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In 2013 the State Administration of Foreign Exchange (SAFE) received and handled 61 proposals from the NPC and the CPPCC. These proposals mainly involved areas such as the facilitation of trade and investment, support for enterprises “going-global,” and management of foreign exchange reserves. The SAFE attached great importance to the handling of these proposals, arranged relevant work, and made great efforts to carry out the related tasks. As a result, the handling of the relevant proposals for 2013 was completed successfully. The leadership placed great emphasis on the handling of the proposals and made detailed plans for the relevant tasks. The leading Party group of the SAFE also attached great importance to the handling of the proposals; the leadership of the Party branches held special meetings to make plans for the relevant work and to complete the specific requirements. Efforts were made to make institutional improvements to standardize the relevant work. A series of measures was formulated to ensure that the relevant work would be implemented in a systematic and standardized manner. The SAFE also managed to enhance coordination and communicationsso as to improvethe effectiveness and efficiency of the handling of the proposals. Various measures were taken to communicate with the delegates through a number of channels and to listen to comments and suggestions from the delegates in order to ensure the quality of the handling of the proposals. Efforts were intensified to provide training to relevant personnel and to enhance supervision. Relevant personnel who handle proposals from the NPC and the CPPCC were trained in a focused way, and supervision was enhanced so that there would be a response to each task. After the handling of the proposals, meetings were held to sum up the experience and good practices. The year 2014 is the first year that the SAFE has carried out the spirit of the Third Plenary Session of the 18th Central Committee of the CPC and it is an important year to fulfill the objectives of the 12th Five-Year Plan. The SAFE will make conscientious efforts to handle the 2014 proposals from the NPC and the CPPCC, which will be regarded as a benchmark for assessing implementation of the eight-point regulations of the Party Central Committee and for making efforts to carry out the mass line educational campaign. In 2014 the SAFE will further improve its work style, fulfill the relevant tasks in a pragmatic manner, and endeavor to achieve good performance with regard to the handling of the relevant proposals. 2014-02-27/en/2014/0227/1110.html
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On January 2, 2014, governor of the People's Bank of China (PBC), Zhou Xiaochuan, accompanied by Hu Xiaolian, deputy governor of the PBC, and Yi Gang, deputy governor of the PBC and administrator of the State Administration of Foreign Exchange (SAFE), paid a visit to the SAFE Central Foreign Exchange Business Center to call on officials devoted to administering foreign exchange reserves. On behalf of the Chinese Communist Party Committee of the Zhou Xiaochuan expressed his concern and care for all officials devoted to administering foreign exchange reserves and confirmed their achievements in 2013. As Zhou put it, in the complex global economic and financial situations in 2013, officials administering the foreign exchange reserves revealed an enormous sense of mission and accountability by carrying out the Chinese Communist Party’s mass line in educational practice and they conscientiously performed their responsibilities, thus ensuring the security, liquidity, and preservation and increases in the value of foreign exchange reserves assets, and making administration of foreign exchange reserves more regulated, professional, and globalized. According to Zhou, over the past several years, SAFE officials have been very low-key, down-to-earth, dedicated, and hardworking in terms of administering foreign exchange reserves and they have steadily strengthened their administration and management skills, have made new achievements in innovative uses of foreign exchange reserves, and have continuously improved risk controls and internal operations, thus ensuring the efficient management and use of foreign exchange reserves and making significant contributions to accomplishing China’s reform and development objectives as well as its China's economic and financial security. As Zhou emphasized, because the year 2014 marks the first year to implement the spirit of the Third Plenary Session of the 18th CPC Central Committee and to deepen the reforms in an all-round way, officials devoted to administration of foreign exchange reserves must rigorously implement the spirit of the 18th National Congress of the CPC, the Third Plenary Session of the 18th CPC Central Committee, and the Central Economic Work Conference, further strengthening their sense of mission and accountability, enhancing their confidence and cohesion, and working assiduously, despite the difficulties, to push ahead with the administration of foreign exchange reserves and to make foreign exchange reserves better serve the real economy and the reforms, thereby contributing to fulfillment of the Chinese dream of revitalizing the nation. 2014-01-02/en/2014/0102/1099.html
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A meeting was recently held by the State Administration of Foreign Exchange (SAFE) to convey and study the spirit of the second clean government work conference of the State Council and to make plans for implementation. Yi Gang, administrator and secretary of the Party Leadership Group of the SAFE, presided over the meeting. The meeting underlined the importance of studying and implementing the spirit of the conference for the present and for the foreseeable future. The SAFE should conscientiously implement the central government's requirements for combating corruption and upholding integrity, promote the building of a clean government through institutional reforms, and strive to achieve new progress in its efforts to combat corruption and to build a clean government. At the meeting it was emphasized that the SAFE should implement the spirit of the third plenum of the eighteenth Central Commission for Discipline Inspection and the second clean government work conference of the State Council, further integrating anti-corruption and upholding integrity in foreign exchange administration efforts. Specifically, the SAFE should (1) continue to implement the eight-point guideline and the three-point covenant; (2) deepen the reform of foreign exchange administration in key areas and continue to streamline administration and delegate power to lower levels; (3) enhance the building of institutional systems to combat corruption, to uphold integrity, and to deepen risk controls in this regard; (4) impose stringent rules on financial discipline and management; (5) advance transparency in foreign exchange administration; and (6) enforce rigid discipline. Leadership teams should play an exemplary role in implementing the rules for improving the work styles of CPC officials, for building clean government, and for ensuring that decrees of the central government are adequately conveyed to the lower levels. 2014-02-12/en/2014/0212/1105.html
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Question 1: What have the foreign exchange authorities done about cracking down on illegal and irregular capital inflows during the past five years? Answer: In recent years, facing the complicated and volatile economic and financial situations both at home and abroad, the State Administration of Foreign Exchange (SAFE), in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, deeply implemented the scientific outlook on development, adhered to the principle of “expanding domestic demand, making structural adjustments, reducing the surplus, and promoting the balance of payments,” strengthened the monitoring and management of cross-border capital flows, increased efforts to carry out foreign exchange inspections on the basis of developments in the change of situation, improved foreign exchange inspection methods, rigorously cracked down on illegal and irregular flows of foreign exchange funds, and effectively guarded against the impact of cross-border capital flows. From 2007 to 2011, the foreign exchange authorities investigated a total of over 15,000 cases of activities in violation of the foreign exchange laws and regulations, and imposed a total of RMB 1.27 billion in administrative fines. In 2007, the SAFE carried out a “Comprehensive Inspection of the Inflow and Settlement of Foreign Exchange Funds” in ten coastal areas, such as Guangdong, whose total amount of foreign exchange receipts and payments accounted for more than 50% of China’s total, basically determining the channels for the inflow of illegal and irregular foreign exchange funds, such as those in the guise of foreign direct investment and trade in goods. In 2008, China ’s surplus of foreign exchange settlement and sales continued to expand, and the situation worsened in terms of the surplus of foreign exchange settlement and sales in trade in goods exceeding the surplus of customs imports and export trade. The SAFE carried out special inspections and investigations in five regions, such as Jiangsu, of the situation of importing without foreign exchange payments and making foreign exchange payments without foreign exchange purchases, and determined the reason for such a situation in terms of the trade in goods and its impact on the sharp increase in the surplus of foreign exchange settlement and sales. In 2009, the SAFE carried out special inspections of foreign-invested enterprises in ten regions, such as Liaoning, and discovered violations of the regulations on foreign exchange administration, e.g., some foreign-invested enterprises handled the procedures for profit remittances by making use of false vouchers, and for the foreign exchange settlement of capital by making use of false materials, and willfully changed the use of funds after conversion. In 2010, the SAFE organized and carried out special actions for dealing with and cracking down on hot money in 13 provinces (cities) with a large volume of foreign exchange business, carried out a comprehensive inspection of the foreign exchange inflows by such key channels as trade in goods and foreign direct investments, and rigorously cracked down on irregular cross-border capital flows. In 2011, the SAFE promoted throughout the country special actions for dealing with and cracking down on hot money. During the year, the foreign exchange authorities investigated and handled a total of 3,488 cases involving activities in violation of the regulations on foreign exchange administration, collected RMB 503 million in penalties and confiscations, and made outstanding achievements in dealing with and cracking down on the inflows of hot money. Question 2: What achievements have the foreign exchange authorities made in recent years in terms of cracking down on major activities in violation of the foreign exchange laws and regulations, such as illegal banks? Answer: The SAFE pays much attention to investigation of major cases in violation of the foreign exchange laws and regulations involving large amounts, wide regions, and many participants. The major cases involved a huge volume of funds, caused great damage to domestic macro-controls and market stability, and had an adverse social impact. From 2007 to 2011, the SAFE overcame difficulties and gathered its forces together to deal a crushing blow to the illegal activities. During that period, the foreign exchange authorities investigated a total of 23 major cases, involving RMB 31.937 billion; cooperated with the public security bodies to ferret out 65 cases involving illegal banks, 26 cases involving online foreign exchange speculation, and 119 cases involving illegal sales and purchases of foreign exchange, with a total amount of over RMB 100 billion; apprehended more than 1,000 suspects, and imposed a total of RMB 160 million in administrative fines; and rigorously cracked down on the arrogance of the offenders and criminals violating the laws on foreign exchange administration and effectively safeguarded the economic and financial order of China. While rigorously cracking down on the major activities in violation of the laws and regulations, such as the illegal banks, the SAFE implemented measures based on a combination of dredging and blocking principles, improved regulatory measures, further improved the convenience of services, satisfied the reasonable demands of the society for cross-border payments, and put pressure on the space for illegal foreign exchange trade. Question 3: What are the key targets of inspection in the foreign exchange authorities’ crack down on the illegal and irregular cross-border flows of foreign exchange funds? Answer: The SAFE firmly focused on the key link of cross-border capital flows, i.e., the financial institutions, such as the banks, in its inspections, and deeply carried out special inspections of financial institutions. In 2007, the foreign exchange authorities carried out special inspections of the foreign exchange collection and settlement and the short-term external debt in 208 banks and branches in four regions, such Beijing . In 2008, the foreign exchange authorities carried out special inspections on implementation of the management policy for the foreign exchange settlement of capital by the designated foreign exchange banks in ten regions, including Guangdong and Fujian . In 2009, the foreign exchange authorities carried out comprehensive inspections of foreign exchange business compliance of the head offices and nine branches of two joint-stock banks. In 2010, in consideration of such problems as the rapidly expanding scale of the inflows of foreign exchange funds through the banks, the foreign exchange authorities intensified their efforts to inspect the banks’ foreign exchange business. In 2011, the foreign exchange authorities further increased the frequency of inspections. While carrying out special inspections of the head offices of Chinese- and foreign-funded banks, the foreign exchange authorities carried out sample inspections in return visits to 26 banks that had been inspected in 2010 and effectively consolidated the achievements of these inspections. Question 4: In recent years, the foreign exchange authorities’ achievements in the investigation of cases involving illegal and irregular capital such as hot money have significantly improved. What is the main reason for this? Answer: As the scale of foreign exchange receipts and payments continuously expands, the foreign exchange trade methods become more complicated, and the illegal and irregular flows of foreign exchange funds, such as hot money, become more complicated and secretive, consequently, the traditional foreign exchange inspection methods that rely on manpower and manual work can no longer meet the work requirements of the situation. In order to improve the inspection efficiency and precisely crack down on illegal and irregular funds such as the hot money, the SAFE energetically elevated and improved the off-site inspection methods. In 2010, the SAFE developed the Off-site Foreign Exchange Inspection System. The system has wide coverage and a strong search ability for information, can rapidly and accurately lock the subjects in violation of the laws and regulations and their violation activities, strengthened the ability of the foreign exchange authorities to deeply search for clues about illegal and irregular capital flows, changed the past working mode that was based upon extensive screening, and played an important role in improving the accuracy, initiative, and effectiveness of cracking down on illegal and irregular flows of foreign exchange funds, such as the hot money. Question 5: The special actions dealing with and cracking down on hot money contribute to deterring flows in violation of the foreign exchange laws and regulations. In addition, what measures do the foreign exchange authorities have to enhance the law-abiding awareness of market players? Answer: Based upon regulatory practices in recent years, most of the market players carried out lawful foreign exchange operations, most of the demand to use foreign exchange and transactions had authentic bases, and part of the activities in violation of the regulations on foreign exchange administration were due to a lack of knowledge of the policy adjustments and regulatory changes in foreign exchange administration. Therefore, in recent years, while rigorously cracking down on activities in violation of the foreign exchange laws and regulations, the SAFE placed high priority on foreign exchange policy propaganda and alertness education and actively took a variety of measures to promote lawful operations by foreign exchange business operators. First, increasing efforts on positive propaganda, and reducing unintentional irregular activities. One the one hand, the foreign exchange authorities spread the foreign exchange administration policies through a variety of media, such as television, newspapers, and networks; on the other hand, the foreign exchange authorities introduced foreign exchange administration knowledge and business handling procedures through such means as on-site consultations and the distribution of brochures so as to actively help foreign-related enterprises and the public better acknowledge and understand foreign exchange administration policies and regulations and the specific handling procedures, and to reduce unintentional irregular activities by foreign exchange transaction participants. Second, increasing efforts for the disclosure of information on illegal and irregular activities to deter activities in violation of the laws and regulations. From 2007 to 2011, the SAFE provided the public with services for searching and disclosing information on illegal and irregular activities in a total of 9,775 enterprises. In 2010 and 2011, the SAFE publicly exposed some major irregular activities, and disclosed, in 6 batches, typical cases of activities in violation of the foreign exchange laws and regulations involving 17 bank violators, 26 enterprise violators, and 13 individual violators. Question 6: What arrangements do the foreign exchange authorities have this year to crack down on illegal and irregular cross-border capital flows? Answer: In 2012, the SAFE will thoroughly implement the spirit of the Central Economic Working Conference and the National Financial Working Conference, grasp well the general keynote of the work for “Steady Development,” continuously enhance the sensitivity and prospects of inspection work, and increase efforts to monitor and crack down on unusual cross-border capital flows, such as hot money; give full play to the advantages of the Off-site Foreign Exchange Inspection System, and carry out special inspections and investigations; strengthen resource integration and interdepartmental cooperation, and continue to increase efforts to crack down on illegal and criminal activities with respect to foreign exchange, such as illegal banks; actively improve the inspection methods, perfect the inspection means, and improve the relevant and effectiveness of foreign exchange inspection work; seriously punish activities in violation of the foreign exchange laws and regulations in accordance with the law, create a stable, harmonious, and sound market environment for foreign exchange reform and development, and effectively safeguard the economic and financial security of China. 2012-06-07/en/2012/0607/1053.html
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To maintain the economic and financial security of the state and to crack down strongly on cross-border flows of illegal and irregular funds, such as "hot money", the State Administration of Foreign Exchange (hereinafter referred to as the "SAFE") revealed two groups of cases involving some enterprises and individuals that had illegally conducted foreign exchange transactions and were subjected to penalties on November 1, 2010 and December 10, 2010 respectively. Now, a third group of such cases, based on the progress of the relevant inspections, is announced as follows: I. From January to March 2010, a total of 21 customs declarations of Guangzhou Couger Metal Material Ltd. failed to go through the registration procedures for the withdrawal of deferred foreign exchange payments for imports as per the relevant provisions, with the illegal amount amounting to USD1.2927 million. The above behavior was deemed to be in violation of the relevant provisions for the registration of external debt, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon the said company pursuant to the Regulations of the People's Republic of China on Foreign Exchange Administration (hereinafter referred to as the "Regulations"). II. From January 2009 to June 2010, Shenzhen Mission Hills Golf Club Co., Ltd. directly collected a total of HKD21.3265 million in cash paid by customers for consumption, and then settled HKD16.0375 million in RMB in the name of company's staff. RMB13.9479 million was deposited into the account of the company. The above behavior was deemed to be in violation of the relevant provisions on the administration of collections and payments of foreign currency by domestic institutions and in violation of the legal handling of foreign exchange settlements. Hence, the SAFE rendered a decision to impose a fine as an administrative penalty upon the said company pursuant to the Regulations. III. From May to July 2009, Power-One Co., Ltd. in Shenzhen city, claiming business travel expenses, collected payment for sale of goods with an actual amount higher than the figure on the customs declarations form through four transactions totaling USD2.98 million. The above behavior with respect to the inward remittances of foreign exchange was in violation of the relevant provisions, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon the said company pursuant to the Regulations. IV. During the period from April to November 2009, a person surnamed Zhang, a local citizen in Zhejiang province, in the name of 14 company employees, collected and settled USD799,800 from Hong Kong, and the settled RMB was transferred to Zhang's personal account. The above behavior constituted a split settlement of foreign exchange and was deemed to be in violation of the relevant provisions on the administration of personal foreign exchange. The SAFE thereby rendered a decision to impose a fine on Zhang as an administrative penalty pursuant to the Regulations. V. From November to December 2009, Lingguo Ecological Agriculture Co., Ltd. in Rugao city, Jiangsu province, by virtue of the equipment purchase contract signed with Haoli Trading Co., Ltd. in Qidong city, Jiangsu province, settled USD4.1 million of foreign exchange. However, it failed to utilize the settled RMB in the way for which it was applied, but it instead transferred the settled RMB14.9894 million to Haoli Trading Co., Ltd. under the current account. The above behavior constituted a change of purpose for settled foreign exchange and was deemed to be in violation of the relevant provisions on the administration of foreign exchange settlement. The SAFE thereby rendered a decision to impose a fine upon the said company an administrative penalty pursuant to the Regulations. VI. From June to September 2008, Jiangbo Century (Laiyang) Biotechnology Co., Ltd. in Shandong province settled USD27.7 million of foreign exchange for foreign investments through 3 transactions to pay for land purchases. In fact, the company did not acquire the corresponding land-use rights, and the settled capital of RMB185 million was transferred to Jiangbo Medicine Group in Yantai city and to Shandong Hilead Biotechnology Co., Ltd. for use through various channels. The above behavior was deemed to be in violation of the relevant provisions on the administration of settlement of foreign exchange, and the SAFE thereby rendered a decision to impose a fine upon the said company as an administrative penalty pursuant to the Regulations. VII. On June 30, 2008, after settling AUD3 million of foreign exchange from foreign investors, Aocheng Investment Consultant Co., Ltd. in Yantai city, Shandong province, on the next day transferred the settled capital of RMB19.7916 million to Baocheng Real Estate Co., Ltd. in Yantai city for an investment fund, which exceeded the normal production and business scope of the company. The above behavior was deemed to be in violation of the relevant provisions on the administration of foreign exchange settlement, and the SAFE thereby rendered a decision to impose a fine upon the said company as an administrative penalty pursuant to the Regulations. VIII. On March 4, 2009, Xinjiang Yumei Energy Co., Ltd. applied to settle HKD79.527 to pay for the transfer of initial mining rights to New Century Mining Co., Ltd., and on the same day it made such payment to the latter. Yet on the same day both parties suspended acquisition of the mining rights and abolished the Contract for the Transfer of Mining Rights and the Contract to Mortgage Assets. On March 5, 2009, New Century Mining Co., Ltd. transferred RMB70 million of the settled foreign exchange to the corporate account of Xinjiang Yumei Energy Co., Ltd. The latter then used the capital as entrusted loans to Chongqing Xuchuan Trading Co., Ltd. The above behavior was deemed to be in violation of the relevant provisions on the administration of foreign exchange settlement, and the SAFE thereby rendered a decision to impose a fine upon the said company as an administrative penalty pursuant to the Regulations. IX. On December 27, 2007, Jianghe Water Affairs Co., Ltd. in Jiangxi province, based on an invalid contract for the transfer of state-owned land-use rights, settled USD5 million of foreign exchange from foreign investors. On the same day, the settled RMB36.5268 thereof was transferred back to the company through Fairy Lake New City Development Co., Ltd. in Xinyu city. From June 2008 to April 2009, the settled capital of RMB24 million was transferred by Jianghe Water Affairs Co., Ltd. to securities companies and then ended up on the stock market. The above behavior was deemed to be in violation of the relevant provisions on the administration of foreign exchange settlement, and the SAFE thereby rendered a decision to impose a fine upon the said company as an administrative penalty pursuant to the Regulations. X. During the period from January 2009 to February 2010, Feidike Beauty Equipment (Shanghai) Co., Ltd. in Shanghai, when exporting beauty equipment, neither applied for the verification and writing off forms for export proceeds in foreign exchange, nor underwent the customs declaration procedures, but rather exported the goods directly by an air express company. Upon collection of the foreign exchange, the company combined the export proceeds with nontrade revenue, such as R&D expenses and product freight, failed to distinguish the nature of the fund for each foreign exchange receipt, and falsely declared it as "freight", "consulting services fees", or "trade payments". The company collected a total USD7.9053 million through 22 transactions, which were declared as revenue from services trade, but as a matter of fact constituted revenue from the selling of goods. The above behavior was deemed to be in violation of the relevant provisions on the administration of the verification and writing-off of foreign exchange collections from exports as well as of the declaration of balance of payments statistics. The SAFE thereby rendered a decision to impose a fine upon the said company as an administrative penalty pursuant to the Regulations. All market entities shall conscientiously remain aware of their social responsibilities, and operate in a prudent and scientific manner and in strict compliance with the policies on foreign exchange administration. The penalized enterprises and individuals shall regard the penalties as warnings and henceforth always bear in mind the concept of legitimate operations. All other enterprises and individuals shall also draw lessons from the above-mentioned cases to strengthen their self-discipline and to operate their businesses in strict accordance with the law. The SAFE shall vigorously facilitate trade and investment and enhance a service-oriented awareness so as to meet the reasonable foreign exchange demands of enterprises and individuals. Furthermore, strengthened efforts shall be made to supervise and inspect the foreign exchange business of market entities with respect to compliance with the regulations and to crack down on the flow of "hot money", thus safeguarding the foreign-related economic and financial security of the state. 2011-07-11/en/2011/0711/1004.html
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In general, the Compulsory Foreign Exchange Settlement and Sales System refers to the administrative arrangement whereby the foreign exchange income obtained by residents shall be sold to financial institutions designated by the State and foreign exchange to be utilized shall be purchased from financial institutions designated by the State. Residents do not have autonomy to keep and utilize the foreign exchange. The System is mostly adopted by economies with a shortage of foreign exchange resources. During the planned economy period, due to the shortage of foreign exchange, China implemented strict mandatory planning management of foreign exchange receipts and payments. Since the reform and opening up, in order to adapt to the requirements for China to establish a socialist market economy system, the reform of the foreign exchange administration system has been advanced in an orderly fashion, the residents’ autonomy to utilize foreign exchange has steadily expanded, and the levels of trade facilitation and investment have continuously improved. In January 1994, China cancelled the examination and approval procedures for foreign exchange utilization plans under the current account, such as enterprise imports, and began to allow enterprises to directly purchase foreign exchange from designated foreign exchange banks upon the strength of valid documents. In December 1996, China announced realization of current account convertibility and lifted restrictions on overseas payments and transfers under the current account; however, foreign exchange from such sources as the export income of the enterprises, in principal, still had to be sold to the designated foreign exchange banks. Since entry into the WTO, China ’s foreign economy has developed rapidly, and the principal contradiction in its balance of payments gradually changed from the past shortage of foreign exchange to a rapid increase in foreign exchange reserves. From 2002 to 2011, China ’s foreign exchange reserves increased by nearly USD 300 billion annually, 12 times the annual increment from 1994 to 2001. Conforming to the change in the situation and the actual requirements of the market players, from 2001, by improving management of the opening of foreign exchange accounts and management on the basis of limits, China has gradually expanded the autonomy of enterprises to retain foreign exchange. First, it relaxed the conditions for enterprises to open foreign exchange accounts and to retain foreign exchange. In 2001, enterprises which satisfied such conditions as the foreign exchange receipts from exports during the year were above the equivalent of USD 2 million and the foreign exchange payments of the year were above the equivalent of USD 0.2 million began to be allowed to open foreign exchange settlement accounts to retain their foreign exchange income from such matters as goods exports and trade in services within certain limits, subject to the approval of the foreign exchange authorities. In 2002, the restrictions on the conditions for account opening were lifted, and all enterprises with foreign trade operation rights or foreign exchange revenue under the current account were allowed to open foreign exchange accounts under the current account upon the approval of the foreign exchange authorities. In 2006, the ex-ante approval procedures for account opening were cancelled, and the enterprises may now open foreign exchange accounts under the current account directly with the banks without the approval of the foreign exchange authorities. Second, it raised the limit on the foreign exchange allowed to be retained in foreign exchange accounts. In 2002, the limit was 20 percent of the enterprises’ foreign exchange revenue under the current account during the last year. In 2004, the limit was raised to 30 percent or 50 percent. In 2005, the limit was further raised to 50 percent or 80 percent. In 2006, the original method whereby the limit was ratified only on the basis of the revenue that was changed, the limit was ratified on the basis of the sum of 80 percent of the foreign exchange revenue under the current account and 50 percent of the foreign exchange payments under the current account of the enterprises during the last year, thus, further raising the limit of foreign exchange that may be retained by the enterprises. In 2007, management of the account on the basis of such limits was cancelled, and enterprises began to be allowed to the keep foreign exchange on their own based on their operating needs. In 2008, the amended Regulations of the People’s Republic of China on Foreign expressly provided that the enterprises and individuals may retain the foreign exchange in accordance with the relevant provisions or sell the foreign exchange to the banks. Since 2009, in order to further promote facilitation of trade and investment and to improve policy transparency, the foreign exchange authorities have energetically carried out a cleaning-up of the regulations, and announced that a total of over 400 normative documents concerning foreign exchange administration were repealed and invalidated. It was announced that the normative documents concerning compulsory foreign exchange settlement and sales would be repealed, invalidated, or amended. At present, all the policies and regulations concerning compulsory foreign exchange settlement and sales are no longer in effect and are no longer implemented. Overall, the Compulsory Foreign Exchange Settlement and Sales System, as an administrative arrangement in the era of a shortage of foreign exchange, played an important role in supporting the development of the real economy and safeguarding the economic and financial security of China . As the foreign economy develops, the foreign exchange authorities have timely adjusted and abolished the Compulsory Foreign Exchange Settlement and Sales System, consistent with the concepts and purposes of foreign exchange administration keeping up with the times and serving the overall situation of economic development. In the future, foreign exchange administration will abide by the risk limits and further promote facilitation of trade and investment and actively serve the development of the real economy. 2012-06-07/en/2012/0607/1052.html
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We are an official institution under the State Administration of Foreign Exchange (SAFE), responsible for China ’s foreign exchange reserve management. We are now looking for high caliber professionals who share our commitment to “professional, responsible and international” asset management to join us. Our Culture Composed of young, qualified and motivated staff from diversified academic backgrounds of finance, economics, engineering, maths, computer science, languages and human resources etc., we embrace “Dedication, Discipline, Enterprise and Cooperation” as our core value and we attach utmost importance to the safety, liquidity, diversification and return of reserve assets under our management. We value human capital as the most important resources and offer competitive reward incentives. Vacancies Currently, we have the job vacancies in our asset allocation group (Strategist and Macro economist), external managers group (Alternative Assets Investment and Management) and risk management group (Market risk and Legal affairs), based in Beijing headquarter. Basic requirements 1. Masters or above degree from world renowned universities; 2. Relevant working experience with renowned financial institutions; 3. Good command of both Chinese and English as working language; 4. Computer proficiency; 5. Healthy; 6. Other criteria specific to the vacancies. Application procedures 1. Please visit the website of http://rmdhr.safe.gov.cn to submit your application. We ONLY receive the application through our website; 2. Application deadline: refer to the vacancy list; 3. Short-listed applicants will be invited to written test and interview after documentation screening; 4. New recruits will be required to sign Employment Contracts (with probation) in accordance with Chinese and local regulations. Contact Fax: 86-10-66213319 Email: HR@mail.rmd-safe.gov.cn (recommended) FILE: 2012 Experienced Professional Recruitment Program, Reserve Management Department, SAFE 2012-03-30/en/2012/0330/1041.html
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In the first half of 2011, the foreign exchange authorities maintained tough measures against hot money, investigated 1,865 cases involving violations of foreign exchange laws and regulations, and imposed relevant penalties of more than USD16 billion, an increase of 26.2 percent and 26.9 percent respectively over the same period of the last year. With respect to the current key channels and typical methods of inflows and settlement of illegal and irregular foreign exchange funds, the foreign exchange authorities have further improved inspection methods, comprehensively promoted the use of an off-site foreign exchange inspection system, implemented multi-dimensional monitoring of the foreign exchange receipts and payments of various market players, and continually improved the accuracy of cracking down on activities in violation of the foreign exchange laws and regulations. In the first half of 2011, the foreign exchange authorities in different localities carried out special inspections of over 80 items, investigated a number of major cases occurring in Guangdong , Shanghai , Jiangsu , Shandong , Guangxi, and Hainan , and imposed relevant penalties. During the inspections, the foreign exchange authorities strictly carried out law-based administration, adhered to implementing legal procedures and imposing appropriate penalties, as well as energetically facilitated the legitimate operations of enterprises. As for the investigations and penalties, the total amount of administrative penalties and confiscations imposed by the foreign exchange authorities in the first half of the year was RMB260 million, exceeding that for all of the last year (RMB243 million). Among the penalized activities in violation of the regulations on foreign exchange administration of financial institutions, the following activities are relatively common: exceeding the short-term external debt quota, handling foreign exchange settlement and sales in violation of the regulations on foreign exchange administration, handling receipts and payments under the capital account in violation of the regulations on foreign exchange administration, and failing to carry out reasonable examinations and verifications of the authenticity of the receipt and payment instruments under the current account. The former three irregular activities involved a total of USD9.27 billion, accounting for 57.9 percent of the entire amount involved. Among the penalized activities of enterprises in violation of the regulations on foreign exchange administration, the following are the most common: first, changing without approval the use of foreign exchange or the RMB funds from foreign exchange settlement, second, activities in violation of the regulations on external debt administration, and third, activities such as remitting foreign exchange to China in violation of the regulations on foreign exchange administration or illegal foreign exchange settlement. The above three irregular activities involved a total of USD2.51 billion, accounting for 15.7 percent of the entire amount involved. Facing the complicated economic situations both at home and abroad, the foreign exchange authorities will continue to rigorously crack down on irregular cross-border capital flows, with special focus on seriously combating the inflows of hot money, further improving inspection methods, and intensifying the investigation and punishment of major cases. Furthermore, the foreign exchange authorities will strengthen coordination and cooperation with the relevant regulatory authorities, give full play to the role of the relevant coordination mechanisms, and create a synergy for dealing with and cracking down on hot money. 2011-08-16/en/2011/0816/1010.html
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The State Administration of Foreign Exchange (SAFE) recently held a briefing on foreign exchange inspections of financial institutions; the relevant persons-in-charge of 20 Chinese-funded banks, 9 foreign-funded banks, 3 insurance companies, and 2 finance companies attended the briefing. The briefing pointed out that in 2011 the foreign exchange authorities conscientiously implemented the decisions and arrangements of the CPC Central Committee and the State Council, firmly focused on the key channels for cross-border capital flows, i.e., financial institutions, specifically carried out multiple special inspections of foreign exchange businesses, rigorously cracked down on activities in violation of the foreign exchange laws and regulations, and guarded against the risks of unusual flows of foreign exchange funds. According to the results of the inspections, in terms of foreign exchange business, in general compliance was improving; however, there were still some financial institutions that emphasized business expansion but made light of lawful operations and carried out some irregular activities. The briefing circulated information on the irregular activities in the foreign exchange business of financial institutions, mainly including that some banks, in handling business of behalf of clients, failed to carry out their responsibility of conducting examinations of the authenticity of the business, handled foreign exchange settlement of capital and individual foreign exchange settlement and sales in violation of the regulations on foreign exchange administration, violated the provisions on the administration of foreign exchange accounts and external guarantees, and failed to handle the receipts and payments of funds under the current account and the capital account in accordance with the applicable provisions; that some banks, upon handling their own foreign exchange business, violated the provisions on foreign exchange administration in such areas as external debt, the synthetic positions concerning foreign exchange settlement and sales, market access and the filing of the foreign exchange business, and gold lending; that some non-bank financial institutions violated the provisions on foreign exchange administration in such areas as external debt, foreign exchange settlement and sales, external guarantees, foreign exchange accounts, and market access to foreign exchange business. In addition, there are some banks that maintained high foreign exchange loan-to-deposit ratios, whose off-balance sheet business innovations evaded supervision and whose domestic and overseas business, were coordinated to engage in arbitrage. The briefing mandating that financial institutions enhance macro awareness and awareness of the overall situation , conscientiously establish the idea of sound operations and scientific development, correctly deal with the relationship between self-interest and national interest, between short-term interest and long-term interest, between business development and lawful operations, and between internal management and external supervision, actively assume their social responsibilities, and strictly comply with the foreign exchange administration policies. The briefing stressed that in 2012 the foreign exchange authorities will, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, continue to earnestly perform their supervisory responsibilities, maintain the risk limits, further expand the scope of inspections of financial institutions, increase the frequency of the inspections, increase efforts to disclose information on irregular activities, guard against the risks of unusual flows of foreign exchange funds, and effectively safeguard the economic and financial security of China. 2012-05-15/en/2012/0515/1046.html
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In 2011, in the face of the complicated economic and financial situations both at home and abroad, the State Administration of Foreign Exchange (SAFE) actively implemented the decisions and arrangements of the CPC Central Committee and the State Council, emphasizing priorities, improving methods, and rigorously cracking down on cross-border flows of hot money. In 2011 the results of the phase of cracking down on hot money were achieved, with a total of 3,488 cases of activities in violation of the regulations on foreign exchange administration handled and investigated, with the amount of penalties and confiscations reaching RMB 503 million, more than twice the amount of the last year. In 2011 the SAFE’s main tasks in cracking down on hot money included: First, striking a heavy blow, investigating, and handling major cases of activities in violation of the laws on foreign exchange administration in key areas. In 2011, seventeen major typical case involving a huge amount of money were investigated and punished; and cross-regional operations and irregular capital inflows to the real estate and financial markets, involving RMB 19.3 billion, and administrative penalties were imposed in eight such cases and fines were collected in the amount of RMB 187 million. Second, jointly handling and investigating the cases, rigorously cracking down on illegal and criminal activities with respect to foreign exchange, such as illegal banks. As of the end of November 2011, the SAFE and the public security departments had jointly exposed eighteen cases involving illegal banks, twenty cases involving the illegal sale and purchase of foreign exchange, and one case involving online foreign exchange speculation in the amount of RMB 71.7 billion, with 198 suspects caught red-handed and64 suspects thereof being prosecuted. The number of cases exposed and the number of suspects apprehended hit a record high. Third, emphasizing priorities. The SAFE, with a focus on financial institutions and large-scale enterprises, carried out special inspections in the areas of foreign exchange settlement of capital and short-term external debt, and rigorously punished enterprises, financial institutions, and individuals that borrowed external debt and carried out foreign exchange settlement in violation of the regulations on foreign exchange administration. In 2012 the SAFE will abide by the risk limits, construct a system and mechanism for protection against the impact of cross-border capital flows, strictly implement law-based administration, further improve the methods and means of foreign exchange inspections, rigorously crack down on various activities in violation of the foreign exchange laws and regulations, guard against the risks of unusual flows of foreign exchange funds, and safeguard the economic and financial security of China. 2012-03-26/en/2012/0326/1036.html