-
The State Administration of Foreign Exchange (SAFE) has recently disseminated China's external debt data as at the end of December 2018. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on China’s recent external debt situations. Q: Could you brief us on China's external debt for the year of 2018? A: China’s external debt continued to increase in 2018, while the overall growth rate slowed down. As at the end of December, the full-scale outstanding external debt (including domestic and foreign currencies) hit USD 1.9652 trillion, representing an increase of USD 207.3 billion from the end of 2017, up by 12%. In the four quarters of 2018, the quarter-on-quarter change of China’s external debt was 7.5%, 1.5%, 2.7% and -0.2% respectively. Specifically, the first quarter registered the fastest growth, while the second and third quarters witnessed obvious slowdown of growth rate. The structure of external debt has continued to improve. With respect to currency structure, the external debt in domestic currency increased by 16% year on year, which is higher than the 10% increase in foreign currency external debt. In terms of term structure, the medium- and long-term external debt increased by 13% year on year, slightly faster than that of short-term debts, which posted an 11% growth rate. As regards debt instruments, it is mainly attributed to increase of debt securities, currency and deposits, as well as trade credit and advance payment, which contributed to 44%, 23% and 20% respectively to the increase of external debt. Q: How shall we view the external debt risks facing China now? A: China’s national economic operation in 2018 was generally stable. The SAFE has deepened foreign exchange administration reform on an ongoing basis, steadily promoted the opening-up of the financial market, therefore the demand of overseas investors for allocating domestic RMB bonds has continued to rise, and the structure of debt instruments has become more stable. At the end of 2018, the outstanding debt securities accounted for 22% of the full-scale outstanding external debt, up by 2.6 percentage points from the end of 2017. The external debt risks facing China are controllable on the whole. As at the end of 2018, the external debt/GDP ratio, or the ratio of outstanding external debt to GDP was 14.4%; the debt ratio, or the ratio of outstanding external debt to export income from trade in goods and services was 74.1%; the debt servicing ratio, or the ratio of payments of principal and interest on external debt in the middle and long term and payments of interest on external debt in the short term to export income from trade in goods and services, was 5.5%, and the ratio of short-term external debt to foreign exchange reserves was 41.4%. All of the above indicators are within the internationally accepted safe range. In the future, the SAFE will further refine the two-pronged administration framework featuring macro-prudential and micro-regulatory approaches for cross-border capital flow, keep a keen eye on the changes in external debt situations, and strengthen the prevention of external debt risks while persisting in serving the real economy with foreign exchange administration, so as to safeguard China's economic and financial security. 2019-03-29/en/2019/0404/1501.html
-
Q: The latest data on foreign exchange reserves disseminated by the State Administration of Foreign Exchange (SAFE) show that China's foreign exchange reserves as of the end of March 2019 rose by USD 8.6 billion month on month. Could you brief us on the causes of such changes? What will be the future trends of foreign exchange reserves? A: As at the end of March 2019, China posted USD 3.0988 trillion in foreign exchange reserves, up by USD 8.6 billion or 0.3% month on month. In March, under the impact of China-US economic and trade negotiations, expected monetary policy adjustment of European and US central banks as well as the uncertainty of Brexit of the UK, the US dollar index rose slightly. However, the prices of financial assets also rose. Due to the combined impact of exchange rate translation and changes in asset prices etc., China’s foreign exchange reserves increased modestly. Since the beginning of this year, despite the imbalance of external environment and a number of uncertainties, China’s economy has sustained the development trend of overall stable growth while ensuring progress, and the future prospects tend to be positive. China's foreign exchange market is running more smoothly and the cross-border capital flow through major channels has been further improved, which provides a solid foundation for the stability of the foreign exchange reserves. Looking forward, the global political and economic situations will be complex with rising uncertainties. Economic growth will be confronted with downward pressure, prices of financial assets will remain high, and the international financial market is expected to become more volatile. However, China's economy will operate within a reasonable range. As the flexibility of RMB exchange rate increases, the function of exchange rate as "automatic stabilizer" will gradually become evident, which is generally conducive to maintaining the stability of China's foreign exchange reserves. 2019-04-07/en/2019/0412/1503.html
-
As the world economy recovered slowly and economic and trade globalization were faced with tough challenges, General Secretary Xi Jinping proposed in 2013 the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road. The Belt and Road Initiative, integrating China's development with those of the countries along the routes, and Chinese dream with the best wishes of the peoples of the countries alongside, is set to become a great undertaking that enhances the wellbeing of the peoples across the world. While following the gist of the key speeches by General Secretary Xi Jinping on the Initiative, and adhering to the general work guideline of making progress while maintaining stability, the State Administration of Foreign Exchange (SAFE), as an important foreign-related economic management department, has conformed to the development philosophy of innovation, coordination, greenness, opening and sharing to build a new pattern of opening up that features mutual benefit, openness and transparency, equality and inclusiveness. It also has been committed to deepening the system reform for foreign exchange administration, enhancing trade and investment facilitation, and leveraging resources on the domestic and foreign markets, in a bid to create a benign, healthy and stable environment for the Initiative. Shaping New Patterns for the Connectivity between China and the Rest of the World under the Belt and Road Initiative Since the outburst of the global financial crisis in 2008, the world's economic and financial patterns have undergone complex and profound changes. For lack of dynamics for growth, the world economy has recovered slowly and in a divergent way. The global economic governance has fallen behind and could hardly adapt to the new changes in the world economy, while the global investment and trade patterns and multilateral investment and trade rules are to go through remarkable adjustments. As the global development is imbalanced, and trade protectionism, anti-globalization and populism rise, countries are faced with complex and tough challenges in the course of their development. How to make the world economy more vibrant, inclusive and sustainable? How to unleash more positive effect of economic globalization? Under such circumstances, China proposed the Belt and Road Initiative. In the spirit of open regional cooperation, the Initiative is designed to safeguard the global systems for free trade and the open world economy to rebalance the economic globalization. While serving the fundamental interests of the international community, and being aligned with China's basic national strategy of reform and opening up, the Initiative is favorable for China to build a new pattern of all-round opening up and deepen the linkage between China and the rest of the world to allow China to be further integrated into the world economic system. First, favorable for rebalancing the world economy. China has not only benefited from economic globalization but also contributed to it. The China-proposed Belt and Road Initiative is in line with the common demand of the countries along the routes, and opens a new opportunity window for these countries to complement each other and open up, which will be favorable for China and these countries to achieve common development and for further balancing the global economic development. In August 2016, General Secretary Xi Jinping stressed at the seminar on pressing ahead with the Belt and Road Initiative that strengthening cross-border connectivity, enhancing trade and investment cooperation and boosting global production capacity and equipment manufacturing cooperation by capitalizing on the opportunities the Initiative presents are in nature to generate new demands by increasing effective supplies so as to rebalance the world economy. In particular, in the face of the sluggish world economy, exporting the huge production capacities and construction capabilities developed in the pro cycle to meet the pressing needs of the countries along the Belt and Road for advancing industrialization and modernization and enhancing the level of infrastructure will be conducive to stabilizing the world economic conditions. Over the past three years, Chinese enterprises have invested more than USD 50 billion in these countries, with myriads of key projects implemented, thus driving the economic development of the countries and creating many job opportunities for them. Originating in China, the Initiative has delivered benefits well beyond its borders. Second, favorable for enhancing China's impact on the world economy. The Initiative, which embodies China's national strategy of opening up to seek mutual benefit, charts the new course for China's opening up and will become the new growth point of China's economy. Jointly building the Silk Road Economic Belt will be favorable for consolidating the basis for cooperation between China and Central and Southeast Asia, shaping the road towards common development of China and the countries along the Belt and Road, promoting the opening up of inland and border regions, and improving the development and competitiveness of the central and western regions of China while boosting the transformation, upgrading and outbound investments of East China to create a new landscape for joint development, drive the implementation of the supply-side structural reform and achieve the Chinese dream of great national rejuvenation. Over the past three years, over 100 countries and international organizations have given warm responses and support to the Initiative. More than 40 countries and international organizations have signed cooperation agreements with China, and our circle of friends along the Belt and Road is growing bigger. Third, providing good opportunities for cross-border capital flows. Cross-border capital flows, the natural products of economic globalization, help boost the effective allocation of capital around the world and drive the proliferation and flows of advanced technologies and management experience to promote global economic growth. Jointly building the Belt and Road is designed to promote orderly and free flows of economic factors, highly efficient allocation of resources and deep integration of markets, which will be favorable for boosting the two-way liberalization of China's financial market, enhancing cross-border trade and investment facilitation, driving convertibility of the capital account and pressing ahead with RMB internationalization. While supporting Chinese enterprises to go global, the Initiative attracts long-term foreign capital to flow in to create the healthy, benign and stable order of cross-border capital flows and to ensure China's balance of payments is basically balanced and robust. Creating Favorable Policy Environment for the Belt and Road Initiative through Foreign Exchange Administration Reform By following the gist of a series of General Secretary Xi Jinping's speeches, foreign exchange authorities have been committed to ensuring opening and cooperation, harmony and inclusiveness, market operation and mutual benefit in accordance with the Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, with focus on policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds. To create a favorable policy environment for the Initiative, we will adhere to two basic principles for foreign exchange administration: First, we will persevere in reform and opening up to support and boost two-way liberalization of the financial market, further enhance cross-border trade and investment facilitation and serve the real economy. We will support capable enterprises that meet relevant conditions to carry out authentic outbound investing activities in compliance with regulations to better serve the Initiative. Second, we will be on guard against risks arising from cross-border capital flows and the impact from the disorderly flows of cross-border capital on the macro economy and financial stability, so as to maintain the stability of the foreign exchange market, create a sound market environment for reform and opening up and the Initiative, and promote joint growth and common prosperity of other countries. Promoting Sound Economic and Trade Cooperation to Ensure the Smoothness of the Belt and Road Initiative Trade and investment cooperation is a key part of the Initiative. General Secretary Xi Jinping said in his keynote speech at the opening ceremony of the 2017 annual meeting of the World Economic Forum that we must persevere in supporting free trade and investment worldwide and boosting trade and investment liberalization and facilitation while opening up, and guarding against protectionism. In recent years, foreign exchange authorities have been committed to enhancing trade and investment facilitation, removing investment and trade barriers, deepening linkage between trade and investing activities, expanding the scope of trade and investment, optimizing trade and investment structure, exploring new growth points for trade and investment, promoting the balanced development of cross-border trade and investment, and creating sound business environment inside and outside the region to unleash cooperation potential and expand and improve cooperation with the rest of the world. First, implementing the foreign exchange administration system reform for trade in goods in all respects. Trade development is a key part of the Initiative, with trade in goods being the top priority. In 1996, China accomplished convertibility of the current account. In recent years, the verification on a transaction-by-transaction basis of foreign exchange receipts and payments under trade in goods has been cancelled to allow banks to review electronic documents for eligible enterprises and allow class-A enterprises' foreign exchange receipts under trade to be transferred directly into the foreign exchange account under the current account. Efforts have been made to enhance the facilitation of foreign exchange receipts and payments under trade in goods, and consolidate and expand traditional trade to serve the Initiative. Second, deepening the foreign exchange administration reform for trade in services. Efforts have also been made to build and refine the systems in favor of trade in services, cancel prior approval for trade in services, and hand down foreign trade receipts and payments under trade in services to banks, with documents significantly simplified. The reform has effectively reduced the operating costs for enterprises, which is favorable for developing modern trade in services, and optimizing trade structure, thereby vigorously supporting the Initiative. Third, promoting diversified foreign trade development. The SAFE will continue to enhance facilitation of border trade and individual trade, cancel administrative permission for border trade accounts, accelerate turnover of capital and simplify document requirements for individual trade to expand trading under the Initiative. Fourth, supporting the development of new formats. The SAFE has been active in supporting the development of cross-border e-commerce comprehensive pilot zones and expanding the zones to cover 12 cities including Tianjin. In 2015, the pilot program for cross-border e-commerce payments business was rolled out nationwide. Since then, 33 pilot payment institutions across the country have registered an accumulated USD 24.6 billion in cross-border receipts and payments, and supported the development of cross-border e-commerce such as the Internet+, which is favorable for innovating the way of trading and developing new business formats such as cross-border e-commerce to explore the new growth points for trading under the Initiative. Fifth, actively supporting Chinese enterprises to go global. Direct investment is a key channel for Chinese enterprises going global to support the joint building of the Belt and Road. In recent years, foreign exchange administration for direct investments has been significantly simplified and basically convertible and enterprises have remarkably picked up speed to go global. The statistics from the Ministry of Commerce show the ODI from non-financial Chinese enterprises was USD 170.1 billion in 2016, up by 40% year on year. The rapid increase in China's ODI shows the enhanced comprehensive national strength, the higher level of opening up, and the steady advancement of the Initiative, the global production capacity cooperation and administration streamlining and power delegation, which is conducive to boosting China's economic transformation, and promoting economic growth in the globe and the host countries to accomplish mutual benefit and common development of China and the countries along the Belt and Road. At the same time, countries will be faced with various risks in building the Belt and Road, such as country risk, market risk, legal risk and labor risk. As a foreign-related economic administration department, the SAFE has always encouraged enterprises to participate in international economic competition and cooperation, and in joint building and production capacity cooperation under the Initiative to promote the transformation and upgrading of the domestic economy and deepen mutual benefit and cooperation between China and the countries along the Belt and Road. By following the outbound investment management principle that "under the guidance of the government, enterprises will play a dominant role based on market orientation and international practices", the SAFE supports capable Chinese enterprises that meet relevant conditions to make authentic outbound investments in compliance with regulations. Deepening Financial Integration to Expand New Channels for the Belt and Road Initiative The Belt and Road Initiative champions wide-ranging, multi-dimensional, and multi-level connectivity, and financial connectivity is a strong support for the Initiative. General Secretary Xi Jinping emphasized at the 2015 Boao Forum for Asia that the Belt and Road should be jointly built through consultation to meet the interests of all, and integrate development strategies and complement each other's advantages. In recent years, the SAFE has been dedicated to expanding the funding channels for enterprises, innovating the ways of financing, and driving enterprises to go global with capital that has gone global. The SAFE has participated in the Initiative and international production capacity and equipment cooperation by making use of China's capital and experience, as well as its advantages in high-end technology and equipment. At the same time, the SAFE has brought in advanced international technology to achieve integration, cooperation and mutual benefit in terms of technology, management, culture and markets with relevant countries. As at the end of 2016, China's banking industry registered USD 147.6 billion in assets in the countries along the Belt and Road, up by 12% year on year. First, new breakthroughs have been achieved in the two-way opening of portfolio investment. Portfolio investment is a key area for the connectivity of asset allocation. In recent years, the SAFE has harnessed the opportunities from the equilibrium of foreign exchange to refine the systems for qualified foreign institutional investors (QFII) and qualified domestic institutional investors (QDII) in the logic of "balanced regulation and two-way flows" and launched the system for RMB qualified foreign institutional investors (RQFII). It implemented the foreign exchange administration reform for QFIIs and expanded the pilot program for RQFIIs, and simplified the approval procedures for QFIIs and RQFIIs. Moreover, it loosened the upper limit for investments by a single institution, facilitated inward and outward remittances, and eased the restriction of the lockup period, thereby further boosting the opening up of China's capital market. By the end of December 2016, 278 QFIIs obtained the quota of USD 87.309 billion, and 177 RQFIIs obtained the quota of RMB 528.475 billion. Second, the macro-prudential management policy for full-scale cross-border financing has been adopted nationwide. External debt is the key channel for expanding domestic market participants' support for the sources of financing for the Initiative. In recent years, the SAFE has canceled prior approval for external debt and overseas guarantee. In 2016, while summarizing the experience gained from the pilot program for macro-prudential management of external debt, the SAFE rolled out nationwide the macro-prudential management policy for full-scale cross-border financing and innovated the way of supporting investment and financing, in a bid to reduce the difficulties and the cost of financing for enterprises going global. In 2016, Chinese enterprises, including non-banking Chinese financial institutions, registered a contracted amount of USD 102.1 billion for external debt, 2.3 times that of 2015. Third, China's bond market has been further opened up. The SAFE facilitates the issuance of panda bonds by foreign institutions in the Chinese market, allows foreign institutional investors to invest in the domestic inter-bank bond market without imposing limit on a single institution or a total limit, and allows foreign institutional investors who have invested in China's bond market to participate in the foreign exchange derivatives markets both at home and aboard based on real demand to satisfy foreign institutional investors' demand for risk aversion. As of the end of April 2017, there were 48 foreign exchange settlement agencies. Driving enterprises to go global with capital that has gone global is favorable for expanding capital sources for the Initiative to support facilities connectivity. As at the end of 2016, in China's interbank bond market, panda bonds of RMB 63.1 billion had been issued and involved more than 400 foreign investors, with the balance of investment nearing RMB 800 billion. Optimizing Use of Foreign Exchange Reserves to Open New Windows for the Belt and Road Initiative Capital going global plays a fundamental role in the Initiative. As a national strategy-oriented administrative institution for foreign exchange reserves, the SAFE has been committed to improving operation and management of foreign exchange reserves, strengthening coordination and risk control for diversified use of foreign exchange reserves, actively supporting significant strategies such as the Belt and Road Initiative and international production capacity and equipment manufacturing cooperation so as to build a system of external investment and financing platforms that are complementary and cooperative to each other. First, building capital platforms for the Initiative. The SAFE has been dedicated to expanding diversified use of foreign exchange reserves and taken a multi-level approach to support the Initiative through equity, debt and funds. In addition to entrusted loans, the SAFE took the lead to establish the Silk Road Fund and China-Africa Production Capacity Cooperation Fund. The Silk Road Fund boasts a total investment of USD 40 billion, with the first installment of USD 10 billion, while the latter has a total investment of USD 10 billion. Moreover, the SAFE has invested in CIC International, CNIC Corporation, China Development Bank and the Export-Import Bank of China and supported bilateral and multilateral funds in various ways such as China-Africa Development Fund, China-Eurasian Economic Cooperation Fund and China-Arab Investment Funds. Since their inception, these establishments have made explorations in functional positioning, investment concept, business practice and corporate governance and delivered a wealth of initial outcomes. Second, serving national strategies based on market orientation. Through commercial operation, the SAFE focuses on supporting projects under the Belt and Road Initiative such as infrastructure, resource development, industrial cooperation and financial cooperation so as to achieve mid and long-term financial sustainability and good returns on investment. It also has been committed to providing investment and financing support to the economic and trade cooperation between China and relevant countries and regions, and to bilateral and multilateral connectivity. Third, performing an investor's roles and responsibilities. The SAFE endeavors to guide investment institutions to conduct standardized and professional management in terms of corporate governance and the leadership of CPC. The SAFE strengthens the leadership of CPC and improves the systems and mechanism for CPC building, and makes full use of CPC's core role in corporate governance. The SAFE also devotes itself to improving corporate governance, and refining the incentive and constraint mechanisms, achieving significant progress in business expansion, company building, risk control and internal systems. Making Progress while Maintaining Stability in Foreign Exchange Administration to Further Support the Belt and Road Initiative The advancement of the Belt and Road Initiative will play a key role in creating the new pattern of comprehensive opening up, expanding China's development space, and safeguarding security and stability of neighboring countries and regions, and also creates significant opportunities for China and relevant countries to press ahead with connectivity, cooperation and common development. While adhering to the general work guideline of making progress while maintaining stability, foreign exchange authorities will continue to follow the relevant plans of the CPC Central Committee and the State Council to advance reform and opening up, build a new pattern of opening up for common development, inject new life into joint development, so as to systematically, effectively and forcefully advance the Initiative, play a due role of the facilitator, server and safeguard for the Initiative, and lend much momentum to an open world economy, so that the Initiative could better benefit different peoples. To this end, five aspects shall be ensured as follows: First, the Initiative follows market orientation. An open window will not be closed again. The SAFE shall continue to enhance trade and investment facilitation, and expand trade and investment areas, to improve the efficiency and quality of market participants in using domestic and international markets and resources. The SAFE shall also deepen the investment and financing linkage system and further study and implement the mutual benefit policies. It shall welcome foreign enterprises to invest in China and encourage domestic enterprises to participate in the infrastructure building and industrial investment in the countries along the Belt and Road, to promote connectivity under the Initiative. Second, the Initiative is open for cooperation. Efforts shall be made to further open up and facilitate domestic capital market, bond market and foreign exchange market. To achieve the current objective of balancing the supply-demand relationship of the foreign exchange market, and the long-term goal of boosting the opening up of the financial market, the SAFE shall boost the capital account convertibility in a prudential and systematic way. The SAFE shall also work to expand the liberalization of the bond market and facilitate foreign institution's entry into China's bond market to issue and invest in bonds and expand the funding sources for the Initiative. Efforts shall be made to refine the exchange rate formation mechanism, enhance exchange rate elasticity, enrich risk hedging tools in the foreign exchange market and build more friendly and convenient system environment to satisfy the needs of foreign investors for managing exchange rate risks. Third, the Initiative is balanced and robust to make good use of the intangible hand and the tangible hand. With the market laws and international rules under the Initiative observed, efforts shall be made to make full use of the market's decisive role in resource allocation and the roles of enterprises and the government to build a system for macro-prudential management of cross-border capital flows and micro market regulation to prevent the risks arising from unusual cross-border capital flows and build a healthy, stable, and benign order in the foreign exchange market for the Initiative. Fourth, the Initiative seeks mutual benefit to optimize the use of foreign exchange reserves. Under the philosophy of commercial operation, mutual benefit, openness and inclusiveness, the SAFE shall attempt new measures for diversified use while showing respect for the international economic and financial rules to invest in infrastructure, resource development, industrial cooperation, and financial cooperation under the Initiative, through a variety of financing and investment vehicles, especially equity investments to promote common development and prosperity of China and the countries along the Belt and Road. Fifth, policies are integrated to strengthen coordination and cooperation. The SAFE shall boost the policy communication with the countries and regions along the Belt and Road, strengthen connectivity and cross-border cooperation of market infrastructure, and enhance communication and exchanges with foreign investors to make the foreign exchange market more transparent. (The original text is available in the ninth issue of China Finance for 2017) 2017-05-05/en/2017/0505/1263.html
-
The national foreign exchange administration work conference has been recently held in Beijing. By following the spirit of 18th CPC National Congress, the Third, Fourth, Fifth and Sixth Plenums of the 18th CPC Central Committee, and the Central Economic Work Conference, the conference reviewed foreign exchange administration in 2016, deeply analyzed the current state of the economy, finance and balance of payments, and discussed and made plans for foreign exchange administration for 2017. Pan Gongsheng, administrator and secretary of the Party Leadership Group of the State Administration of Foreign Exchange (SAFE), delivered a work report at the conference, with deputy administrators, and heads of the SAFE branches (including foreign exchange administration departments), and departments of the SAFE present. The meeting pointed out that, by following the work plans of the CPC Central Committee and the State Council, and the guidance of the CPC Committee of the People's Bank of China, foreign exchange authorities stuck to problem orientation and bottom-line thinking, coordinated the relationship between promoting trade and investment facilitation and guarding against cross-border capital flow risks, and deepened the reform of "delegation, centralization and services" in 2016. To be specific, foreign exchange authorities rolled out nationwide the macro-prudential management policy for full-scale cross-border financing, further liberalized interbank bond markets, and carried out the QFII foreign exchange administration reforms. Under the existing policy framework, foreign exchange authorities strengthened management and execution, worked with other departments for joint regulation, intensified authenticity and compliance reviews, and cracked down on foreign exchange irregularities, in a bid to safeguard the stability of foreign exchange markets. Foreign exchange authorities also enhanced operation and management of foreign exchange reserves, and improved diversified utilization of foreign exchange reserves to safeguard the equilibrium of balance of payments and the national economic and financial security. The meeting emphasized that the year 2017 is key to the implementation of the 13th Five-year Plan and to the deepening of the supply-side structural reform. In the year, foreign exchange authorities are required to implement the spirit of the Central Economic Work Conference and the work plans of the CPC Central Committee and the State Council, adhere to the general work guideline of making progress while maintaining stability and follow the guidance of the CPC Committee of the People's Bank of China to take bold steps to effectively enhance trade and investment facilitation, serve the development of the real economy, intensify authenticity and compliance reviews, and crack down on foreign exchange irregularities, and guard against risks arising from cross-border capital flows, so as to embrace the 19th CPC National Congress with excellent performance. The meeting made plans for the priorities of foreign exchange administration for 2017: first, continue to press ahead with administration streamlining and power delegation and reform in key areas, and further boost trade and investment facilitation to support the development of the real economy. Second, enhance authenticity and compliance reviews, intensify inspections and punishment with regard to foreign exchange irregularities, and maintain a tough stance on crimes such as underground banks and evasion and cheated purchases of foreign exchange, in a bid to safeguard the health and stability of foreign exchange markets. Third, strengthen ongoing and ex-post management, enhance the level of offsite monitoring, analysis and early warning in relation to cross-border capital flows, and refine the management framework for macro-prudential cross-border capital flows. Fourth, improve the operation and management of foreign exchange reserves, to safeguard the security, flows, value growth and maintenance of foreign exchange reserves. Fifth, implement the requirements for strengthening the Party's self-discipline, and continue to step up efforts to build the CPC, clean up undesirable work styles and uphold integrity, and enhance teambuilding and internal management. 2017-01-06/en/2017/0106/1241.html
-
In 2016, the State Administration of Foreign Exchange (SAFE) received and processed 39 proposals and motions from the delegates to the NPC and the members of the CPPCC, which covered supporting enterprise going global, boosting RMB internationalization, providing financial support for the Belt and Road Initiative, RMB capital account convertibility and supporting the development of pilot FTZ. The SAFE attached great importance to the processing efforts, arranged relevant work, and made great efforts to carry out the related tasks. As a result, the processing of the relevant proposals and motions for 2016 was completed successfully, which can be attributable to the following aspects: first, close attention from the leadership and thoughtful arrangements. With the significance of the proposals and motions processing stressed by the SAFE's Party Leadership Group, the leaders in charge of this processing effort convened a special meeting to make arrangements and raise requirements for the processing. Second, improved systems and standardized processing. A special measure has been developed to make sure the processing is institutionalized and standardized. Third, good coordination and communication to enhance the processing level. The SAFE took various measures to communicate with the delegates and further listened to their opinions and suggestions to ensure the quality of the processing. Fourth, strengthened training and rigorous overseeing. Training was provided for the persons processing the proposals and motions and supervision was improved to make sure every proposal and motion was replied and every inquiry got response. After the completion of the processing, a wrap-up meeting was held to identify and summarize the experience gained and good practices in this processing effort. 2017 is a year of great importance in the 13th Five-year Plan period and a year when the supply-side structural reform will go deeper. The SAFE shall make the processing of proposals and motions from the 2017 NPC and CPPCC testimony to the implementation of the gist of the 18th CPC National Congress, the Third, Fourth, Fifth and Sixth Plenums of the 18th CPC Central Committee and the Central Economic Work Conference, and continue to improve its work styles and work hard to do well in the processing of the proposals and motions from the 2017 NPC and CPPCC, and embrace the 19th CPC National Congress with real actions. 2017-02-27/en/2017/0227/1250.html
-
On December 21, 2016, Pan Gongsheng, Administrator of the State Administration of Foreign Exchange (SAFE), met with a delegation from China Banking Association Foreign Bank Working Committee in Beijing. A seminar was held with 15 foreign bank delegates. They exchanged ideas on the conditions of foreign exchange markets, regulation of foreign exchange markets, and banks' compliance and self-discipline. According to Administrator Pan Gongsheng, building healthy and orderly foreign exchange markets is the common pursuit of market players. Currently, the cross-border capital flow risk is within control and there are long-term fundamental factors that support the stability of foreign exchange markets. Adhering to the general work guideline of making progress while maintaining stability, foreign exchange authorities have been committed to achieving short-term targets through balancing foreign exchange receipts and payments, and guarding against cross-border capital flow risks, and also to making long-term achievements in boosting the liberalization of financial markets, by balancing facilitation and risk mitigation, strengthening regulation of foreign exchange markets and cracking down on foreign exchange irregularities. Commercial banks are required to follow the business principles and intensify authenticity and compliance reviews in handling foreign exchange business. They should perform their social responsibilities and promote the reform measures with regard to foreign exchange administration. They also should guide market players to rationally use the funds and immediately report problems once they are spotted, so as to jointly safeguard the stability of foreign exchange markets. 2016-12-22/en/2016/1222/1238.html
-
On January 23, 2017, Pan Gongsheng, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange (SAFE) met with a delegation headed by Mr. Joerg Wuttke, president of the European Union Chamber of Commerce in China (EUCCC) in Beijing. The two sides exchanged ideas on the outlook for China's economic development, its cross-border capital flows and foreign exchange administration policies. According to Pan Gongsheng, China has sustained stable and healthy economic development. It was in the vanguard of the world for its GDP year-on-year growth of 6.7% in 2016, boasting fundamental factors in place that will support the equilibrium of the balance of payments in a long period to come. China has been committed to building a loose and orderly investment environment, in a bid to make its markets more transparent and standardized. Foreign exchange authorities will focus on ensuring the continuity and consistency of its foreign exchange administration policies. They will work to enhance trade and investment facilitation, ensure foreign-funded enterprises are not constrained in normal outward remittances of their profits, and support capable enterprises that meet certain conditions to engage in authentic ODI in compliance with regulations. Meanwhile, the authorities will make great efforts to intensify the authenticity and compliance reviews, with focus on preventing cross-border capital flow risks and safeguarding the health and stability of the foreign exchange markets. 2017-01-24/en/2017/0124/1245.html
-
On December 20, 2016, Pan Gongsheng, Administrator of the State Administration of Foreign Exchange (SAFE), met with a delegation from the Hong Kong Association of Banks (HKAB) headed by Mr. Norman Chan, Chief Executive of the Hong Kong Monetary Authority (HKMA) and Ms. Chen Xiumei, Chairperson of the HKAB. The two sides exchanged ideas on issues of both concern such as foreign exchange situation, and foreign exchange administration policies. According to Administrator Pan Gongsheng, the cross-border capital flow risk is within control at the moment, and there are long-term fundamental factors that support the equilibrium of the balance of payments. The SAFE will be committed to trade and investment facilitation under the existing policy framework. What's more, the SAFE will also guard against cross-border capital flow risks, intensify regulation of foreign exchange markets, and crack down on foreign exchange irregularities, in a bid to sustain the health and stability of foreign exchange markets. 2016-12-20/en/2016/1220/1237.html
-
To ramp up the administrative approval efficiency and improve law-based administration with regard to foreign exchange administration, so that the transparency of law-based administration could be ensured, the State Administration of Foreign Exchange (SAFE) has recently published the Statistical Table on Intermediary Services Involved in Administrative Approval and Entrusted to Relevant Institutions by Administrative Counterparts (Statistical Table). By making known the intermediary services, the SAFE aims to facilitate the general public's inquiries and understanding. The Statistical Table's highlights include 6 intermediary service items required in 3 administrative approval items under the capital account, such as financial audit report, capital verification report and power of attorney. This is another key move the SAFE has taken in recent years to implement the State Council's requirements on administration streamlining, power delegation and strengthening services to boost law-based administration and information transparency. For the details of the Statistical Table, please visit the SAFE's official website at "online services - administrative approval - administrative approval items". 2016-12-23/en/2016/1223/1239.html
-
On December 31, 2016, Zhou Xiaochuan, secretary of the CPC Committee and governor of the People's Bank of China (PBC) visited the SAFE Investment Center to show his care for the frontline officials for yearend final accounts, who are committed to the operations and management of foreign exchange reserves, and sent through them his greetings to the workforce of the SAFE and their families. Accompanying him were Pan Gongsheng, member of the CPC Committee and deputy governor of the PBC, and administrator of the SAFE, and Yin Yong, member of the CPC Committee and deputy governor of the PBC, and director of the Investment Center of the SAFE. On behalf of the CPC Committee of the PBC, Zhou reaffirmed the achievements obtained in the operations and management of foreign exchange reserves. According to him, the year 2016 is the first year of the 13th Five-year Plan period, a year crucial to the building of a moderately prosperous society in all respects, and also a year to make breakthroughs in pressing ahead with the structural reform. Under the leadership of the CPC Central Committee and the State Council, the staff engaged in the operations and management of foreign exchange reserves worked with one mind and one heart and forged ahead. They flexibly responded to the heightened volatilities in the global economic and financial markets, and stably advanced the operation and management efforts, ensuring the security, liquidity and value preservation and increase of assets and making new contributions to serving the national development strategy and safeguarding the economic and financial security. Zhou stressed that since the year 2017 is a year to advance the 13th Five-year Plan in all respects, the tasks of reform will become heavier and the external environment will be more complex. By following the gist of the 18th CPC National Congress, and the Third, Fourth, Fifth and Sixth Plenums of the 18th CPC Central Committee, and the Central Economic Work Conference, the talents devoted to the operations and management of foreign exchange should work hard and make breakthroughs based on the basic function that foreign exchange reserves should safeguard the balance of payments. They should also be precise and down-to-earth to ensure the smooth operations and management of foreign exchange reserves, in a bid to better serve the development of China. 2016-12-31/en/2016/1231/1240.html