payment facilitation for trade to high-quality enterprises, support the standardized and healthy development of new forms and models of foreign trade, and optimize foreign exchange services for individuals. The agency will improve the management of funds for overseas investors to invest in China’s bond market, and expand pilot programs to facilitate cross-border financing. It will take the micro, small and medium-sized enterprises (MSMEs) as the center to optimize foreign exchange services and support them to better manage exchange rate risks. Third, the SAFE will maintain the stable operation and improve the micro-regulation of the foreign exchange market. Specifically, it will strengthen the monitoring and response to risks in cross-border capital flows, and safeguard national economic and financial security. It will establish a management mechanism featuring substantial truth, diversified methods, due diligence, as well as safety and high efficiency. Moreover, it will severely crack down on violations of laws and regulations in the foreign exchange sector. Fourth, the SAFE will improve the operation and management of foreign exchange reserves and ensure security, liquidity as well as value preservation and appreciation of the foreign exchange reserves. Fifth, the SAFE will consolidate the foundation of foreign exchange administration. It will advance the revision of the Regulations on Foreign Exchange Administration, develop a high-level statistical system on the balance of payments, and further promote the “digital foreign exchange administration” and “safe foreign exchange administration”.

Leading officials of relevant departments, affiliated enterprises and institutions of the SAFE attended the conference at the main venue. Officials in charge of the Discipline Inspection and Supervision Office of the CPC Central Commission for Discipline Inspection and the National Commission of Supervision in the PBC, the Financial Audit Bureau I of the National Audit Office, and relevant departments of the PBC were invited to attend the meeting. SAFE branches (administrative offices) participated in the meeting at the branch venues. (End)