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The national foreign exchange administration work conference has been recently held in Beijing. At the conference, participants studied, promoted and implemented the spirit of the 19th CPC National Congress, the Central Economic Work Conference and the National Financial Work Conference, summarized the performance of foreign exchange administration over the past five years, studied the foreign exchange market conditions and concerns in foreign exchange, studied the logics and arranged for assignments regarding the foreign exchange administration reform for the moment and the near future. Pan Gongsheng, Secretary of the Party Leadership and Administrator of the State Administration of Foreign Exchange (SAFE), delivered a work report. The conference pointed out that under the leadership of the CPC Central Committee with Comrade Xi Jinping at its core and the guidance of the CPC Committee of the People's Bank of China, foreign exchange authorities have strengthened the Party's self-discipline, established and executed the new philosophy on development and deepened the foreign exchange administration reform over the past five years, based on the work arrangements of the CPC Central Committee and the State Council. They have further liberalized the foreign exchange market, supported the development of the real economy, and effectively tackled the impact on the foreign exchange market, maintaining the economic and financial security of the country. First, foreign exchange authorities have been committed to foreign exchange administration reforms and innovations. They have deepened the reform of delegation, regulation and service, achieved new progress in the capital account convertibility and the two-way liberalization of the financial market, pushed the liberalization and competitiveness of the foreign exchange market to new highs, and further enhanced cross-border trade and investment liberalization and facilitation. Second, foreign exchange authorities have prevented the risks arising from cross-border capital flows. They have improved the macro-prudential management of cross-border capital flows and micro-regulatory framework of the foreign exchange market. They have maintained a tough stance on foreign exchange irregularities to safeguard the healthy and orderly foreign exchange market. Third, foreign exchange authorities have maintained and increased the value of foreign exchange reserves while ensuring their security and liquidity, and served the national strategy by using foreign exchange reserves, providing a strong support for the Belt and Road Initiative and international production capacity cooperation. Fourth, foreign exchange authorities have been dedicated to strengthening the Party's self-discipline in all respects. New results have been achieved in the building of the Party's politics, ideology, organization, work styles, discipline and systems. Efforts have also been stepped up to build the foreign exchange administration teams. Participants at the meeting believed that by following the decisions and arrangements of the CPC Central Committee and the State Council and adhering to the general work guideline of making progress while maintaining stability, foreign exchange authorities took the initiative to press ahead with law-based administration and the reform of delegation, regulation and service, supported the development of new trading formats and enhanced trade and investment liberalization and facilitation in 2017. Also in the year, they deepened reforms in key areas and pushed forward the capital account convertibility and the development of the foreign exchange market; they raised requirements on authenticity and compliance reviews and cracked down on foreign exchange irregularities such as underground banks to safeguard the healthy and orderly development of the foreign exchange market; they improved the way of foreign exchange administration and strengthened the micro regulation capability in the foreign exchange market; they strengthened the operation and management of foreign exchange reserves to ensure their security, liquidity and the maintenance and growth of their value; they pushed forward the Party self-discipline in all respects and built professional talent teams with high qualities. As a result, new progress has been achieved in foreign exchange administration. Participants at the meeting realized that the 19th CPC National Congress kick-started the march towards socialism with Chinese characteristics for the new era, and proposed the new targets and tasks for building the modern economic system at a higher level and boosting the new landscape of full opening-up. In the new era, foreign exchange authorities should have a new look and make new contributions, making studying, promoting and implementing the spirit of the 19 CPC National Congress their top political task for the present and the near future, with a focus on developing a deep understanding of the task. They should develop "four awarenesses", build "four confidences" and ensure "four obediences" to enhance political stance and firmly safeguard the centralized leadership by CPC Central Committee. By implementing the four principles of "remaining true to the original aspiration, optimizing the structure, enhancing regulation and following market orientation", they should endeavor to ensure sound foreign exchange administration under the new circumstances. Participants at the meeting stressed that the year 2018 marks the first year of implementing the spirit of the 19th CPC National Congress and the 40th anniversary of the reform and opening up policy, and is crucial to the building of a moderately prosperous society in all respects and the implementation of the 13th Five-year Plan. Foreign exchange authorities should be united around the CPC Central Committee with Comrade Xi Jinping at its core. Under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, they should implement the requirements on the Party's self-discipline, and align their thoughts and actions with the judgments, decisions and arrangements of the CPC Central Committee regarding the economic and financial conditions. Following the general work guideline of maintaining stability while making progress, the new development philosophy and the requirements on high-quality development, they should focus on serving the real economy, controlling financial risks and deepening the financial reform. On the one hand, they should deepen the foreign exchange administration reform, and boost the two-way opening up of the financial market to serve the country's new pattern of comprehensive opening-up. On the other hand, they should work to ensure the stability of the foreign exchange market, preventing the risks associated with the cross-border capital flows, and safeguarding the security, liquidity, and value maintenance and growth of foreign exchange reserves, to guarantee economic and financial security of China, and make greater contributions to the building of a moderately prosperous society in all respects and the success in building socialism with Chinese characteristics in the new era. The priorities of foreign exchange administration for the moment and the near future were set at the meeting. First, foreign exchange authorities should unswervingly implement the requirements on the Party's self-discipline. They should support the core position of Secretary-general Xi Jinping in the CPC Central Committee and the CPC and safeguard the authority and centralized leadership of the CPC. They should study, promote and implement the spirit of the 19th CPC National Congress, and carry out educational programs under the theme of "remaining true to our original aspiration and keeping our mission firmly in mind". Focusing on the CPC's political construction, they should clean up undesirable work styles and tighten discipline and build a team of talents with firm political stance, desirable work styles and strong professional expertise, to provide political guarantee and professional support for foreign exchange administration to serve the reform and opening up. Second, they should further enhance the liberalization and facilitation of cross-border trade and investment. To be specific, they should support innovative development of foreign trade, and press ahead with the pilot program of foreign exchange administration for free trade zones. They should properly and systematically push forward the capital account convertibility, protect the legitimate rights and interests of foreign investment, and support capable and mature enterprises to make outbound investment. They should increase the transaction instruments and expand market players to build and improve the open and competitive foreign exchange markets. They should also strengthen risk education programs, guide market players to build the risk neutral awareness, and emphasize the management of foreign exchange rate risks so as to control the risks arising from external impact. Third, the regulatory capability of foreign exchange markets should be improved. Foreign exchange authorities should prevent and mitigate financial risks, and improve the two-in-one management system of macro-prudential management and micro market regulation regarding cross-border capital flows. The macro-prudential policy should be dedicated to the countercyclical adjustment of cross-border capital flows and the micro regulation policy should be devoted to maintaining the order of the foreign exchange market in accordance with the law and regulations. The implementation standards should be stable, consistent and predictable across cycles and foreign exchange irregularities should be cracked down. Fourth, infrastructures should be improved. Foreign exchange authorities should improve the laws and regulations on foreign exchange administration, with the emphasis on the basic work of the balance of payments statistics. They should also build digital foreign exchange administration platforms to improve the security of the foreign exchange administration system. Fifth, the foreign exchange reserves operation capability should be built. Foreign exchange authorities should support national strategies such as the Belt and Road Initiative and international production capacity cooperation, to ensure the security and liquidity of foreign exchange reserves and their value maintenance and increase. The conference was attended by the members of the Party Leadership of the SAFE, as well as the owners of the SAFE branches (foreign exchange administrative departments), relevant departments of the People's Bank of China and departments and units of the SAFE. 2018-02-06/en/2018/0206/1414.html
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The State Administration of Foreign Exchange (SAFE) has recently released the data on banks' foreign exchange settlement and sales and their foreign-related receipts and payments for clients for January 2018, and its press spokesperson answered media questions on recent cross-border capital flows. Q: China's cross-border capital flows found an equilibrium in 2017. What have been the trends of cross-border capital flows since the beginning of 2018? A: China has seen a basic equilibrium between foreign exchange supply and demand since the very beginning of this year. First, the balance of foreign exchange reserves has been rising. According to the data on foreign exchange reserves released on February 7, the balance of foreign exchange reserves as at the end of January stood at USD 3.1615 trillion, up by USD 21.5 billion month on month, as a result of the equilibrium in the domestic supply and demand of foreign exchange, the foreign exchange rate appreciation of non-USD currencies and changes in asset prices. Second, banks' foreign exchange sales and settlements and domestic supply and demand of foreign exchange have remained in balance. Banks' foreign exchange settlements went up by 28% year on year and banks' foreign exchange sales grew by 11% year on year in January, leading to a deficit of USD 900 million, which was down by 95% year on year, indicating slight surplus and deficit have continued to alternate. If the impact of forward trading and options trading of enterprises were taken into consideration, the domestic supply and demand of foreign exchange would have reached a basic equilibrium in January. Third, the non-banking sectors' foreign-related receipts and payments have been in surplus. In January, the non-banking sectors such as enterprises and individuals registered a surplus of USD 24.6 billion in foreign-related receipts and payments, including a surplus of USD 25.7 billion in foreign exchange capital receipts and payments. The supply and demand of foreign exchange from major channels have stayed stable. On the one hand, foreign exchange sales and settlements under trade in goods and the capital and financial accounts have continued to register surpluses. In January, the sales and settlements of foreign exchange under trade in goods for clients recorded a surplus of USD 18.7 billion, the sales and settlements of foreign exchange under the capital and financial accounts for clients registered a surplus of USD 4.2 billion. In particular, direct investment and portfolio investment recorded a surplus of USD 900 million and USD 1.9 billion respectively. On the other hand, enterprises' returns on investment and individuals' purchases of foreign exchange have remained low. In January, foreign exchange purchases under the return on investment went down by 31% month on month and 23% year on year; and individuals' purchases of foreign exchange climbed by 11% month on month, indicating more foreign exchange was used by individuals under travel before the Chinese New Year, but it declined by 12% year on year. The development trend that two-way cross-border capital flows will remain generally balanced has taken shape in China. Recently, the steady economic growth in China has gained momentum. The market views of major currencies have been rationally diverged, with stable growth expected; the RMB exchange rate has presented a trend of ups and downs and two-way fluctuations, promoting cross-border capital flows to be more stable in China, and the foreign exchange market to achieve a balance on its own. Going forward, as the supply-side structural reform goes deeper, China's economic structure will be further optimized and its momentum for endogenous growth will be strengthened, suggesting China will witness stable and rapid economic growth. Globally the economy will continue to recover, but the global financial performance and the normalization of the monetary policies of major developed economies will continue to suffer from instability and uncertainties. Under such circumstances, the two-way fluctuations of the RMB exchange rate will become a norm and the RMB exchange rate will stay basically stable at a reasonable and balanced level, which is favorable for China's cross-border capital to flow in two ways and remain generally balanced in the medium and long term. 2018-02-26/en/2018/0226/1419.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on the Balance of Payments for the fourth quarter of 2017 and the whole year. On that basis, its press spokesperson answered media questions on relevant issues. Q: Could you brief us on China's balance of payments for 2017? A: The preliminary data in the Balance of Payments for 2017 show twin surplus under the current account and the financial account (excluding reserve assets) (including net errors and omission for the fourth quarter, the same as below), and increases in reserve assets. First, a reasonable surplus was registered under the current account and foreign trade rose on a year-on-year basis. In 2017, a surplus of USD 172 billion was recorded under the current account, and its ratio to GDP for the same period was 1.4%. Trade in goods in the Balance of Payments registered a surplus of USD 476.1 billion, with exports and imports of goods rising by 11% and 16% respectively, suggesting a stronger trend for recovery and growth in foreign trade. Second, the financial account (excluding reserve assets) became a surplus. In 2017, a surplus of USD 82.5 billion was posted under the financial account (excluding reserve assets), versus a deficit of USD 475.2 billion in the comparable coverage in 2016. In particular, direct investment recorded a net inflow of USD 63.8 billion, compared with a net outflow of USD 46.6 billion in 2016. Specifically, a net outflow of USD 101.4 billion was recorded under ODI, and a net inflow of USD 165.3 billion under FDI, which were high in both directions. Third, reserve assets were on the rise. In 2017, China witnessed an increase of USD 91.5 billion in reserve assets as a result of BOP transactions (excluding non-transaction factors such as foreign exchange rates and prices), versus a decrease of USD 443.7 billion in 2016. To be specific, foreign exchange reserves climbed by USD 93 billion, while the reserve position in the IMF declined by USD 1.5 billion. Overall, China's BOP remained robust in 2017, with cross-border capital flows changing from net outflows into a basic equilibrium. As China's economy remains steady with a stronger momentum for growth, the foundation for the general equilibrium in BOP will be stronger going forward. 2018-02-08/en/2018/0208/1417.html
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Brief Table of External Debt, End-1998 （ in thousands of US dollars） Type of Debtor/Debt Loans from Foreign Governments Loans from International Financial Institutions Loans from Foreign Banks and Other Financial Institutions Buyer's Credit Loans from Foreign Exporters, Enterprises and Individuals Loans from Foreign Banks in China Bonds Issuing Abroad Deferred Payments Private Deposits from Overseas International Financial Leasing Liabilities to be Paid with Foreign Exchange in Compensation Trade Others Total Ministries of the State Council (Government Agencies) 13458833.3 22363197.4 449474 5318100 51815.1 41641419.8 Chinese-funded Banks 8937910.7 9058848.2 11611858.4 268781 160277.8 3005826 773116.2 159410.7 1170 33977198.9 Chinese-funded Non-banking Financial Institutions 3679723.9 48870.8 7547.7 889885.6 3356612.8 7520.5 17783 8007944.3 Leasing Company 943954.7 24600 24326.3 507177.6 30679.7 144032.2 1674770.5 Foreign-funded Enterprises 2936.4 560596 11071741.6 1189505.9 16820123.1 14311377.1 749747 342106.6 154140.8 7745.7 29084.8 45239105 Chinese-funded Enterprises 6477.3 30000 1334636.5 95035.6 232138 412108.1 12736371.4 141572.5 15501274.2 Others 1300 175 1475 Total 22406157.8 22953793.4 26539678.9 12969870.7 17352916.1 16280826.3 12430285.8 1710652.2 166931.2 13053497.4 149318.2 29259.8 146043187.9 FILE: Brief Table of External Debt, End-1998 2011-09-20/en/2011/0920/1411.html
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Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China show that China's foreign exchange reserves for February 2018 fell by USD 27 billion month on month. Could you brief us on the causes of such changes? What are the trends in foreign exchange reserves for the future? A: As at the end of February 2018, China's foreign exchange reserves hit USD 3.1345 trillion, down by USD 27 billion or 0.85% month on month. In February, China posted stable cross-border capital flows and trading behaviors of domestic and foreign players, indicating the foreign exchange market maintained a basic equilibrium. Under the combined impact of heightened volatility in global financial markets, adjustments in foreign exchange rates, callback of asset prices, and the depreciation of major non-USD currencies against the USD, China's foreign exchange reserves declined slightly. Currently, China's economy sustains medium and high-speed growth and the supply-side structural reform is being advanced, presenting a good picture where growth and quality, structure and benefits are mutually complementary. The development trend that two-way cross-border capital flows will remain generally balanced has taken shape in China. Looking ahead, China's economy will be capable and mature to continue stable development with a strong momentum for growth. Spurred by fundamentals, the two-way fluctuations of RMB exchange rate will become a normal, which is favorable for the two-way and generally balanced cross-border capital flows in the medium and long term. On the other hand, the global economy will continue to recover, and major central banks will tighten their monetary policies, leading to heightened uncertainties in the financial market. Under the effect of both domestic and foreign factors, China will see stable foreign exchange reserves in the future. 2018-03-07/en/2018/0307/1420.html
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Over the past four decades since the reform and opening up policy was implemented, China's foreign exchange market has grown from nothing to the large scale it is at today, with a preliminary market system that adapts to the socialist market economy established, thus playing significant roles in macro control, resource allocation, exchange rate formation and risk management. In 2017, China posted USD 24 trillion in the trading of RMB against foreign currencies in the domestic foreign exchange market. To further support financial institutions in serving the real economy and preventing risks arising from foreign exchange, the State Administration of Foreign Exchange (SAFE) has recently released the Circular on Foreign Exchange Administration for Improving Forward Foreign Exchange Sales and Settlement (Hui Fa No. 3 [2018]) (Circular). Forward foreign exchange sales and settlement are the most basic and one of the major derivatives in the domestic foreign exchange market. Starting from the key links to diversify the trading mechanism, the Circular allows gross or netting settlement as the way of delivery when the forward contract for foreign exchange sales expires, while adopting netting delivery for forward foreign exchange settlement in 2016. This marks forward foreign exchange sales and settlement has been fully market-based in market-oriented pricing, delivery and settlement, and risk management. The Circular will become effective the day it is released. Going forward, the SAFE will continue to deepen the development and liberalization of the foreign exchange market to provide support and guarantee for trade and investment facilitation. 2018-02-13/en/2018/0213/1418.html
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Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China show that China's foreign exchange reserves as of the end of January 2018 rose by USD 21.5 billion month on month. Could you brief us on the causes of such changes? What are the trends in foreign exchange reserves in the future? A: As at the end of January 2018, China's foreign exchange reserves hit USD 3.1615 trillion, up by USD 21.5 billion or 0.68% month on month. In January, China posted stable cross-border capital flows and trading behaviors of domestic and foreign players. In the global financial markets, foreign exchange reserves grew slightly under the combined impact of rises in foreign exchange rates of non-USD currencies and changes in asset prices. Going forward, China will accelerate the adjustment, optimization and upgrade of its economic structure and the economic fundamentals are expected to continue its stable growth and good momentum. As the global economy recovers, central banks will tighten their monetary policies. Boosted by fundamental factors, China's cross border capital flows and foreign exchange supply and demand will be further balanced, and the two-way fluctuations of RMB exchange rate will be more obvious. In the face of domestic and foreign economic and financial conditions, China will see stable foreign exchange reserves in the future. 2018-02-07/en/2018/0207/1416.html
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Wang Chunying, press spokesperson, chief economist and director of the Department of Balance of Payments of the State Administration of Foreign Exchange (SAFE) attended a State Council Policy Briefing held by the State Council Information Office, clarified the policies for optimizing foreign exchange administration initiatives and improving cross-border trade and investment facilitation and answered relevant media questions. The briefing started at 4pm on Friday, October 25, 2019. Xi Yanchun: Ladies and gentlemen, good afternoon! Welcome to the State Council's policy briefing. The recent State Council executive meeting proposed 12 initiatives on optimizing foreign exchange administration and improving cross-border trade and investment facilitation. To help you better understand the initiatives, we are pleased to have with us here Ms. Wang Chunying, press spokesperson, chief economist and director of the Department of Balance of Payments of the SAFE. She will clarify relevant policies and take your questions. First, let's welcome Ms. Wang for some opening remarks. 2019-10-25 16:01:34 Wang Chunying: Friends from the press, good afternoon. Welcome to today's policy briefing. First, allow me to thank you for your enduring attention and support for foreign exchange administration. On October 23, 2019, the State Council executive meeting reviewed and adopted the policies for optimizing foreign exchange administration and improving cross-border trade and investment facilitation, and relevant documents can be found on the SAFE's official website. For a start, I'd like to give you a brief introduction of the policies. Guided by the strategic arrangements made at the 19th CPC National Congress to promote comprehensive opening up and high-level trade and investment liberalization and facilitation and Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the SAFE has proactively boosted the financial supply-side structural reform to serve the high-level opening up. In the year to date, the SAFE has introduced a series of initiatives to optimize the business environment and serve the growth of the real economy, such as deepening the reform of centralized funds operations and management by MNCs, piloting the facilitation of foreign exchange receipts and payments under the capital account, removing the limits on investment quotas for QFIIs and RQFIIs, and piloting the facilitation of foreign exchange receipts and payments under trade in goods. Twelve initiatives on foreign exchange administration for boosting cross-border trade and investment facilitation were deliberated and adopted at the State Council executive meeting, including six for cross-border trade facilitation and another six for cross-border investment and financing facilitation. I. Cross-border trade facilitation initiatives First, expanding piloting for the facilitation of foreign exchange receipts and payments under trade. When processing foreign exchange receipts and payments under trade in services and trade in goods for creditworthy companies, qualified banks can optimize their processes at their discretion. The SAFE started a pilot program for this in the Guangdong-Hong Kong-Macao Greater Bay Area, Shanghai and Zhejiang at the beginning of 2019. According to pilot banks, the program can cut more than 50% off the time for document preparation and review. This time, the pilot program will be rolled out to other eligible regions with the scope expanded to include trade in services. Second, simplifying receipt and payment procedures under trade in goods for micro and small cross-border ecommerce players. Micro and small cross-border ecommerce players whose annual size of trade in goods is below USD 200,000 can be waived of registering in the directory of enterprises with foreign exchange receipts and payments under trade. This initiative is expected to benefit more than 95% cross-border ecommerce corporate customers of payment institutions. But the SAFE and banks will use scientific and technological means to verify the authenticity of foreign exchange receipts and payments under trade in goods, for the purpose of tightened ongoing and ex-post management. Third, optimizing reporting of foreign exchange service under trade in goods. Companies will no longer be required to report to foreign exchange authorities their imports and exports in the early period and corresponding foreign exchange receipts and payments. Special business like trade credit will all be reported online. Fourth, allowing discretion to open accounts pending verification for export revenues. Companies can open an account pending verification for export revenues at their discretion and recognize export revenues into foreign exchange account in simplified procedures or settle the revenues directly. Fifth, facilitating the directory registration of branches and sub-branches. Branches that need to settle foreign exchange under trade can register in the directory of enterprises involved in foreign exchange receipts and payments under trade as legal persons do. Sixth, allowing centralized management of offshore funds by engineering contractors. Engineering contractors can centralize the management of offshore funds for different engineering projects to put idle- offshore funds to work and support diversified market expansion. II. Cross-border investment and financing facilitation First, allowing non-investment-oriented foreign investors to make equity investment in China with their capital in compliance with laws. Non-investment-oriented foreign investors, or foreign investors excluding foreign investment companies, foreign venture capital investment companies and foreign equity investment companies will be allowed to make equity investment in China with their capital in compliance with laws, including setting up new subsidiaries or merging other domestic players with their capital, provided that they follow the negative list approach to market access for foreign investors and the state's macro control policies. Second, expanding piloting for the facilitation of receipts and payments under the capital account. Any pilot company can make payments in China using receipts under the capital account like capital, external debt and overseas IPO funding without presenting in advance the authenticity supporting materials on a transaction-by-transaction basis to the pilot bank, who will process following the prudential regulation principle. A pilot program has been carried out in 12 pilot free trade zones including Shanghai and Tianjin. This time, the pilot program will be expanded to include six pilot free trade zones newly established in 2019 and the whole city of Shanghai. Third, facilitating settlement and use of some foreign exchange funds under the capital account. While transferring their shares to foreign investors, domestic institutions or individuals can go through the procedures for foreign exchange settlement of the consideration for the transfer with banks, without presenting the supporting materials for the use of funds. When hitting the bid or closing a deal, the foreign investors can use the margins thus remitted for legal domestic investment contributions, payment of considerations or foreign exchange settlement, with no need to transfer the margins back. Fourth, reforming the external debt registration mechanism. External debt write-offs can be registered with banks directly, rather than foreign exchange authorities, and the one-month time limit will be removed. The transaction-by-transaction registration for external debt of non-financial enterprises will be removed first in the Greater Bay Area and Hainan, and companies in these pilot regions can register with local foreign exchange authorities in a one-off manner, and borrow, use and repay external debt, provided that the debt is less than two times the net assets. Fifth, removing restrictions on the number of foreign exchange accounts opened under the capital account. Companies can open more than one foreign exchange account under the capital account to meet their fund management needs, provided that they follow the prudential regulation requirements. Sixth, expanding piloting for the transfers of domestic credit assets. Guided by the principles of risk controllability and prudent management, a pilot program will be carried out in the Greater Bay Area and Hainan to expand the scope of credit assets that can be transferred outside China from banks' non-performing loans to trade finance. Now I'd like to take your questions. 2019-10-25 16:07:25 Xi Yanchun: Thank you, Ms. Wang. Let's move on to the Q&A session, but remember to tell us your agency before raising your questions. CCTV: I am wondering what are your considerations behind the foreign exchange policy for optimizing cross-border trade and investment facilitation at this point of time? What would you say about the significance of this reform? Thank you. 2019-10-25 16:17:54 Wang Chunying: Thank you for your question. I'd like to answer from the following perspective. Foreign trade and investment has drawn deep concern from the CPC Central Committee and the State Council. Secretary-general Xi Jinping has stressed many times that "Six Stables" including stable foreign trade and stable foreign investment should be ensured to boost trade and investment facilitation and maintain sustainable and healthy economic growth. Premier Li Keqiang has made it clear that efforts should be stepped up to achieve comprehensive opening up, attract foreign investments and propel steady improvement in foreign trade. It has been clearly stated in this year's report on the work of the government that comprehensive opening up should be encouraged to boost trade and investment liberalization and facilitation. Leaders of the State Council including Han Zheng, Hu Chunhua, Liu He and Xiao Jie have also given similar instructions. Following the decisions and arrangements of the CPC Central Committee and the State Council, the SAFE introduces 12 initiatives for the facilitation of cross-border trade and investment after thorough surveys and initial piloting, with a view to strengthening the capabilities of foreign exchange administration to serve the real economy and boost trade and investment facilitation and high-quality economic growth. This reform is purposed to deepen the reform of "combining power delegation with regulation & optimizing services" and the financial supply-side structural reform through optimizing foreign exchange administration and simplifying processes. This reform will expand the channels where the funds can be used, support domestic players to expand foreign trade and investment and improve cross-border trade and investment facilitation. Moreover, it will also reduce burdens on players, revitalize the market and yield policy dividends. In the global business environment ranking released by the World Bank yesterday, China climbed up by 15 spots to No. 31. The aforementioned facilitation initiatives will create a better business environment for domestic players and foreign investors to start businesses and make innovations. This is what we consider in introducing the initiatives and what they mean for us. Thank you. 2019-10-25 16:18:19 Economic Daily: How would this reform facilitate and support foreign trading companies amid external challenges? Thank you. Wang Chunying: To answer your question, let's look at the 12 initiatives first. With six directly about trade, these 12 initiatives are launched to increase facilitation and reduce costs for foreign trade companies. Facing the complex external environment, the SAFE has deepened the reform of "combining power delegation with regulation & optimizing services" and the financial supply-side structural reform in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, in a bid to help companies to save costs, increase the utilization efficiency of foreign exchange and support the growth of foreign trade companies. This reform will empower banks and foreign trade companies to a larger extent. The aforementioned policy adjustments, whether expanding piloting for the facilitation of foreign exchange receipts and payments under trade, or simplifying procedures for micro and small cross-border ecommerce players to handle receipts and payments under trade, or optimizing business reporting, are intended to give banks and companies more autonomy, in order to communicate a philosophy of more facilitation for companies with integrity, more convenience for micro and small enterprises, greater easiness for business reporting, more discretion for account use, more clarity of registration procedures and higher efficiency of fund use. I would here make an explanation or give you an overview. For example, when summarizing the outcomes of initial pilot for foreign exchange receipts and payments facilitation under trade in goods, pilot companies say that with substantial increase in the efficiency of foreign exchange receipts and payments, document preparation has been accelerated and labor costs have dropped. In the education program to promote that we should remain true to our original aspiration and keep our mission firmly in mind, we sought ideas from a wealth of companies, and more companies voiced their desire to join the pilot program. All this has motivated us to push ahead with this reform. While offering greater facilitation and helping save costs, these policy adjustments are designed to empower banks and foreign trade companies. In the meanwhile, we have implemented the decisions and arrangements of the CPC Central Committee and the State Council, such as deepening the reform of "combining power delegation with regulation & optimizing services" and the financial supply-side structural reform, ensuring "Six Stables" including stable foreign trade and stable foreign investment, and improving the business environment. We are also considering deepening the education program to promote that we should remain true to our original aspiration and keep our mission firmly in mind. I hope this could bring greater clarity to you. Thank you. 2019-10-25 16:37:49 China News Service: You said that piloting for the facilitation of foreign exchange receipts and payments under the capital account will be expanded based on the initial piloting. Could you brief us on the initial piloting and its impact? Thank you. 2019-10-25 16:38:11 Wang Chunying: Thank you for your question. Let me introduce the initial piloting first. According to existing regulations for foreign exchange administration, a company needs to present the authenticity supporting materials on a transaction-by-transaction basis for the bank to review the authenticity and compliance of transactions before handling the receipts and payments under the capital account (chiefly capital, external debt and overseas listing revenues). To implement the reform of "combining power delegation with regulation & optimizing services" and better serve the real economy, the SAFE has launched a pilot program for the facilitation of receipts and payments under the capital account since 2017. The highlight of the pilot program is as follows: pilot companies can make domestic payments using receipts under the capital account (including the RMB obtained from foreign exchange settlement) based on the payment orders, without the need for transaction-by-transaction reviews of transaction documents by banks. Up till now, this program has been carried out in 12 pilot free trade zones including Shanghai and Tianjin, as well as Fujian, Zhejiang, Jiangsu, Shenzhen and Ningbo. The pilot program has delivered positive results and been widely acclaimed by banks, enterprises and institutions since its launch. On the one hand, the program does have increased the facilitation of foreign exchange funds utilization by companies. As pointed out by a well-known accounting firm in the system innovation assessment of China (Zhejiang) Pilot Free Trade Zone in two years since its launch, this pilot program is one of the most highly-appraised initiatives of the five innovation achievements in deepening financial liberalization and one of the top 70 highly valuable innovative initiatives of the pilot free trade zone. On the other hand, this program has implemented the requirements of the CPC Central Committee to maintain stable foreign investments, met market players' rising demand for policy support and improved the business environment. Next, the scope of the facilitation piloting will be expanded to include six pilot free trade zones established in 2019 and the whole city of Shanghai. The SAFE will summarize its learnings to further roll out the pilot program to special economic regions with such demand and regions with flourishing foreign-related economies, and then to the entire country at a proper time. Hope this could shed some light on you. Thank you. 2019-10-25 16:38:30 Hong Kong Commercial Broadcasting: Could you kindly unveil the characteristics of foreign exchange receipts and payments in September? What will be the next steps? Thank you. 2019-10-25 16:53:10 Wang Chunying: We have elaborated on the situations at the SAFE's press conference on foreign exchange receipts and payments data just now, and the data are now available on our website. To find out relevant information, you can visit our website. For further questions, you can contact our news unit. 2019-10-25 16:53:30 Xi Yanchun: As the press conference started at 1:30 pm, relevant information has been released online, and you may have missed it on your way to this conference. You can view it when this conference is over. For further questions, we would be glad to help you. 2019-10-25 16:53:54 China Radio International of China Media Group We notice that among the cross-border investment and financing facilitation initiatives, one is about allowing non-investment-oriented foreign investors to make equity investment in China. Could you clarify this initiative in more detail? Thank you. 2019-10-25 16:54:25 One of our policies is to remove restrictions on equity investment by non-investment-oriented foreign investors with their capital in China. I suppose this is what you want to know. Let me brief you on the situation before the reform first and then we can make a comparison to find out changes after the reform. Prior to the reform, investment-oriented foreign investors could make equity investment with their capital in compliance with laws and regulations. What is an investment-oriented foreign investor? It refers to foreign investment company, foreign venture capital investment company and foreign equity investment company. Before this reform, these investment-oriented foreign investors were all eligible for making equity investment with their capital in compliance with laws and regulations and could reinvest in China with the legal profits obtained therein. Starting from 2015, the SAFE has canceled verification of reinvestment by foreign investors with profits obtained. If "investment" is included in the business scope of a non-investment-oriented foreign investor, the investor would be allowed to make equity investment in China through transfers of original currency or foreign exchange settlement. But if not, the investor would be banned from making equity investment in China. After the reform, no matter whether "investment" is included in the business scope or not, non-investment-oriented foreign investors could make equity investments in China in compliance with laws by using their capital in the original foreign currency or through foreign exchange settlement, provided that they comply with the existing special management measures on market access for foreign investors and the projects they intend to invest in in China are authentic and comply with regulations. In other words, since the introduction of this policy, all types of foreign investors can make equity investment with their capital, provided that they comply with the special management measures on market access for foreign investors and the projects they intend to invest in in China are authentic and comply with regulations. We have evaluated the effect of this policy. Of over 370,000 registered foreign-invested enterprises in China, less than 3,000 are investment-oriented, and more than 99% are non-investment-oriented, so this initiative could be of wide benefit. We believe it will significantly facilitate the use of capital and equity investment by non-investment-oriented foreign investors, especially when they invest in upstream and downstream enterprises along the industry chain. Hope this will be of some help to you. Thank you. 2019-10-25 16:55:06 South China Morning Post: My question is about the RMB capital account. Is there a schedule for full liberalization of the RMB capital account? It was previously expected that the RMB capital account would become convertible in 2020. Is it still possible? In the latest trade talks between China and the US, it is said that substantive progress has been achieved in exchange rate. Could you brief us on what consensus has been achieved? Thank you. 2019-10-25 16:58:24 Xi Yanchun: This seems a bit far from today's theme. 2019-10-25 16:58:38 Wang Chunying: And you raise two questions. As for China-US trade talks, you say that the exchange rate issue is covered in the talks. We learn that in the new round of high-level China-US trade talks, guided by the consensus between the two heads of state, the two sides had candid, efficient and constructive discussions on the economic and trade issues they both concern, with topics covering agriculture, IP protection, foreign exchange rate, financial service, expansion of trade cooperation, technology transfer and dispute settlement, in which substantial progress has been achieved. As for the RMB exchange rate, we will maintain the managed floating rate system based on market supply and demand and adjusted against a basket of currencies, so as to stabilize the RMB exchange rate at a reasonable and balanced level. This is what I want to say about the RMB exchange rate. Second, there is no schedule for the capital account liberalization, as far as I know. In other words, this is an ongoing process, where we will constantly promote the liberalization and facilitation of cross-border trade and investment to stably drive the capital account liberalization. The major considerations would be coordinating the growth stage of the economy, the situation of financial markets and the requirements for financial stability, and coordinating transactions and exchanges to press ahead with the capital account liberalization in an orderly manner and improve the facilitation of convertible items, with a focus on two-way liberalization of financial markets. We will properly expand the pilot program for foreign exchange sales and settlement by securities companies to increase the number of participants in foreign exchange markets, diversify trading products and further improve foreign exchange markets in depth, width and activeness. Second, we will support the healthy development of the STAR market, encouraging foreign investors to participate in the STAR market and ensure cross-border funds management for GDR under Shanghai-London Stock Connect. Third, we will standardize the management of domestic issuance of bonds by foreign institutions, and improve management approaches to systematically press ahead with the opening of domestic bond markets. Further, I should say that we will improve the two-in-one management framework that combines macro-prudential and micro regulation of cross-border capital flows. For macro-prudential regulation, we will tighten the monitoring early warning and response mechanism and diversify our toolkits. We will adjust market ups and downs against business cycles in an open, transparent and market-based manner. For micro regulation, we will strive to ensure the cross-cycle stability, consistency and foreseeability of policies while cracking down on false and fraudulent foreign exchange transactions. The liberalization of the capital account, I would say, is always on the road. Thank you. 2019-10-25 16:58:51 China Daily: Director Wang, you say that the SAFE will reform the registration mechanism for external debt. Could you provide more details? How will these initiatives facilitate companies? Thank you. 2019-10-25 17:08:04 Wang Chunying: The reform on external debt is chiefly about simplifying the procedures of borrowing. According to our announcements and what I said just now, this initiative covers two aspects: first, companies will register write-offs of external debt with banks directly, rather than with the foreign exchange authorities; second, removal of transaction-by-transaction registration will be piloted. They are different as one is about write-off registration, and the other is about player registration for borrowing, use and repayment. First, the external debt write-off registration reform. Companies should register write-offs of external debt with local foreign exchange authorities within one month since each debt is serviced, as per existing regulations. After this reform, this can be done directly with banks, with no one-month limit. This initiative was piloted in Guangdong, Fujian and Zhongguancun, Beijing at the end of 2018 and proved hugely beneficial. In Guangdong, for example, more than 500 write-offs involving over USD 10 billion in external debt have been registered with banks in the year to date, saving nearly 50,000km in mileage to and from the foreign exchange authorities. This is just one case of the pilot program. In the initial piloting, we found this could greatly facilitate companies and save plenty of travel costs, and therefore, this initiative is now rolled out across the board. Second, piloting of removing transaction-by-transaction registration for external debt. In 2016, the People's Bank of China and the SAFE introduced a national full-scale macro-prudential management policy for cross-border financing and canceled ex-ante approval for external debt made by companies and financial institutions. Within the upper limit for the risk-weighted balance of cross-border financing, which are two times the net assets, companies were allowed to borrow external debt on their own but needed to go through transaction-by-transaction registration with local foreign exchange authorities. In March 2019, the SAFE adopted the one-time external debt registration policy for the simplification of external debt management under centralized cross-border funds operations by MNCs, which was widely acclaimed by companies and banks. This time we plan to continue to adopt this policy for centralized cross-border funds operations by MNCs, and also carry out a pilot program in the Greater Bay Area and Hainan, allowing non-financial companies to do so. Within the registered amount, they can borrow, use and repay external debt, with inward/outward remittances and foreign exchange settlements and purchases handled with banks directly. Overall, I believe this reformative measure will further cut the cross-border financing costs. Thank you. 2019-10-25 17:08:55 ET Net: Could you share with us the considerations behind choosing the Greater Bay Area and Hainan as pilots for the removal of external debt registration and transfers of offshore credit assets? Thank you. 2019-10-25 17:17:39 Wang Chunying: We actually choose these regions as pilots for boosting cross-border trade and investment facilitation. These pilot regions, whether for cross-border trade or investment facilitation, can help to offer facilitation relevant to Hong Kong. The pilot policy for the Greater Bay Area is a case in point. In my view, the pilot policy shows our attention to the significance of the Greater Bay Area including Hong Kong across the board. Of the 12 initiatives, some have been piloted in the Greater Bay Area, such as the facilitation of foreign exchange receipts and payments under trade in goods, and some are to be piloted in the area, like removing the transaction-by-transaction external debt registration for non-financial companies. In our opinion, the Greater Bay Area, a developed export-oriented region, is frequently involved in international communications, quick to make innovations and home to some emerging modern industries, and piloting cross-border trade and investment facilitation here can unlock the area's advantages in all respects, strengthen its roles in shoring up and leading the national economic growth and opening up, and allow it to better serve the key strategic arrangements of the state. The same holds true for Hainan, a region that draws considerable attention from the CPC Central Committee and the State Council. This is why we think we should follow decisions and arrangements of the CPC Central Committee and the State Council in introducing foreign exchange administration policies and carry out pilot programs in these regions. 2019-10-25 17:18:11 Xi Yanchun: We always say that our motherland provides a strong back for Hong Kong and the prosperity of Hong Kong will drive our motherland to grow. We believe the series of facilitation initiatives unveiled by Ms. Wang will benefit Hong Kong too. Now I would like to conclude today's briefing with thanks to Ms. Wang again and thanks to you all. 2019-10-25 17:18:32 (The original text is available at www.people.com.cn) 2019-10-25/en/2019/1025/1593.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; and national Chinese-funded banks: To advance the reform of "combining power delegation with regulation & optimizing services", better serve the real economy and promote cross-border trade and investment facilitation, the SAFE decides to further optimize foreign exchange policies and measures to facilitate foreign exchange handling by market players in compliance with regulations. Relevant issues are notified as follows: I. Expanding piloting for the facilitation of foreign exchange receipts and payments under trade Piloting shall be expanded for the facilitation of foreign exchange receipts and payments under trade in goods. Based on pilot efforts in the Guangdong-Hong Kong-Macao Greater Bay Area, Shanghai and Zhejiang, efforts shall be made to provide due support to other regions to pilot the optimization of document reviews for foreign exchange receipts and payments under trade in goods, cancellation of registration for foreign exchange refunding, and simplified verification of foreign exchange payments for imports. Pilot programs shall be carried out for the facilitation of foreign exchange receipts and payments under trade in services. When processing foreign exchange receipts and payments under trade in services for creditworthy domestic institutions, qualified, prudent and compliant banks may follow the principles of "know your customers, understand your business and carry out due diligence investigation". Efforts shall also be stepped up to boost electronic filing of tax documents for foreign exchange payments under trade in services to help banks to complete digital reviews through information sharing. II. Removing restrictions on domestic equity investments by non-investment-oriented foreign investors with their capital While investment-oriented foreign investors (including foreign investment companies, foreign venture capital investment companies and foreign equity investment companies) are allowed for domestic equity investments with their capital in compliance with laws and regulations, non-investment-oriented foreign investors shall also be allowed to make domestic equity investments with their capital, provided that they comply with the existing special management measures on market access for foreign investors (negative list) and the projects they intend to invest in are authentic and comply with regulations. Where a non-investment-oriented foreign investor makes equity investment in China through transfer of capital in original currency, the invested shall register for acceptance of domestic reinvestments as required and open a foreign exchange capital account to receive the transferred money, with no need to register for the recognition of contribution in cash. Where a non-investment-oriented foreign investor makes equity investment in China with the money from the settlement of foreign exchange capital, the invested shall register for acceptance of domestic reinvestments as required and open an account pending payment after foreign exchange settlement under the capital account to receive the money. III. Expanding piloting for the facilitation of foreign exchange receipts and payments under the capital account Any eligible company in the pilot regions can make payments in China using receipts under the capital account like foreign exchange capital, external debt and overseas IPO funding without presenting in advance the authenticity supporting materials transaction-by-transaction to the bank, provided that its use of the money is authentic and complies with the existing management regulations on use of the receipts under the capital account. Pilot banks shall control the risks arising from pilot businesses following the business development principles. Local foreign exchange authorities shall intensify monitoring, analysis, ongoing and ex-post regulation. IV. Easing the restrictions on foreign exchange settlement and use under the capital account Restrictions on foreign exchange settlement and use under the domestic asset realization account shall be removed. To receive the consideration from a foreign investor for equity transfer under FDI, the domestic transferor can open an account, receive remittances and go through foreign exchange settlement with the bank directly by presenting relevant registration certificates. Restrictions on the use and foreign exchange settlement of margins by foreign investors shall be eased. When a deal is closed, margins remitted in from abroad or transferred in from domestic accounts by foreign investors can be directly used for legal domestic capital contributions or for the payment of considerations both at home and abroad. Prohibition on foreign exchange settlement in the margin account shall be removed. Margins can be directly used for foreign exchange settlements or payment when a deal is closed or deductions are made in case of default. V. Simplifying receipts and payments procedures under trade in goods for micro and small cross-border ecommerce players When payment institutions or banks handle foreign exchange receipts and payments under trade in goods according to the Circular of the State Administration of Foreign Exchange on the Issuance of Measures for the Administration of Foreign Exchange Business by Payment Institutions (Huifa No. 13, [2019]), micro and small cross-border ecommerce players whose annual cumulative foreign exchange receipts or payments under trade in goods are below USD 200,000 (exclusive) can be waived of registering in the directory of enterprises with foreign exchange receipts and payments under trade ("directory registration"). Such players will be subject to supervision and inspection by the SAFE in compliance with laws. VI. Reforming the external debt registration management Non-banking debtors shall no longer be required to register external debt write-offs with local foreign exchange authorities. Instead, such registration by non-banking debtors can be done with the bank within the jurisdiction of the local SAFE branch (or foreign exchange administrative department). No time limit shall be set for such registration. Non-financial companies shall no longer be required to go through transaction-by-transaction registration for external debt in pilot regions. In these regions, non-financial companies can register external debt amounting to two times its net assets with local foreign exchange authorities. Within that amount, such companies can borrow funds under external debt at their own discretion, directly go through inward and outward remittance or foreign exchange purchase and settlement with a bank and declare the balance of payments as required. VII. Removing restrictions on the number of foreign exchange accounts opened under the capital account Restrictions like "a maximum of three special external debt accounts for one transaction", "one special margin account for inward remittances from abroad per customer" and "one domestic asset realization account for one equity transfer per transferor" shall be removed. Market players shall be allowed to open more than one foreign exchange account under the capital account when necessary, provided that the prudent supervision requirements are met. VIII. Optimizing reporting of foreign exchange under trade in goods Enterprises shall no longer be required to report their business in the coaching period to the local foreign exchange authorities. Enterprises in the coaching period with unusual or suspicious foreign exchange receipts and payments under trade in goods shall be subject to monitoring, verification and standard classified management by the SAFE. Trade credit and trade finance can be reported online through the monitoring system (enterprise end) for foreign exchange under trade in goods, with no need to visit and report to local foreign exchange authorities (excluding special businesses under different trading companies) XI. Allowing discretion to open accounts pending verification for export revenues For revenues under trade in goods, enterprises can open an account pending verification for export revenues ("account pending verification") at their discretion. If such an account is not opened, revenues under trade in goods that have been reviewed by the bank in compliance with existing regulations can be recognized into the foreign exchange account under the current account or be settled directly. The revenue declaration sheet for the account pending verification that is currently required to be submitted to the SAFE can be waived. X. Facilitating the directory registration of branches and sub-branches When applying for directory registration, alteration or deregistration, branches or sub-branches shall go through the procedures in accordance with the current requirements on enterprises as legal persons, by presenting the original or duplicates of their own business licenses, without the need to provide the Business License for Enterprises as Legal Persons. XI. Expanding piloting for the transfer of domestic credit assets Guided by the principles of risk controllability and prudent management, the scope of players that can participate in the transfer of domestic credit assets, the channels of transfer and the scope of credit assets that can be transferred, including banks' non-performing assets and trade finance, are allowed to be expanded in pilot regions. XII. Allowing centralized management of their offshore funds by engineering contractors By registering with the SAFE, engineering contractors can open an account for centralized funds management overseas in compliance with the laws and regulations of the country or region where the account is located. The receipts in the account shall include engineering payments from overseas project owners or domestic accounts, and from the same owner's other accounts for contracted engineering projects in the same country (region). The payments in the account shall include engineering receipts remitted back to China, relevant overseas engineering payments and funds transferred into the same owner's other accounts for contracted engineering projects in the same country (region). This circular will become effective as of the date of issuance (Paragraph 2 of Article 8 will come into force as of January 1, 2020 as the monitoring system for foreign exchange under trade in goods needs upgrading). This Circular shall prevail where there are inconsistencies between previous provisions and this Circular. Upon receipt of this Circular, the branches and foreign exchange administrative departments of the SAFE shall immediately forward it to the central sub-branches, sub-branches, urban commercial banks, rural commercial banks, foreign banks, and rural credit cooperatives, and the national China-funded banks should promptly forward it to the branches under their jurisdictions. Please report any problems encountered in the implementation to the SAFE in time. Tel: 010-68402450, 68402163, 68402250 State Administration of Foreign Exchange October 23, 2019 2019-10-25/en/2019/1025/1596.html
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In October 2019, China’s international trade in goods and services recorded receipts of RMB 1617.7 billion and payments of RMB 1415.8 billion based on statistics of balance of payments (BOP), registering a surplus of RMB 201.9 billion. Specifically, trade in goods registered receipts of RMB 1484.6 billion,payments of RMB 1156.1 billion, recording a surplus of RMB 328.6 billion; trade in services recorded receipts of RMB 133.1 billion,payments of RMB 259.8 billion, resulting in a deficit of RMB 126.7 billion. In the US dollar terms, in October 2019, China's BOP-based receipts and payments of international trade in goods and services were USD 228.8 billion and USD 200.3 billion respectively, registering a surplus of USD 28.6 billion. Specifically, the receipts and payments from trade in goods were USD 210 billion and USD 163.5 billion respectively, resulting in a surplus of USD 46.5 billion. Trade in services registered receipts and payments of USD 18.8 billion and USD 36.7 billion respectively, recording a deficit of USD 17.9 billion. (End) International Trade in Goods and Services of China (Based on the BOP statistics) October2019 Item In 100 million of RMB In 100 million of USD Goods and services 2,019 286 Credit 16,177 2288 Debit -14,158 -2003 1. Goods 3,286 465 Credit 14,846 2100 Debit -11,561 -1635 2. Services -1,267 -179 Credit 1,331 188 Debit -2,598 -367 2.1 Manufacturing services on physical inputs owned by others 86 12 Credit 88 12 Debit -2 0 2.2 Maintenance and repair services n.i.e 33 5 Credit 48 7 Debit -15 -2 2.3 Transport -327 -46 Credit 252 36 Debit -579 -82 2.4 Travel -1,071 -151 Credit 218 31 Debit -1,289 -182 2.5 Construction 24 3 Credit 72 10 Debit -48 -7 2.6 Insurance and pension services -44 -6 Credit 25 4 Debit -69 -10 2.7 Financial services 7 1 Credit 20 3 Debit -13 -2 2.8 Charges for the use of intellectual property -137 -19 Credit 33 5 Debit -170 -24 2.9 Telecommunications, computer and information services 57 8 Credit 193 27 Debit -136 -19 2.10 Other business services 128 18 Credit 369 52 Debit -241 -34 2.11 Personal, cultural, and recreational services -18 -3 Credit 4 1 Debit -22 -3 2.12Government goods and services n.i.e -5 -1 Credit 8 1 Debit -13 -2 Notes: 1. The trade in goods and services in this table refers to the transactions between residents and non-residents, based on the same standard as that for BOP statement. The monthly data are preliminary and may be inconsistent with the quarterly data in the BOP statement. 2. The data on international trade in goods and services are prepared in USD, and the RMB data for the current month is derived by converting the USD data at the monthly average central parity rate of the RMB against the USD. 3. This table employs rounded-off numbers. Definition of Indicators: Goods and Services: refers to the trade in goods and services between residents and non-residents, which is based on the same standard as that for the BOP statement. 1. Goods:refers to transactions in goods whereby the economic ownership is transferred between the Chinese residents and non-residents. The credit side records export of goods, while the debit side records import of goods. The data of goods account are mainly from the customs statistics of imports and exports, but differ from the statistics of the customs mainly in the following aspects:first, the goods in the BOP statement only reflect the goods whose ownershiphas been transferred (e.g. goods under the trade modes such as general tradeand processing trade with imported materials), while the goods whose ownershipis not transferred (e.g. manufacturing services with supplied materials or with exported materials) are included in the statistics of trade in services instead of the statistics of trade in goods; second, as required by the BOP statistics, the goods imported and exported are valued on the FOB basis, but as required by the customs, the goods exported are valued on the FOB basis, whereas goods imported are on the CIF basis. Therefore, for the purpose of the BOP statistics, the international transport and insurance premiums are taken out from the value of imported goods and included in the trade in services; and third, the data on net export of goods in merchanting which are not included in the customs statistics are supplemented. 2. Services:includes manufacturing services on physical inputs owned by others,maintenance and repair services n.i.e, transport, travel,construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunications, computer and information services, other business services, personal, cultural and recreational services,and government goods and services n.i.e. The credit side records services supplied, while the debit side records services received. 2.1 Manufacturing services on physical owned by others: processoronly provides processing, assembly, packaging and other services and chargesservice fee from the owner, while the ownership of the goods is not transferred between the owner and the processor. The credit side recordsthe manufacturing services supplied by the Chinese residents on physical inputs owned by non-residents, and vice versa for debitside. 2.2 Maintenance and repair services: referto the maintenance and repair services supplied by residents to non-residentsor vice versa on goods and equipment (such as vessel, aircraft, and other transportation facility) owned by the receiving party. The credit side recordsthe maintenance and repair services supplied by the Chinese residents to non-residents, andvice versa for debit side. 2.3 Transport:refers to the process of transporting people and goods from one place to another, and the relevant supporting and auxiliary services, as well as postaland delivery services. The credit side records the international transport,postal and delivery services supplied by residents to non-residents, and vice versa for debit side. 2.4 Travel:refers to goods consumed and services purchased by travelers in various economies as non-residents. The credit side records the goods and services provided by the Chinese residents to non-residents who have stayed in China forless than one year, as well as non-residents studying abroad and seeking medical treatment for indefinite period of stay. The debit side records the goods and services purchased by the Chinese residents when traveling, studying or seeking medical services abroad from non-residents. 2.5 Construction services:refer to the establishment, renovation, maintenance or expansion of fixed assets in the form of buildings, land improvement, roads, bridges and dams and other engineering buildings of engineering nature, relevant installation,assembly, painting, pipeline construction, demolition and project management,as well as site preparation, measurement and blasting and other special services. The credit side records the construction services provided by the Chinese residents outside the economic territory. The debit side records the construction services received by the Chinese residents in the Chinese economic territory from non-residents. 2.6 Insuranceand pension services: refers tovarious insurance services and commission to agents related with insurance transaction. The credit side records the life insurance and annuity, non-life insurance, reinsurance, standardized guarantee services and relevant supporting services supplied by the Chinese residents to non-residents, and vice versa for debitside. 2.7 Financial services: refer to financial intermediation and supporting services, excluding those covered by insurance and pension services. The credit side records the financial intermediation and supporting services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.8 Charges for the use of intellectual property:refer to licensed use of intangible, non-productive / non-financial assets and exclusive rights between residents and non-residents and the licensed use of existing original works or proto types. The credit side records the intellectual property-related services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.9 Telecommunications, computer and information services: refer to communications services between residents and non-residents and transactions of services related to computer data and news, excluding commercial services delivered via telephone, computer and Internet. The credit side records the telecommunications, computer and information services supplied by residents tonon-residents, and vice versa for debit side. 2.10 Other business services: refer toother types of services between residents and non-residents, including research and development services, professional and management consulting services,technical and trade-related services. The credit side records the other business services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.11 Personal,cultural and recreational services: referto transactions of personal, cultural and recreational services between residents and non-residents, including audiovisual and related services (films,radio, television programs and music recordings) and other personal, culturaland recreational services (health, education, etc.). The credit side records the related services supplied by the Chinese residents to non-residents, and vice versa for debitside. 2.12 Government goods and services n.i.e: refer to various goods and services provided and purchased by governments and international organizations not included in other categories of goods and services. The credit side records the goods and services not included elsewhere and supplied by the Chinese residents to non-residents, and vice versa for debit side. 2019-11-29/en/2019/1129/1600.html