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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo: To further deepen the reform of foreign exchange administration system, better serve and facilitate the business and capital operations by foreign-invested enterprises, the SAFE decides to implement the reform of the administrative approach to settlement of foreign exchange capital by foreign-invested enterprises across the country, based on the experience from the preliminary pilot program conducted in some regions. To ensure the smooth implementation of such reform, the relevant issues are hereby notified as follows: I. Voluntary settlement of foreign exchange capital of foreign-invested enterprises (FIEs) Voluntary settlement of foreign exchange capital of a FIE means that foreign exchange capital in the FIE's capital account, recognized by the foreign exchange authority as the right and interest of cash contribution (or registered by the bank for accounting entry of cash contribution), can be settled in banks according to its actual business requirements. The provisional percentage for the voluntary settlement of foreign exchange capital of FIEs is 100 percent. The SAFE may adjust the aforesaid percentage in due time according to the international receipts and payments situation. During the course of implementing the voluntary settlement of foreign exchange capital, the FIEs can still choose the existing procedures for settlement upon payment for the use of foreign exchange capital. For each foreign exchange settlement for enterprises, based on the principle of foreign exchange settlement upon payment, the banks shall examine the authenticity and compliance in the use of the funds for prior transaction of foreign exchange settlement (including voluntary settlement of foreign exchange and foreign exchange settlement upon payment). Domestic transfers and cross-border outward payments of foreign exchange capital of FIEs shall be processed pursuant to the prevailing regulations on foreign exchange administration. II. RMB Funds from the Voluntary Settlement of Foreign Exchange Capital of FIEs Included in Management of Accounts for FX Settlement and Pending Payment The FIEs shall, in principle, open accounts with their banks for capital account– foreign exchange funds settled and to be paid (“accounts for FX settlement and pending payment”) for the deposits of RMB funds from the voluntary settlement of foreign exchange on a one-to-one corresponding basis, and make various payments through these accounts. The capital account, domestic asset realization account and domestic reinvestment account under the same name which are opened by a FIE with the same bank outlet may share an account for FX settlement and pending payment. The RMB funds of FIEs from foreign exchange settlement upon payment shall not be used for payments through the accounts for FX settlement and pending payment. Receipts in the FIEs' capital accounts include: foreign exchange capital remitted from overseas or capital subscribed to and contributed by foreign investors (including contributions from non-resident deposit accounts, offshore accounts, and domestic foreign exchange accounts of foreign individuals); foreign exchange capital or capital subscribed to and contributed as transferred from the special accounts for security deposits of overseas remittances; funds returned after transfers, pursuant to the regulations; funds received from the capital account under the same name; funds returned due to revocation of the transactions; received interest income; and other receipts registered by the foreign exchange authority (bank) or approved by the foreign exchange authority. The scope of the payments from the capital accounts includes: foreign exchange settlement within the business scope; transfers through the foreign exchange settlement into the accounts for FX settlement and pending payment; domestic transfers in the original currency to the special accounts for security deposits domestically transferred, capital accounts under the same name, accounts for entrusted loans, special accounts for concentrated funds management, special accounts for overseas lending, special accounts for domestic reinvestments; outward remittances owing to capital reductions or withdrawals by foreign investors; outward payments under the current account; and other payment under the capital account registered by the foreign exchange authority (bank) or approved by the foreign exchange authority. The scope of the receipts in the accounts for FX settlement and pending payment includes: funds transferred through foreign exchange settlement from capital account, domestic asset realization account and domestic reinvestment account under the same name or held by an enterprise for domestic equity investments; funds transferred from the account for FX settlement and pending payment under the same name or held by an enterprise for domestic equity investment; funds returned after transfer from these accounts, pursuant to the regulations; funds returned due to revocation of the transactions; RMB interest income; and other receipts registered by the foreign exchange authority (bank) or approved by the foreign exchange authority. The scope of payments in the accounts for FX settlement and pending payment includes: payments within the business scope, payments of funds for domestic equity investments and security deposits in RMB, funds transferred to the special account for centralized funds management and the account for FX settlement and pending payment under the same name; repayment of RMB loans after completed utilization; foreign exchange purchases and payments or direct outward repayments of foreign debts; foreign exchange purchases and payments or direct outward payments owing to capital reductions or withdrawals by foreign investors; foreign exchange purchases and payments or direct outward payments under the current account; and other payments under the capital account registered by the foreign exchange authority (bank) or approved by the foreign exchange authority. RMB funds in the accounts for FX settlement and pending payment shall not be transferred back to the capital accounts through purchase of foreign exchange. RMB funds transferred from the accounts for FX settlement and pending payment for the purpose of guarantees or payments of other security deposits, unless guarantee contract is performed or deductions occur due to default, shall be returned to the accounts for FX settlement and pending payment through the original route. III. Utilization of FIEs’ Capital according to the Principles of Authenticity and Self-use within the Business Scope FIEs' capital and RMB funds from their settlement shall not be used for the following purposes: (I) directly or indirectly used for payment beyond the business scope or prohibited under the laws and regulations of the State; (II) directly or indirectly used for securities investments, unless otherwise prescribed under the laws and regulations; (III) directly or indirectly used for the extension of RMB entrusted loans (unless permitted by the business scope), repayments of inter-enterprise borrowings (including third-party advances), and repayments of RMB bank loans already refinanced to any third party; (IV) Used for the payment of expenses related to the purchase of real estate not for self-use, except for foreign-invested real estate enterprises. IV. Facilitation of Domestic Equity Investments by FIEs with Funds from Foreign Exchange Settlement Except for transfers in the original currency owing to equity investments, it is acceptable for FIEs with investment as their main business (including foreign-funded investment companies, foreign-funded venture capital enterprises, and foreign-funded equity investment enterprises) to directly settle the foreign exchange capital into RMB or transfer the RMB funds in the account for FX settlement and pending payment to the account of the invested enterprise according to the actual scale of investment, provided that the domestic investment project is authentic and compliant with the regulations. When ordinary FIEs other than the above-mentioned enterprises invest in domestic equities with capital in the original currency, the existing regulations on domestic reinvestments shall prevail. When RMB funds settled with foreign exchange are used for domestic equity investments, the investee shall first register for a domestic reinvestment with the foreign exchange authority (bank) at the place of registration and open a corresponding account for FX settlement and pending payment, then the investor shall transfer the RMB funds settled with the foreign exchange, according to the actual scale of investment, to the said account, which is opened by the investee. When the investee continues to invest in domestic equities, the aforesaid principles shall apply. V. Further Standardizing the Management of Payments with Funds from Foreign Exchange Settlement (I) Foreign investors, FIEs, and other relevant applying entities shall provide, on an accurate and authentic basis and according to the regulations, the relevant documents certifying the authenticity to the banks, and complete the Order of Payments with Funds in Accounts Related to Direct Investments (see the Appendix) when applying for payments with RMB funds from the settlement of capital (including direct payments with foreign exchange capital). (II) The banks shall, according to the business development principles of “knowing your customers,” “understanding your businesses,” and “due diligence reviews,” be responsible for verification of the authenticity of outward payments with capital and payments with RMB funds from the foreign exchange settlement by the FIEs. When handling each payment with such funds, the authenticity and compliance of the certifying documents with respect to the prior payment transaction shall be examined. The banks shall keep the certifying documents relevant to the settlement and use of the foreign exchange capital of the FIEs for five years for future reference. The banks shall report the data, including the accounts related to the capital accounts and the accounts for FX settlement and pending payment (account nature code: 2113), cross-border receipts and payments, domestic transfers, foreign exchange settlement and sales within the accounts, on a timely basis and according to the Circular of the State Administration of Foreign Exchange on Issuing the Standards Version 1.0 for Collecting Data on Foreign Exchange Transactions by Financial Institutions (Huifa No. 18 [2014]). In case of transfers of funds between the accounts for FX settlement and pending payment and other RMB accounts, the information on the domestic transfers shall be reported by filling in the documents for domestic payments and receipts and indicating the fund purpose code under the “invoice number” column (according to “7.10: Code of Purpose for Foreign Exchange Settlement” in the Circular of Huifa No. 18 [2014]) ; the transaction code for other transfers than that for payments under verification of trade in goods shall be indicated as “929070”. (III) When enterprises fail to provide documents certifying authenticity for special reasons at the moment, the banks may make the relevant payments for the enterprises, provided that the obligation of due diligence review has been performed and the authentic background of the transactions has been verified, and may file with the foreign exchange authority through its relevant business system with respect to the special items on the date of payment. The banks shall collect and examine the full set of relevant certifying documents resubmitted by the enterprises within 20 working days upon completion of the payment and report to the foreign exchange authority through relevant business system with respect to the resubmission of the documents certifying the authenticity of the filing of special items. Where FIEs use capital for the purpose of reserve funds, the banks may not require submission of the aforesaid documents certifying authenticity. The cumulative amount of payments for reserve funds by a single enterprise each month (including voluntary settlement of foreign exchange and foreign exchange settlement upon payment) shall not exceed an equivalent of USD 100,000. Where a FIE applies for settlement upon payment with all the foreign exchange capital on a one-off basis, or payments with all the RMB funds in the account for FX settlement and pending payment, but fails to provide the relevant documents certifying the authenticity, the bank concerned shall not handle for the enterprise the foreign exchange settlement and payment. VI. Management of the Settlement and Utilization of Funds in the Foreign Exchange Accounts under Other Direct Investment Items The foreign exchange funds in the domestic asset realization accounts and domestic reinvestment accounts opened by domestic institutions shall be settled with reference to the regulations for management of the FIEs' capital accounts. The foreign exchange funds in the domestic asset realization accounts and domestic reinvestment accounts opened by domestic individuals and those in the overseas asset realization accounts opened by domestic institutions and individuals shall be settled directly through the banks, against the relevant business registration certificates. The foreign exchange funds in the foreign investors’ accounts for preliminary expenses shall be settled according to the principle of settlement upon payment. The foreign exchange funds in the special accounts for security deposits of overseas remittances and special accounts for security deposits domestically transferred shall not be used through the foreign exchange settlement. In case that guarantee contract is performed or deduction occurs due to default, the relevant security deposits shall be transferred into another foreign exchange account under the capital account of the recipient of the deposits that have been registered by the foreign exchange authority (bank) or approved by the foreign exchange authority, and shall be used according to the relevant regulations. The interest income and investment income in the above-mentioned accounts under direct investments can be retained in these accounts, and afterwards transferred to and retained in the settlement account under the current account or directly settled and paid through the bank against the detailed list of the interest and income. VII. Further Strengthening Ex-post Supervision and Investigations of Irregularities by the Foreign Exchange Authority (I) The foreign exchange authorities shall strengthen the guidance and examination on the compliance of banks in handling such business as settlement and utilization of capital for FIEs in accordance with relevant regulations including the Regulations of the People's Republic of China on Foreign Exchange Administration and the Provisions on Foreign Exchange Administration of Domestic Direct Investments by Foreign Investors. The manner of examination includes request for submission of written explanatory and transaction documents by the relevant entities, an interview with the persons in charge, field inspections or duplication of the relevant documents of the entities, and notification of any irregularities. With respect to banks with serious or malicious irregularities, their foreign exchange transactions under the capital account may be suspended according to the relevant procedures. With respect to FIEs with serious or malicious irregularities, their qualifications for voluntary settlement of foreign exchange may be revoked. Prior to the submission of the written explanatory documents and proper rectification, any other foreign exchange transactions under the capital account shall be prohibited. (II) For FIEs and banks with violations against this Circular with respect to foreign exchange settlement and utilization of FIEs' capital, the foreign exchange authorities shall investigate and treat them according to the Regulations of the People's Republic of China on Foreign Exchange Administration and other relevant provisions. VIII. Others This Circular shall take effect as of June 1, 2015. In case of any discrepancies with prior regulations, this Circular shall prevail. The Circular of the State Administration of Foreign Exchange on Business Operational Issues Concerning Improving Administration for the Payment and Settlement of the Foreign Exchange Capital of Foreign-Invested Enterprises (Huizongfa No. 142 [2008]) and the Supplementary Circular of the General Affairs Department of the State Administration of Foreign Exchange on Business Operational Issues Concerning Improving Administration for the Payment and Settlement of the Foreign Exchange Capital of Foreign-Invested Enterprises (Huizongfa No. 88 [2011]) and Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Pilot Reform in Some Regions on Administrative Approaches to Settlement of Foreign Exchange Capital of Foreign-invested Enterprises (Huifa No. 36 [2014]) shall be abolished at the same time. After receiving the Circular, the branches and foreign exchange administrative departments of the SAFE shall timely forward it to the central sub-branches, sub-branches, and banks within their respective jurisdictions. Please contact the Capital Account Administration Department of the SAFE in a timely manner if any problems are encountered in implementation of this Circular. Appendix: Order of Payments with Funds in Accounts Related to Direct Investments State Administration of Foreign Exchange March 30, 2015 FILE: Order of Payments with Funds in Accounts Related to Direct Investments 2015-06-11/en/2015/0611/762.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (hereinafter referred to as the “SAFE”) of all provinces, autonomous regions, and municipalities directly under the Central Government; the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; To step up efforts to streamline laws and regulations on foreign exchange administration and to facilitate trade and investment, we hereby notify you of the validity of some regulatory documents on foreign exchange administration as follows: I. 27 regulatory documents, of which the main content has been replaced by new content and does not conform to current management practices, shall be abolished. Please refer to Annex 1 for a list. II. 23 regulatory documents on foreign exchange administration, of which either the application period has expired or the objects have ceased to exist, are rendered and declared invalid. Please refer to Annex 2 for a list. The Circular will take effect as of the date of promulgation. Annex: 1. Checklist of 27 Regulatory Documents on Foreign Exchange Administration Abolished by the State Administration of Foreign Exchange 2. Checklist of 23 Regulatory Documents on Foreign Exchange Administration Declared Invalid by the State Administration of Foreign Exchange The State Administration of Foreign Exchange March 19, 2015 Annex 1 Checklist of 27 Regulatory Documents on Foreign Exchange Administration Abolished by the State Administration of Foreign Exchange 1. Circular on Urging the Submission of Foreign Exchange Statistics (Huichuan No. 04 [1998]) 2. Circular on Matters Concerning Statistics and Declaration of Portfolio Investment in Balance of Payment (Huifa No. 41 [1998]) 3. Reply on Issues Concerning Cash Withdrawal of US Dollars in a Large Amount by Domestic Institution (Huiguanjingzi No. 24 [1998]) 4. Circular on Further Clarifying Statistics and Declaration System of Portfolio Investment in Balance of Payment and Interface Specification for Business System of Stock Exchange (Huiguohan No. 36 [1998]) 5. Circular on Issues Concerning Foreign Exchange Administration for Foreign-aid Projects (Huifa No. 251 [1999]) 6. Circular on Terminating the Implementation of Some Foreign Exchange Administration Regulations (Huifa No. 289 [1999]) 7. Circular on Issuing the Assessment Measures for Balance of Payment and Statistics and Analysis of Foreign Exchange Receipts and Payments (Huifa No. 343 [1999]) 8. Circular on Forwarding the Circular on Printing and Distributing Detailed Rules for the Implementation of the Measures for Improving the “Replacement of Imported Materials with Domestic Materials” in Steel Industry (Huizongfa No. 25 [1999]) 9. Circular of Balance of Payments Department of the State Administration of Foreign Exchange on Relative Work Principle on Increasing Declaration Effectiveness of Foreign-Related Receipts in Balance of Payment (Huiguohan No. 35 [2001]) 10. Circular of the State Administration of Foreign Exchange on Issues about Adjusting the Related Policies on Foreign Cash Administration and Clarifying Related Operation (Huifa No. 20 [2002]) 11. Circular of the State Administration of Foreign Exchange on Further Clarifying the Procedures for Examining and Approving Foreign Exchange Purchases for Advance Payments in Foreign Exchange under Letters of Credit by City Commercial Banks, Rural Commercial Banks, and Rural Credit Cooperatives (Huifa No. 76 [2002]) 12. Reply of the State Administration of Foreign Exchange on the Mortgaging of Foreign Exchange for RMB Loans by Domestic Resident Individuals (Huifu No. 121 [2002]) 13. Circular of the State Administration of Foreign Exchange on Key Monitoring System for Capital Account (Huifa No. 36 [2003]) 14. Circular of the State Administration of Foreign Exchange on Transitional Policies and Measures after Revocation of Certain Examinations and Approvals for Foreign Exchange Administration under the Capital Account (Huifa No. 50 [2003]) 15. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Printing and Distributing the Standardized Requirements for the Banks’ Interface Procedures with the Management Information System for Foreign Exchange Accounts (Trial) (Huizongfa No. 127 [2004]) 16. Reply of the Balance of Payments Department of the State Administration of Foreign Exchange on Issues Concerning the Adjustment to Turnover Positions of Foreign Banks for Foreign Exchange Settlement and Sales (Huiguofu No. 5 [2004]) 17. Circular of the State Administration of Foreign Exchange on Popularizing the Statistics and Monitoring System for the External Debt (Bank version) and Adjusting the Requirements on the Submission of the External Debt Data (Huifa No. 78 [2005]) 18. Circular of the State Administration of Foreign Exchange on Unifying the Time for Spot Bid-Offer Trading and Spot Over-the-Counter Trading on the Inter-bank Foreign Exchange Market (Huifa No. 50 [2006]) 19. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Adjusting the Financial Institution Code and Financial Institution Identification Code (Huizongfa No. 82 [2006]) 20. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Forwarding the Decision of the State Council on the Fourth Batch of Revocations and Adjustments of Administrative Approval Items (Huizongfa No. 189 [2007]) 21 Circular of the State Administration of Foreign Exchange on Issuing the List of Administrative License Items of the State Administration of Foreign Exchange (Huifa No.43 [2010]) 22. Circular of the General Affairs Department of the State Administration of Foreign Exchange on the Standard Library of the State Administration of Foreign Exchange on Information System Codes (Version 01 [2010]) (Huizongfa No. 59 [2010]) 23. Circular of the State Administration of Foreign Exchange on Cancellation and Adjustments of the Approval Authorities and the Administrative Measures for Certain Foreign Exchange Businesses under the Capital Account (Huifa No. 20 [2011]) 24. Circular of the State Administration of Foreign Exchange on Issues Concerning Further Clarifying and Regulating the Administration of Certain Foreign Exchange Businesses under the Capital Account (Huifa No. 45 [2011]) 25. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Scale up of Comprehensive Data Utilization Platform and Promotion of Comprehensive Data Utilization (Huizongfa No. 93 [2011]) 26. Circular of General Affairs Department of the State Administration of Foreign Exchange on Revision to Methods for Selecting Star of Balance of Payment Statistics (Huizongfa No. 153 [2012]) 27. Reply of the General Affairs Department of the State Administration of Foreign Exchange on Issues Concerning External Claims Registration for Financing Lease Companies (Huizongfu No. 142 [2013]) Annex 2 Checklist of 23 Regulatory Documents on Foreign Exchange Administration Declared Invalid by the State Administration of Foreign Exchange 1. Circular of the State Administration of Foreign Exchange on Promoting the Use of Management Information System for Foreign Exchange Accounts (Huifa No. 82 [2002]) 2. Circular of the State Administration of Foreign Exchange on Promoting the Use of Management Information System for Foreign Exchange Accounts (Huifa No. 83 [2002]) 3. Reply of the General Affairs Department of the State Administration of Foreign Exchange on Issues Concerning Forfeiting Operations and Import License (Huizongfu No. 3 [2002]) 4. Announcement No. 1 [2003] of the State Administration of Foreign Exchange 5. Announcement No. 1 [2004] of the State Administration of Foreign Exchange 6. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Issues Concerning the Submission of Statistical Statements of Banks' Foreign Exchange Settlement and Sales during Holidays in 2005 (Huizongfa No. 168 [2004]) 7. Reply of the State Administration of Foreign Exchange on Issues Concerning the Margin Accounts and Other Relevant Aspects for the Letters of Credit Issued by the Guangdong Development Bank (Huifu No. 1 [2006]) 8. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Issues Concerning Upgrade of Management Information System for Foreign Exchange Accounts (Huizongfa No. 47 [2006]) 9. Reply of the State Administration of Foreign Exchange on Banks Authorizing Foreign Currency Conversion Agency to Convert RMB back to Foreign Cash for Foreign Individuals (Huifu No. 210 [2007]) 10. Circular of the State Administration of Foreign Exchange on Issues about Collecting and Sorting out Historical Data during 2008 Annual Inspection of the Foreign Exchange Businesses of Foreign-Invested Enterprises (Huifa No. 9 [2008]) 11. Circular of the State Administration of Foreign Exchange on Issues Concerning the Preparation for National Promotion and Implementation of the Foreign Exchange Business Information System for Direct Investments (Huifa No. 13 [2008]) 12. Circular of the State Administration of Foreign Exchange on Issues Concerning the National Promotion and Implementation of the Overseas Investment Module of the Foreign Exchange Business Information System for Direct Investments (Huifa No. 72 [2008]) 13. Reply of the State Administration of Foreign Exchange on SAIC Finance Launching Foreign Exchange Management Information System for Direct Investments (Huifu No. 5 [2009]) 14. Reply of the State Administration of Foreign Exchange on Reviewing Sources of Foreign Exchange Funds of Guodu Securities Co., Ltd. for Making Overseas Investment in China Guodu (Hong Kong) Financial Holdings (Huifu No. 18 [2009]) 15. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Issues about Doing a Good Job in the 2009 Annual Inspection of the Foreign Exchange Businesses of Foreign-Invested Enterprises through Foreign Exchange Management Information System for Direct Investments (Huizongfa No. 16 [2009]) 16. Reply of the General Affairs Department of the State Administration of Foreign Exchange on Issues Concerning Application of Laws Related to Settlement of Foreign Exchange Capital of Foreign-Invested Enterprises ( Huizongfu No. 29 [2009]) 17. Reply of the State Administration of Foreign Exchange on Issues Concerning Remittance by Royal Bank of Canada to Recover Losses of Its Domestic Branches (Huifu No. 190 [2010]) 18. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Relevant Issues Concerning the Pilot Program and the On-line Operation of the Statistical Software for the Foreign Exchange Assets and Liabilities of Chinese-funded Financial Institutions (Huizongfa No. 2 [2010]) 19. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Investigating Foreign Exchange Accounts Held by Domestic Non-resident (Huizongfa No. 116 [2011]) 20. Circular of the State Administration of Foreign Exchange on Regulating the Submission of Capital Account Data by Domestic Banks (Huifa No. 36 [2012]) 21. Circular of the State Administration of Foreign Exchange on Pilot Program of the Capital Account Information System and Related Data Submission (Huifa No. 60 [2012]) 22. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Tasks Regarding Interface Acceptance and Joint Debugging for Account Information of Domestic Banks, Foreign Exchange Settlement and Sales Data within the Account and Capital Account Data (Huizongfa No. 139 [2012]) 23. Circular of the General Affairs Department of the State Administration of Foreign Exchange on Issues Concerning Annual Declaration Work on Foreign Exchange Operation Status by Foreign-invested Enterprises in 2014 (Huizongfa No. 58 [2014]) 2015-05-18/en/2015/0518/760.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and the head offices of designated Chinese-funded foreign exchange banks: To regulate foreign exchange administrationfor overseas traders and brokers engaging in futures trading under specific domestic categories, we hereby release this circular, in accordance with the Regulations of the People’s Republic of China on Foreign Exchange Administration, and the Interim Management Measures for Overseas Traders and Brokers Engaging in Futures Tradingunder Specific Domestic Categories (China Securities Regulatory Commission Order No.116, “Interim Measures”) and relevant provisions. I.For the purpose of this Circular, an overseas trader refers to a legal entity or other business organization duly established overseas (including Hong Kong, Macau and Taiwan, the same below), or a natural person with lawful foreign citizenship, who conducts futures trading and is responsible for the trading results. An overseas brokerrefers to a financial institution duly incorporated overseas and certified or licensed by the local futures regulatory authority to accept funds and trading orders from a trader and execute futures orders in its own name for the trader. A member refers to a domestic member of a futures exchange. The specific domestic categorieshereunder are determined and published by the China Securities Regulatory Commission (CSRC). II. The State Administration of Foreign Exchange (SAFE) and its branches and sub-branches (foreign exchange authorities) are responsible for the supervision, administration and inspection of the opening and use of foreign exchange accounts, receipts and payments as well as remittance and exchange of funds involved in the futures trading under specific domestic categoriesconducted by overseas traders, overseas brokers, domestic futures exchanges and members. III. Overseas traders and overseas brokers may remit funds inward in RMB or foreign exchange for futures trading under specificdomestic categories. IV. When providingservices such as trading and settlement to members, overseas traders or overseas brokers as floor traders for futures trading under specific domestic categories, a futures exchange may open a corresponding special foreign exchange settlement account with a futures margin depositary bank (depositary bank) for the receipts and payments, remittances and exchanges as well as transfer of funds involved in such trading (see Appendix 1 for the nature, name and scope of receipts and payments of the account). V. When providing services such as trading and settlement to overseas traders or overseas brokers for futures trading under specific domestic categories, a futures company or other organization withsettlementqualification may open a corresponding special foreign exchange margin account with a depositary bank for the receipts and payments, remittances and exchanges as well as transfer of funds involved in such trading (see Appendix 1 for the nature, name and scope of receipts and payments of the account). VI. An overseas trader or overseas broker may open a special foreign exchange accountfor futures settlement with a depositary bank for the receipts and payments, remittances and exchanges as well as transfer of funds involved infutures trading under specific domestic categories (see Appendix 1 for the nature, name and scope of receipts and payments of the account). The funds deposited in the special foreign exchange account for futures settlement by an overseas trader or broker shall not be included in the quota for short-term external debt of the depositary bank, while the depositary bank shall duly report the relevant data to aforeign exchange authority, and the interest on such funds shall be calculated at the demand deposit interest rate.Such funds shall be managed under special accounts, and shall not be used for any other purposes. VII. A depositary bank shall process the settlement and purchases of foreign exchange based on the actual results of futures trading under specific domestic categories by an overseas trader, an overseas broker or a member. The foreign exchange settlement and purchase only involves settlement of profit or loss from futures trading, payment of service fees, delivery of payment for goods, as well as call for payment of gaps in settlement currency, which are associated with futures trading under specific domestic categories. After foreign exchange settlement or purchases, the relevant funds shall be directly paid to the payee or transferred to the corresponding account in accordance with the institutional requirements on futures trading and settlement. VIII. Futures exchanges, members and domestic banks shall report the balance of payments statistics in accordance with the Measures for Reporting of Balance of PaymentsStatistics and relevant provisions, and the data on foreign-related receipts and payments via banks as well as the data on external financial assets and liabilities and trading statistics. A depositary bank shall report the data on the account, foreign exchange settlement and sales, domestic transfer of funds as well as external debtunder the accountin accordance with relevant requirements of the SAFE. IX. In case of physical delivery for futures trading under specific domestic categories, a futures exchange or a member that directly provides settlement services for payment delivery to an overseas trader or an overseas broker shall, in accordance with the provisions relevant to foreign exchange administration for trade in goods and after registration in the “List of Enterprises with Foreign Exchange Receipts and Payments under Trade”, go throughthe procedures for foreign exchange receipts and payments under trade, report through banks the data on the foreign exchange receipts and payments under trade, and keep the delivery and settlement sheets and relevant transaction documents for 5 years for future reference. X. A futures exchange shall report to aforeign exchange authority on a monthly basis the basic information on futures trading under specific domestic categories by overseas traders and overseas brokers, as well as the data on the inflows and outflows of funds, foreign exchange settlement and purchases and physical delivery (see the format in Appendix 2). XI. In case of violations of this Circular and other provisions relevant to foreign exchange administration by an overseas trader, an overseas broker, a futures exchange, a member and a depositary bank infutures trading under specific domestic categories, foreign exchange authorities shall impose penalties on themin accordance with the Regulations of the People’s Republic of China on Foreign Exchange Administration. XII. This Circular shall be interpreted by the State Administration of Foreign Exchange. XIII. This Circular shall take effect as of August 1, 2015. Upon receipt of this Circular, the SAFE branches shall forward it to central sub-branches, sub-branches, urban commercial banks, and foreign banks under their jurisdiction as early as possible, while the designated Chinese-funded foreign exchange banks shall, upon receipt of this Circular, forward it to their respective branches and sub-branches under their jurisdiction as early as possible. Please contact the Capital Account Administration Department of the SAFE if any difficulties are encountered in implementing this Circular. Appendix: 1. Scope of Receipts and Payments under Foreign Exchange Accounts for Futures Trading under Specific Domestic Categories by Overseas Traders and Brokers 2. Monthly Statements on Futures Trading under Specific Domestic Categories by Overseas Traders and Overseas Brokers State Administration of Foreign Exchange July 29, 2015 FILE: Scope of Receipts and Paymentsunder Foreign Exchange Accounts for Futures Trading under Specific Domestic Categories by Overseas Traders and Brokers FILE: Monthly Statements on Futures Trading under Specific Domestic Categories by Overseas Traders and Overseas Brokers 2015-10-29/en/2015/1029/768.html
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Tianjin Branch, Shanghai Branch, and Beijing Foreign ExchangeAdministrative Department of the State Administration of Foreign Exchange: The Application for Approving TransForex (Tianjin) Currency Exchange Co., Ltd to Engage in Cross-border Transport of Foreign Currency Banknotes (Jinhuifa No. 128 [2014]),the Application of Shanghai Branch of the State Administration of Foreign Exchange for Approving Travelex Currency Exchange (China) Co., Ltd to Engage in Cross-border Transport and Wholesale of Foreign Currency Banknotes (Shanghai Huifa No. 138 [2014]), and the Application of Beijing Foreign Exchange Administrative Department of the State Administration of Foreign Exchange for Approving Beijing United Money Exchange Co., Ltd to Engage in Cross-border Transport of Foreign Currency Banknotes (Jinghui No. 162 [2014])have been received, and the Reply is hereby highlighted as follows： I. Approving TransForex (Tianjin) Currency Exchange Co., Ltd, Travelex Currency Exchange (China) Co., Ltd and Beijing United Money Exchange Co., Ltd (“Three Franchised Institutions”) to engage in transport of foreign currency banknotes into or out of the territory and foreign currency wholesale business (“banknote transport and wholesalebusiness”). II. The scope of the banknote transport and wholesale business includes: (I) determining the currency for transport in their sole discretion while taking into full consideration the market demand. (II) choosing in their sole discretion the partners (limited to banks, other franchised institutions, or retail business departments of the Three Franchised Institutions) for the sales and purchases of foreign currency banknotesacross the country. Thesales and purchases of foreign currency banknotes with banks shall be cleared in foreign exchange. III. In principle, the banknote transport and wholesale businesscan be carried out by the head offices of the Three Franchised Institutions only; if any branch is needed to engage in banknote transport, strict authorization and enhanced administration are required. For the requirements on the administration of banknote transport, please refer to the Regulations on the Administration of Banks’ Transport of Foreign Currency Banknotes into or out of the Territory of the PRC (Huifa No. 24 [2014]). IV. The Three Franchised Institutions shall manage the operating and accounting of the banknote transport and wholesale business and the retail business separately, and handle the clearing through special accounts for the banknote transport and wholesale business of a franchised institution. (I) The special accounts for the banknote transport and wholesale business of a franchised institution include special RMB and foreign exchange accounts, which can be used for the clearingfor the banknote transport and wholesale businessonly, and shall not be used for any other business purpose. (II) The Three Franchised Institutions may open with a bank or designate an RMB account as thespecial RMB account, which can only be used for the clearing of funds for the businesses with other franchised institutions, and the retail business departments of the Three Franchised Institutions; the funds in the special RMB account can be transferred to a special foreign exchange account based on the business requirements; and profits can also be transferred out. (III) To open a special foreign exchange account, the Three Franchised Institutions should first obtain the approval from your branches or foreign exchange administrative departments, with thelimits verified by your branches or foreign exchange administrative departments. Where more than one special foreign exchange account is opened, limits shall be verified respectively; funds in the special foreign exchange accounts can be transferred without limitation; any change to the limit should be approvedby your branches or foreign exchange administrative departments. (IV) The special foreign exchange account can be used only for the clearing of funds for businesses with domestic banks, other franchised institutions, the retail business departments of the Three Franchised Institutions, and overseas cooperative institutions; and the funds in the special foreign exchange account can be converted into other foreign currencies without limitation. (V) The Three Franchised Institutions may remit foreign exchange into their respective special foreign exchange account as theworkingcapital, or deposit foreign exchange purchased with RMB from the banks with which their special foreign exchange accounts are opened. The surplus working capital which is remitted with foreign exchange can be transferred out via theoriginal route; the foreign exchange purchased with RMB and deposited can be first settled into RMB funds with the original bank where the funds have been purchased, then the RMB funds can be transferred out. (VI)The scope of utilization of a special foreign exchange accountincludes: Receipts: working capital remitted inward or deposited through foreign exchange purchases, deposit of foreign exchange purchased using the funds in aspecialRMB account, proceeds from sales of foreign currency banknotes, interests received, funds transferred fromother special foreign exchange accounts, and other receipts approved by foreign exchange authorities. Payments: excessive working capital remitted outward or transferred through foreign exchange settlement, payment for purchase of foreign currency banknotes, payment for foreign exchange settlement of profits, payment for account fees, funds transferred to other foreign exchange special accounts, and other payments approved by foreign exchange authorities. V. Your branches orforeign exchange administrative departments shall request the Three Franchised Institutions to regularly report the business they carry out, including but not limited to: overseas and domestic partners, opening and utilization of the special accounts for the banknote transport and wholesale business of a franchised institution, and business size. Meanwhile, supervision and guidance on the businesses carried out by the Three Franchised Institutions shall be strengthened through off-site and on-site verification. VI. Your branches or foreign exchange administrative departmentsshall request the Three Franchised Institutions tocomply with domestic laws and regulations against money laundering and terrorism financing as they build business relationships or do business with their domestic and overseas partners, implement the relevant anti-money laundering and counter-terrorism financing system set out in the application documents, and perform the obligations of reporting anti-money laundering information in accordance with the requirements from the anti-money laundering departments of the local branches of the People’s Bank of China. VII. Your branches or foreign exchange administrative departments shall disqualify the Three Franchised Institutions for carrying out the business if the following circumstances are found in the Institutions: (I) Failure to effectively carry out the business after being approved or to provide sound foreign currency banknote wholesale services to market players and conduct immediate rectification(including minor currencies and minor denomination foreign exchange banknotes). (II) Engaging in money laundering in the name of banknote transport and wholesale and other activities inviolationofnational laws and regulations. VIII. Article 45 of the Measures for Administration of the Pilot Program of Franchised Domestic and Foreign Currency Exchange Business for Individuals (Huifa No. 27 [2012]) is not applicable to the purchase of foreign currency banknotes by domestic franchised institutions engaging in domestic and foreign currency exchange for individualsusing RMB or foreign exchangefrom the Three Franchised Institutions; but the settlement shall be made using RMB or foreign currency reserve funds. Upon receipt of this Reply, each foreign exchange branch and administrative department shall immediatelyforwardit to the franchised institutions engaging in domestic and foreign currency exchange for individuals within their respective jurisdiction. State Administration of Foreign Exchange May 26 2015 2015-07-01/en/2015/0701/764.html
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The branches and administrative departments of the State Administration of Foreign Exchange (SAFE) in various provinces, autonomous regions, and municipalities directly under the Central Government, the SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, and nationwide Chinese-funded banks: For the purpose of standardizing the declaration of balance of payments statistics for foreign-related receipts and payments by the declarer through domestic banks, the SAFE has revised the Detailed Rules for the Implementation of the Declaration of Balance of Payments Statistics through Banks (see appendix), which is now printed and distributed. All branches and foreign exchange administrative departments of the SAFE shall, after receipt of this Circular, forward it to the central sub-branches, sub-branches, urban commercial banks, rural commercial banks, wholly foreign-funded banks, Chinese-foreign equity joint venture banks, branches of foreign banks, and rural cooperative financial institutions within their respective jurisdictions in a timely manner. All nationwide Chinese-funded banks shall forward it to their branches and sub-branches timely for implementation. Appendix: Detailed Rules for the Implementation of the Declaration of Balance of Payments Statistics through Banks State Administration of Foreign Exchange June 18, 2015 FILE: Detailed Rules for the Implementation of the Declaration of Balance of Payments Statistics through Banks 2015-08-05/en/2015/0805/765.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo: To further facilitate trade and investment facilitation and serve the real economy, the State Administration of Foreign Exchange (SAFE) has revised the Regulations on the Centralized Operation and Management of the Foreign Exchange Funds of MNCs (Interim). Relevant issues are notified as follows: I. Pilot for Self-Disciplinary Management of External Debt Proportion. Member enterprises of an MNC will be subject to self-disciplinary management of external debt proportion when borrowing external debt and the host enterprise may centralize all or part of external debt quotas of its member enterprises; foreign exchange settled under external debt can be used to pay RMB loans or make equity investments in accordance with the laws.Upon registration of external debt, an enterprise can select the currency for repayment at its sole discretion according to its commercial principles. II. The functions of overseas master accounts will be optimized. Domestic banks may utilize in China the deposits that are absorbed through the overseas master accounts for foreign exchange funds and which do not exceed 50% (inclusive) of the average daily deposit balance over the last six months; when included in banks' overall positions of foreign exchange settlement and sales for management, funds in an overseas master account can be used for foreign exchange settlement and sales at a certain proportion. III. Account opening requirements will be simplified. MNCs will be allowed to operate the foreign exchange receipts of class-A member enterprises that do not need to be in the account for export income to be verified. A qualified host enterprise of an MNC will be allowed to open domestic and overseas master accounts for foreign exchange funds with non-local banks. IV. Procedures for foreign exchange receipts and payments will be simplified. Banks will be allowed to verify the authenticity of relevant electronic documents and handle foreign exchange receipts and payments under the current account in the principle of "knowing your customer", "understanding your business" and "due diligence", while purchases and payments of foreign exchange for external payment under the current and capital accounts will be allowed to be processed with different banks. V. Procedures for the declaration of foreign-related receipts and payments will be improved. Procedures for the declaration of the centralized receipts and payments of foreign exchange and the receipts and payments for net settlement will be simplified, and the way of declaration of the foreign-related receipts and payments that is fit for the automatic sweeping model of the cash pool will be established to allow banks to sign a package of sweeping agreements regarding foreign-related receipts and payments with enterprises. VI. Ongoing and ex-post management will be strengthened. First, banks and enterprises are required to report accurate data such as pilot business data in time in accordance with regulations. Second, foreign exchange authorities should intensify monitoring of cross-border capital flows involved in the centralized operation and management of foreign exchange funds by MNCs, issue risk reminder notices in case of abnormalities or suspicious activities and conduct onsite verification and inspection in accordance with the laws. Third, the SAFE branches and foreign exchange administrative departments (the SAFE branches) can require a host enterprise to conduct a one-time update of the filing materials and redevelop operating rules for filing, or to file new businesses such as self-disciplinary management of external debt proportion alone. The SAFE branches are required to file with the SAFE pursuant to the above regulation and those that conduct new businesses should file the overall business operating rules with the SAFE. Fourth, when reviewing an enterprise' operating rules for filing, a SAFE branch must review the quotas of external debt and external loans, making sure they are accurate. The SAFE branches should ensure that systems run well to enhance cross-departmental coordination and regulation of banks and enterprises. The revised Regulations on the Centralized Operation and Management of the Foreign Exchange Funds of MNCs are now issued to you for implementation. Please be kindly noted that any special case should be reported to the SAFE. Contact Number: 010-68402113; 68402448; 68402381; 68402383 Appendix: Regulations on the Centralized Operation and Management of the Foreign Exchange Funds of MNCs State Administration of Foreign Exchange August 5, 2015 FILE: Appendix 2015-11-11/en/2015/1111/769.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government, and the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo: For the purpose of further standardizing domestic and foreign currency exchange franchise business for individuals and foreign currency exchange business, the relevant issues are notified as follows, in accordance with the Administrative License Law, Regulations on Foreign Exchange Administration, the Interim Measures for Administration of Foreign Currency Exchange Agencies (the Decree of the People’s Bank of China (No. 6 [2003]), and the Circular of the State Administration of Foreign Exchange on Printing and Distributing the Measures for Administration of the Pilot Program on Domestic and Foreign Currency Exchange Franchise Businesses for Individuals(Huifa No. 27 [2012]): I. Further enhancing administration of market access of franchised institutions engaging in domestic and foreign currency exchange for individuals (the franchised institutions).For the franchised institutions newly established or with equity transfer, the branches of the State Administration of Foreign Exchange (including the foreign exchange administrative departments, hereinafter referred to as the SAFE branches) shall earnestly carry out onsite inspection and acceptance, strictly examine the qualifications, equity structure of the applying institutions and the business background of the transferee, and shall adequately take into consideration the actual demand of local individuals for domestic and foreign currency exchange, so as to rationally control the frequency of approval of franchised institutions and avoid excessive competition. II. Further reinforcing day-to-day business management of franchised institutions and foreign currency exchange agencies (I) Franchised institutions and foreign currency exchange agencies shall carry out daily operation activities within the business scope, and perform various statistics and reporting obligations, in strict accordance with the relevant regulations. (II) Authorized banks shall strengthen administration and monitoring of foreign currency exchange agencies. Once the foreign currency exchange agencies that have conducted exchange business in violation with relevant regulations are identified, the banks shall correct them in a timely manner and report such cases to the local SAFE branches. (III) All SAFE branches shall establish a working mechanism for onsite and offsite verifications of franchised institutions, strengthen day-to-day monitoring and administration of franchised institutions, and learnthe construction and implementation of their internal control systemsso as to guard against illegal publicity, investment invitation and operation beyond the scope. The SAFE branches shall reinforce communications with each other, investigate and grasp the situations of branch establishment by local franchised institutions in other regions, and by non-local franchised institutions in this locality, and track their business developments. III. Dealing with the irregular operational activities of franchised institution and foreign currency exchange agencies. For franchised institutions that carry out business without authorization, run business beyond the approved scope or are suspected of engaging in online foreign exchange speculation, the SAFE branches shall suspend or cancel their qualification for conducting a pilot program on domestic and foreign currency exchange franchise business for individuals. For foreign currency exchange agencies, the SAFE branches shall urge authorized banks to suspend or cancel their foreign currency exchange business in a timely manner. For franchised institutions thathave engaged in the afore-mentioned activities since the implementation of the Measures for Administration of the Pilot Program on Domestic and Foreign Currency Exchange Franchise Businesses for Individuals, they shall be handled in accordance with the preceding paragraph. IV. The SAFE branches shall, upon receipt of this Circular, promptly forward it to the central sub-branches and sub-branches of the SAFE as well as to the commercial banks and franchised institutions, within their respective jurisdiction. The General Affairs Department of the State Administration of Foreign Exchange February 12, 2015 2015-06-05/en/2015/0605/761.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and national Chinese-funded banks: To further promote smooth progress in the assessment of the banks' implementation of regulations on foreign exchange administration and to make this work more scientific and fair, the State Administration of Foreign Exchange has once again amended the Measures for Assessment ofBanks’ Implementation of Regulations on Foreign Exchange Administration (see Appendix, hereinafter referred to as the “Measures”). We hereby provide notification on the relevant issues as follows: I. After receiving this Circular, all branches and foreign exchange administrative departments of the State Administration of Foreign Exchange shall immediately forward this Circular to the central sub-branches, sub-branches, urban commercial banks, rural commercial banks, wholly foreign-funded banks, Chinese-foreign joint venture banks, branches of foreign banks, and rural cooperative financial institutions within their respective jurisdictions, complete as soon as possible the operational training for their central sub-branches and sub-branches within their respective jurisdictions, and, in strict accordance with the Measures, carry out fair and just assessments of the banks within their respective jurisdictions. II. All national Chinese-funded banks shall forward this Circular to their branches within their respective jurisdictions as soon as possible, earnestly implement the relevant requirements of the Measures, and conduct their various businesses in accordance with the relevant laws and regulations. Ⅲ. The Circular of the State Administration of Foreign Exchange on Revising the Measures for Assessment of Banks' Implementation of Regulations on Foreign Exchange Administration (Huifa No. 38 [2010]), the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Supplementary Entry of Assessment Information in the System for Assessment of Banks' Implementation of Regulations on Foreign Exchange Administration (Huizongfa No. 128 [2010]) , and the Circular of the State Administration of Foreign Exchange on Adjusting the Assessment Period of Banks' Implementation of Regulations on Foreign Exchange Administration (Huifa No. 42 [2014]) shall be annulled from the date of issuance of the Circular. Assessments ofbanks’ implementation of regulations on foreign exchange administration in 2015 shall be governed by the Measures. If any problems are encountered during implementation, please report them to the relevant departments of the SAFE in a timely manner. Telephone numbers: 010-68402113 (General Affairs Department), 010-68402593 (Balance of Payments Department), 010-68402104 (Current Account Management Department), 010-68402348 (Capital Account Management Department), 010-68402378 (Supervision and Inspection Department) and 010-68402028 (Data Monitoring Center for Foreign Exchange Transaction). Appendix: Measures for Assessment ofBanks’ Implementation of Regulations on Foreign Exchange Administration State Administration of Foreign Exchange June 17, 2015 FILE: Measures for Assessment of Banks’ Implementation of Regulations on Foreign Exchange Administration 2015-08-18/en/2015/0818/766.html
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The branches and foreign exchange administration departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and all designated Chinese-funded foreign exchange banks: To meet the demands of foreign central banks, monetary authorities, other official reserves administrations, international financial organizations and sovereign wealth funds (collectively referred to as "foreign central banks and similar institutions") for investing in China's interbank market, relevant issues are notified as follows regarding their opening foreign exchange accounts with Chinese commercial banks: I. To access China's interbank bond market and foreign exchange market, foreign central banks and similar institutions can open a special domestic account for foreign exchange with a Chinese bank by presenting the filing form for investments in China's interbank foreign exchange market or the reply from a relevant department on conducting transactions of funds for relevant businesses. The code of the account is 3400 and the nature of the account is a domestic foreign exchange account for foreign institutions/individuals. Relevant foreign exchange receipts and payments involved in the transactions by foreign central banks and similar institutions in China's interbank bond market and foreign exchange market can be directly processed through their special foreign exchange accounts based on the payment order. II. A Chinese bank is required to report all the data of foreign central banks and similar institutions accurately and in time, in accordance with the Circular of the State Administration of Foreign Exchange on Printing and Distributing the Statistical System for External Financial Assets and Liabilities and Foreign Transactions (Huifa No. 43 [2013]), the Circular of the State Administration of Foreign Exchange on Issuing the Standards for Collecting Data on Foreign Exchange Transactions by Financial Institutions (Version 1.0) (Huifa No. 18 [2014])), the Circular of the State Administration of Foreign Exchange on Printing and Distributing the Detailed Rules for the Implementation of the Declaration of Balance of Payments Statistics through Banks (Huifa No. 27 [2015]). III. For any other matters not covered herein, please refer to the Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning the Management of Domestic Foreign Exchange Accounts of Overseas Institutions (Huifa No. 29 [2009]) for implementation. IV. All branches and foreign exchange administration departments of the SAFE should immediately forward the Circular to the central sub-branches, sub-branches and foreign banks within their respective jurisdiction; while all the designated Chinese-funded foreign exchange banks shall forward it to their subsidiaries as soon as possible. If any problems are encountered during implementation, please report them to the SAFE in a timely manner. Contact person & number: Zhou Haiwen, 010-68402366. State Administration of Foreign Exchange October 28, 2015 2015-11-17/en/2015/1117/770.html
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The SAFE recently released Chinas International Investment Position for the year 2009. The statistics reveal that at the end of 2009, China's external financial assets hit USD3460.1 billion, up 17 percent over that at the end of 2008; external financial liabilities reached USD1638.1 billion, a rise of 12 percent year on year; external net financial assets totaled USD1821.9 billion, an increase of 22 percent year on year. Among the external financial assets, direct investments abroad totaled USD229.6 billion, portfolio investments totaled USD242.8 billion, other investments totaled USD536.5 billion, and reserves assets reached USD2451.3 billion, accounting for 7 percent, 7 percent, 16 percent, and 71 percent of external financial assets respectively. In terms of external financial liabilities, foreign direct investments totaled USD997.4 billion, portfolio investments USD190 billion, and other investments USD450.8 billion, accounting for 61 percent, 12 percent, and 28 percent of external financial liabilities respectively. The International Investment Position (hereinafter referred to as the IIP) is a statistical statement which reflects at a specific point the stocks of financial assets and liabilities of one country or region to other countries or regions in the world; together with the Balance of Payments Statement (BOP statement) it constitutes the complete international accounts system of the country or region indicating the trade flows. The SAFE adjusted its IIP from 2004 to 2008 according to the latest data. China's International Investment Position Unit: 100 million US dollars Items End of 2004 End of 2005 End of 2006 End of 2007 End of 2008 End of 2009 Net Position 2764 4077 6402 11881 14938 18219 A. Assets 9291 12233 16905 24162 29567 34601 1. Direct Investments Abroad 527 645 906 1160 1857 2296 2. Portfolio Investment 920 1167 2652 2846 2525 2428 2.1 Equity Securities 0 0 15 196 214 546 2.2 Debt Securities 920 1167 2637 2650 2311 1882 3. Other Investment 1658 2164 2539 4683 5523 5365 3.1 Trade Credits 432 661 922 1160 1102 1646 3.2 Loans 590 719 670 888 1071 942 3.3 Currency and Deposits 553 675 736 1380 1529 1409 3.4 Other Assets 83 109 210 1255 1821 1368 4. Reserves Assets 6186 8257 10808 15473 19662 24513 4.1 Monetary Gold 41 42 123 170 169 371 4.2 Special Drawing Rights 12 12 11 12 12 125 4.3 Reserves Position in the Fund 33 14 11 8 20 25 4.4 Foreign Exchange 6099 8189 10663 15282 19460 23992 B. Liabilities 6527 8156 10503 12281 14629 16381 1. Foreign Direct Investments 3690 4715 6144 7037 9155 9974 2. Portfolio Investment 566 766 1207 1466 1677 1900 2.1 Equity Securities 433 636 1065 1290 1505 1748 2.2 Debt Securities 133 130 142 176 172 152 3. Other Investment 2271 2675 3152 3778 3796 4508 3.1 Trade Credits 809 1063 1196 1487 1296 1617 3.2 Loans 880 870 985 1033 1030 1114 3.3 Currency and Deposits 381 484 595 791 918 1034 3.4 Other Liabilities 200 257 377 467 552 742 Note: 1. This IIP employs rounded-off numbers. 2. Net position refers to assets minus liabilities, + refers to net assets, and -refers to net liabilities. Compilation Principles and Indexes for the IIP I. Compilation Principles for the IIP In accordance with the standards of the Balance of Payments Manual (Fifth Edition) published by the International Monetary Fund (IMF), the IIP is a statistical statement which reflects at a specific point the stocks of financial assets and liabilities of one country or region to other countries or regions of the world. Changes in the IIP can be caused by changes in transactions, prices, or exchange rates, as well as by other adjustments during a specific period. The IIP is consistent with the BOP statement with regard to the principles of valuation, measurement, and conversion, and together with the BOP Statement constitutes a complete international accounts system of the country or region. Chinas IIP is a statistical statement which reflects at a specific point the stocks of financial assets and liabilities of China (excluding that of Hong Kong SAR, Macao SAR, and Taiwan Province) to other countries or regions of the world. II. Explanation of the Major IIP Indexes According to IMF standards items on the IIP are categorized according to assets and liabilities. Assets are divided into China's direct investments abroad, portfolio investments, other investments, and reserves assets, and liabilities are divided into foreign direct investments, portfolio investments, and other investments. The net position refers to external assets minus external liabilities. The items are specifically defined as follows: 1. Direct Investment refers to external investment whereby an investor of one country operates an enterprise located in another country with the aim of acquiring effective control over the enterprise. It consists of direct investment abroad and foreign direct investment. Direct investment abroad includes the stocks of the direct investment abroad conducted by China's non-financial sectors, the stocks of the capital fund and working capital allocated by domestic banks to set up branches overseas, as well as the stocks of loans between the parent companies and the subsidiaries both in China and abroad, and the stocks of other receivables and payables. Foreign direct investment includes the stocks of foreign direct investment absorbed by Chinas non-financial sectors, the stocks of direct investment overseas absorbed by the financial sectors (including foreign investment attracted by branches of foreign financial sectors and Chinese-funded financial sectors, and investments by foreign parties in joint financial sectors), as well as the stocks of loans between the parent companies and the subsidiaries both in China and abroad, and the stocks of other receivables and payables. 2. Portfolio Investment includes some types of investment such as shares, long- and medium-term bonds, and money-market instruments. Portfolio investment assets refer to holdings of negotiable securities, such as shares, bonds, money-market instruments, and derivative financial instruments, which are held by Chinese residents but issued by non-resident enterprises. Portfolio investment liabilities refer to shares and bonds held by non-resident enterprises but issued by resident enterprises. 2.1 Equity Securities consist of securities in the form of stocks. 2.2 Debt Securities include long- and medium-term bonds, short-term (one year or less) bonds, and money-market instruments or transferable debt instruments, such as short-term treasury notes, commercial papers, and large-sum short-term negotiable certificates of deposits. 3. Other Investment refers to all financial assets and liabilities, including trade credits, loans, currency, and deposits, as well as other assets and liabilities, but excluding direct investments, portfolio investments, and reserves assets. Long term refers to a contract period for the relevant financial assets/liabilities that is longer than one year, whereas short term refers to a contract period that is one year or less. 3.1 Trade Credits refer to direct business credit arising from the import and export of goods between China and other countries. Assets refer to the receivables of China's exporters and the advance payments by Chinas importers, and liabilities refer to the payables of Chinas importers and the advance receipts of China's exporters. 3.2 Loans refer to the external assets held by domestic institutions by providing loans and lending to overseas institutions; and liabilities refer to loans borrowed by domestic institutions, such as loans from foreign governments, loans from international institutions, loans from foreign banks, and sellerscredit. 3.3 Currency and Deposits. Assets refer to the funds deposited abroad and the foreign cash in stock held by China's financial institutions; and liabilities refer to overseas private deposits and short-term funds from foreign banks absorbed by China's financial institutions, as well as other short-term funds, for instance loans from foreign exporters and individuals. 3.4 Other Assets or Liabilities refer to investments other than trade credits, loans, currency, and deposits, for example, capital paid by non-currency international institutions and other receivables and payables. 4. Reserves Assets refer to external assets that can be used at any time and are effectively controlled by the PBOC, consisting of monetary gold, special drawing rights (SDRs), the reserves position in the fund, and foreign exchange. 4.1 Monetary Gold: refers to the gold held by the PBOC as reserve. 4.2 Special Drawing Rights is a type of ledger assets, which is allocated by the IMF according to the capital share of its members; it can be used to repay debt to the IMF and can make up for a deficit in the balance of payments between the governments of member countries. 4.3 Reserves Position in the Fund refers to assets in the ordinary accounts of the IMF that can be used freely. 4.4 Foreign Exchange refers to current assets and liabilities that are retained by the PBOC and that can be used as a means of international compensation. 2010-05-04/en/2010/0504/929.html