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The State Administration of Foreign Exchange, the State Administration of Taxation, and the General Administration of Customs recently jointly issued an announcement in which they decided to reform the foreign exchange administration system for trade in goods and to optimize and upgrade the information-sharing mechanism for foreign exchange receipts from exports and export rebates. Entering into effect as of December 1, 2011, a pilot reform will take place in provinces (cities) such as Jiangsu , Shandong , Hubei , Zhejiang (excluding Ningbo ), Fujian (excluding Xiamen ), Dalian , and Qingdao . The reform of foreign exchange administration for trade in goods mainly includes the following: First, improving foreign exchange administration for trade in goods and preventing risks in foreign exchange receipts and payments. The foreign exchange authorities will carry out comprehensive verifications on the flows of imported and exported goods and on the flows of capital from receipts and payments from trade, will conduct classified management of enterprises based on their compliance with the provisions on foreign exchange administration, and will dynamically adjust the results of the classified management. Most enterprises will enjoy facilitation during the handling of foreign exchange receipts and payments from trade; meanwhile the foreign exchange authorities will strengthen supervision of non-compliant enterprises with respect to document examination regarding receipts and payments from trade, business type, mode of settlement, and relevant handling procedures. Second, simplifying the formalities for receipts and payments of foreign exchange from trade and the relevant handling procedures. Enterprises will not be required to handle verifications and writing-off formalities after receipts and payments of foreign exchange from trade; the documents required for enterprise compliance with foreign exchange payments for imports will be simplified significantly, and foreign exchange payments may be handled with the banks upon the strength of the import customs declaration, contract, invoice, or any other documents that can prove the authenticity of transactions. The bank documents and examination procedures for foreign exchange payments by enterprises will be simplified significantly and foreign exchange collections from exports will not be subject to online inspections. Third, simplifying the export-rebate vouchers. During the pilot period, where the export enterprises in the pilot regions apply for export rebates, they will not be required to provide a paper Export Verification Form for Foreign Exchange Collections. The tax authorities will, in accordance with the relevant provisions, examine the enterprises’ export rebates with reference to the information provided by the foreign exchange authorities on the foreign exchange receipts from exports and the classification of the enterprises. Fourth, adjusting customs declaration procedures for exports. During the pilot period, where the export enterprises in the pilot regions make customs declarations on exports, they shall still provide an Export Verification Form for Foreign Exchange Collection in accordance with the provisions in force. Upon nationwide acceptance of the reform of the foreign exchange administration system for trade in goods, the State Administration of Foreign Exchange and the General Administration of Customs will adjust the customs declaration procedures for exports and in general will cancel the Export Verification Form for Foreign Exchange Collections. Fifth, improving regulatory synergy. The State Administration of Foreign Exchange, the State Administration of Taxation, and the General Administration of Customs will further strengthen their cooperation, realize data-sharing, improve coordination mechanisms, and rigorously crack down on irregular cross-border capital flows and activities such as tax fraud and smuggling that are in violation of the relevant laws. Reforming the foreign exchange administration system for trade in goods and establishing a new administration mode combining facilitation and risk management are important measures conforming with the development and changes in the scale, mode, and participants in the country’s foreign trade and responding to the current balance of payments situation. They are an important element in the transformation of the concept and methods of foreign exchange administration. Optimizing and upgrading the information-sharing mechanism for foreign exchange receipts from exports and export rebates is beneficial to reduce social costs, improve the means of foreign exchange administration, and further enhance the level of trade facilitation. 2011-09-15/en/2011/0915/1013.html
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At the end of September 2011, China’s outstanding external debt (excluding that of Hong Kong SAR, Macao SAR, and Taiwan Province) reached USD697.164 billion. Specifically, the outstanding registered external debt was USD440.564 billion and the balance of trade credit between enterprises was USD256.6 billion. With respect to the term structure, the outstanding long- and medium-term external debt (with the remaining term) was USD189.539 billion, accounting for 27.19 percent of the outstanding external debt. The outstanding short-term external debt (with the remaining term) was USD507.625 billion, accounting for 72.81 percent of the outstanding external debt. Specifically, the outstanding registered short-term external debt (with the remaining term) was USD251.025 billion and the balance of trade credit between enterprises was USD256.6 billion. In terms of the composition of the short-term external debt, at the end of September 2011 the balance of trade-related credit was USD374.996 billion, accounting for 73.87 percent of the outstanding short-term external debt (with the remaining term). Specifically, the trade credit between enterprises and bank trade financing accounted for 50.55 percent and 23.32 percent respectively. As trade-related credit is mainly based on real import and export trade, the growth of such payments is basically consistent with that of import and export trade in China; therefore, the increase in the proportion of this short-term external debt will not affect the security of China’s external debt. In terms of types of debtors, the outstanding debt of Chinese-funded financial institutions was USD209.605 billion, accounting for 47.58 percent of the outstanding registered external debt; the outstanding debt of foreign-funded enterprises was USD132.027 billion, accounting for 29.97 percent; the outstanding debt of foreign-funded financial institutions was USD54.373 billion, accounting for 12.34 percent; the outstanding sovereign debt borrowed by ministries under the State Council was USD38.597 billion, accounting for 8.76 percent; the outstanding debt of Chinese-funded enterprises was USD5.797 billion, accounting for 1.31 percent; and the outstanding debt of other institutions was USD 165 million, accounting for 0.04 percent. In terms of types of debt, the balance of international commercial loans amounted to USD370.998 billion, accounting for 84.21 percent of the outstanding registered external debt, with the proportion rising by 4.23 percentage points compared with the end of 2010. The balance of foreign government loans and of loans granted by international financial organizations amounted to USD69.566 billion, accounting for 15.79 percent. In terms of the currency structure, debt in U.S. dollars accounted for 75.81 percent of the outstanding registered external debt, representing an increase of 5.4 percentage points compared with the end of 2010. Debt in Japanese yen accounted for 8.11 percent, representing a decline of 0.45 percentage point compared with the end of 2010. Debt in euro accounted for 7.21 percent, representing a rise of 2.8 percentage points compared with the end of 2010. Other kinds of debt, including SDRs and HKD, accounted for 8.87 percent, a decline of 7.75 percentage points compared with the end of 2010. In terms of the sectors in which the debt is invested, based on the Industrial Classifications of the National Economy, USD53.482 billion was invested in the manufacturing sector, accounting for 24.24 percent of the medium- and long-term outstanding registered external debt (based on contract terms); USD27.677 billion was invested in the transportation sector, the warehousing sector, and the postal-services sector, accounting for 12.54 percent; USD17.354 billion was invested in the production and supply of electric power, coal, gas, and water, accounting for 7.87 percent; USD8.152 billion was invested in the information technology services sector, accounting for 3.69 percent; and USD10.69 billion was invested in the real estate sector, accounting for 4.85 percent. From January to September 2011, medium- and long-term external borrowing totaled USD33.948 billion, an increase of USD6.101 billion, or 21.91 percent, on a year-on-year basis; Repayment of the principal totaled USD20.961 billion, an increase of USD3.057 billion, or 17.07, percent, on a year-on-year basis; Interest payments totaled USD1.779 billion, a year-on-year decrease of USD252 million, or 12.41 percent. Net inflows under the outstanding long- and medium-term external debt totaled USD11.208 billion, up 41.66 percent on a year-on-year basis. 2012-01-04/en/2012/0104/1020.html
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At the end of June 2011, China’s outstanding external debt (excluding that of the Hong Kong SAR, Macao SAR, and Taiwan Province) reached USD642.528 billion. Specifically, the outstanding registered external debt reached USD402.828 billion and the balance of trade credit was USD239.7 billion. With respect to the term structure, the outstanding long- and medium-term external debt (with the remaining term) was USD180.417 billion, accounting for 28.08 percent of the outstanding external debt. The outstanding short-term external debt (with the remaining term) was USD462.111 billion, accounting for 71.92 percent of the outstanding external debt. Specifically, the outstanding registered short-term external debt (with the remaining term) was USD222.411 billion and the balance of trade credit was USD239.7 billion. In terms of the composition of the short-term external debt, at the end of June 2011 the balance of trade-related credit was USD348.221 billion, accounting for 75 percent of the outstanding short-term external debt (with the remaining term). Specifically, trade credit and trade financing accounted for 52 percent and 23 percent respectively of the outstanding short-term external debt. As trade-related credit is mainly based on real import and export trade, its growth is basically consistent with that of China’s import and export trade. Therefore, the increase in the proportion of the short-term external debt will not affect the security of China’s external debt. In terms of types of debtors, the outstanding debt of Chinese-funded financial institutions was USD182.852 billion, accounting for 45.39 percent of the outstanding registered external debt; the outstanding debt of foreign-funded enterprises was USD122.379 billion, accounting for 30.38 percent; the outstanding debt of foreign-funded financial institutions was USD52.418 billion, accounting for 13.01 percent; the outstanding sovereign debt borrowed by ministries under the State Council was USD39.353 billion, accounting for 9.77 percent; the outstanding debt of Chinese-funded enterprises was USD5.679 billion, accounting for 1.41 percent; and the outstanding debt of other institutions was USD147 million, accounting for 0.04 percent. In terms of the types of debts, the balance of international commercial loans amounted to USD334.641 billion, accounting for 83.07 percent of the outstanding registered external debt, representing a 3.09-percentage-point increase compared with that at the end of 2010. The balance of foreign government loans and loans granted by international financial organizations amounted to USD68.187 billion, accounting for 16.93 percent. In terms of the currency structure, debt in U.S. dollars accounted for 78.27 percent of the outstanding registered external debt, representing an increase of 7.86 percentage points compared with that at the end of 2010. Debt in Japanese yen accounted for 7.99 percent, representing a decline of 0.57 percentage point compared with that at the end of 2010. Debt in euro accounted for 4.09 percent, representing a decline of 0.32 percentage point compared with that at the end of 2010; and other kinds of debt including SDRs and HKD accounted for 9.65 percent of the outstanding registered external debt, a decline of 6.97 percentage points compared with that at the end of 2010. In terms of industrial sectors in which the debt is invested, with reference to the Industrial Classification of the National Economy, USD50.292 billion was invested in the manufacturing sector, accounting for 23.79 percent of the medium- and long-term outstanding registered external debt (based on contract terms); USD26.496 billion was absorbed by the transportation sector, the warehousing sector, and the postal-service sector, accounting for 12.53 percent; USD17.133 billion went to the production and supply of electric power, and the coal, gas, and water sectors, accounting for 8.1 percent; USD8.13 billion was absorbed by the IT services sector, accounting for 3.85 percent; and USD10.626 billion was channeled to the real estate sector, accounting for 5.03 percent. From January to June 2011, the long- and medium-term external debt totaled USD19.579 billion, a year-on-year decrease of USD197 million, or 1 percent. Repayment of the principal was USD11.412 billion, a year-on-year decrease of USD983 million, or 7.93 percent. Payment of interest was USD1.107 billion, a year-on-year decrease of USD336 million, or 23.28 percent. 2011-09-16/en/2011/0916/1014.html
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The SAFE recently released the revised data on China’s Balance of Payments Statement for the second quarter and the first half of 2011. In Q2 of 2011 the current account and the capital and financial account continued to post a "twin surplus" and international reserves maintained a growing momentum. The surplus under the current account totaled USD59 billion. Specifically, according to the statistical coverage of the balance of payments, the surpluses in goods and current transfers reached USD66.9 billion and USD6.5 billion, respectively, whereas the deficit in trade in services and income amounted to USD11 billion and USD3.3 billion respectively. Meanwhile, China’s surplus under the capital and financial account totaled USD97.7 billion. In particular, net inflows of direct investments, portfolio investments, and other investments amounted to USD47.9 billion, USD11.1 billion, and USD37.3 billion respectively. International reserves registered an increase of USD142.5 billion (exclusive of changes in the value of non-transaction factors such as exchange rates and prices). Specifically, foreign exchange reserve assets posted an increase of USD143 billion. In the first half of 2011, China’s surplus under the current account totaled USD87.8 billion. The ratio of the surplus under the current account to GDP during the same period was 2.8 percent. Meanwhile, China’s surplus under the capital and financial account totaled USD183.9 billion. China’s international reserve assets posted an increase of USD283.7 billion. In addition, the BOP Analysis Team of the SAFE released China’s Balance of Payments Report for the first half of 2011 so as to facilitate understanding of the data and analysis of China’s balance of payments among all groups in society. 2011-09-30/en/2011/0930/1016.html
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The SAFE recently released the Preliminary Data on China’s Balance of Payments Statement for the Third Quarter of 2011. The current account and the capital and financial account posted a “twin surplus” in Q3 of 2011, and international reserves maintained their growing momentum. In Q3, the surplus under the current account totaled USD57.8 billion. Specifically, according to the statistical coverage of the balance of payments, the surpluses in goods and current transfers reached USD85.3 billion and USD6.9 billion respectively, whereas the deficit in trade in services and income amounted to USD20.2 billion and USD14.1 billion respectively. Meanwhile, China’s surplus under the capital and financial account (including net errors and omissions) totaled USD33.9 billion. In particular, net inflows of direct investments amounted to USD35.9 billion. International reserve assets posted an increase of USD91.7 billion. Specifically, transactions in foreign exchange reserve assets registered an increase of USD92.1 billion (exclusive of the influence of non-transactional changes in value such as changes in the exchange rates and prices), the reserve position in the IMF registered a decline of USD300 million, and special drawing rights registered a decline of USD100 million. In the first three quarters of 2011, China’s surplus under the current account totaled USD145.6 billion and the ratio of the surplus under the current account to GDP was 3.0 percent. Meanwhile, this year China’s surplus under the capital and financial account totaled USD229.8 billion (including net errors and omissions). China’s international reserve assets posted an increase of USD375.4 billion. 2012-01-04/en/2012/0104/1019.html
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The SAFE recently released China ’s International Investment Position as of the end of June 2011. The statistics reveal that at the end of June 2011 China’s external financial assets hit USD4615.2 billion, external financial liabilities reached USD2630.1 billion, and external net financial assets totaled USD1985.1 billion. Among the external financial assets, direct investments abroad amounted to USD329.1 billion, portfolio investments USD260.4 billion, other investments USD755.1 billion, and reserve assets USD3270.6 billion, accounting for 7 percent, 6 percent, 16 percent, and 71 percent respectively. In terms of external financial liabilities, foreign direct investments totaled USD1583.8 billion, portfolio investments USD230.9 billion, and other investments USD815.4 billion, accounting for 60 percent, 9 percent, and 31 percent of external financial liabilities respectively. The International Investment Position (hereinafter referred to as the IIP) is a statistical statement reflecting the stocks of financial assets and liabilities of one country or region to other countries or regions in the world at one specific point; together with the Balance of Payments Statement (BOP Statement) it constitutes the complete international accounts system, indicating the country’s or region’s trade flows. FILE: China's International Investment Position(2011Q2) 2011-10-19/en/2011/1019/1017.html
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According to statistical data released by the State Administration of Foreign Exchange (SAFE), in August 2011 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD144.4 billion and USD106.5 billion respectively. The surplus of foreign exchange settlement and sales by banks on behalf of clients amounted to USD37.8 billion. For the first eight months of 2011, the cumulative amount of foreign exchange settlements and foreign exchange sales by banks on behalf of clients amounted to USD1068.6 billion and USD713.9 billion respectively. The foreign exchange settlement and sales surplus was USD354.8 billion. In August 2011, foreign-related receipts and payments by domestic banks on behalf of clients amounted to USD211.9 billion and USD185.8 billion respectively, and the surplus of foreign-related receipts and payments reached USD26 billion. For the first eight months of 2011, the cumulative foreign-related receipts and payments of banks on behalf of clients amounted to USD1500.9 billion and USD1264.9 billion respectively; and the surplus of foreign-related receipts and payments reached USD236 billion. 2011-09-28/en/2011/0928/1015.html
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According to the statistical data released by the State Administration of Foreign Exchange (SAFE), in September 2011 the amount of foreign exchange settlements and sales by banks on behalf of clients amounted to USD142.6 billion and USD116.6 billion respectively. The surplus of foreign exchange settlements and sales by banks on behalf of clients amounted to USD26 billion. For the first nine months of 2011, the cumulative amount of foreign exchange settlements and sales by banks on behalf of clients amounted to USD1211.2 billion and USD830.5 billion respectively. The surplus of foreign exchange settlement and sales was USD380.7 billion. In September 2011, foreign-related receipts and payments by domestic banks on behalf of clients amounted to USD209 billion and USD197 billion respectively, and the surplus of foreign-related receipts and payments reached USD12 billion. For the first nine months 2011, the cumulative foreign-related receipts and payments of banks on behalf of clients amounted to USD1700.9 billion and USD1461.9 billion respectively; and the surplus of the cumulative foreign-related receipts and payments reached USD248 billion. 2011-10-31/en/2011/1031/1018.html
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According to statistical data released by the State Administration of Foreign Exchange (SAFE), in October 2011 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD115.2 billion and USD112.1 billion respectively. The surplus of foreign exchange settlement and sales by banks on behalf of clients amounted to USD3.2 billion. For the first ten months of 2011, the cumulative amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD1326.5 billion and USD942.6 billion respectively. The surplus of foreign exchange settlement and sales was USD383.9 billion. In October 2011, foreign-related receipts and payments of domestic banks on behalf of clients amounted to USD186.8 billion and USD175.9 billion respectively; and the surplus of foreign-related receipts and payments reached USD10.9 billion. In the first ten months 2011, the cumulative foreign-related receipts and payments of banks on behalf of clients amounted to USD1896.7 billion and USD1637.8 billion respectively; and the surplus of the cumulative foreign-related receipts and payments reached USD258.9 billion. 2012-01-04/en/2012/0104/1021.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