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Since the beginning of 2018, the State Administration of Foreign Exchange (SAFE) has implemented the spirit of the 19 CPC National Congress and the arrangements of the CPC Central Committee and the State Council, with focus on serving the real economy, defending against financial risks and deepening financial reforms. The SAFE has tightened regulations of the foreign exchange market, investigated and punished acts violating foreign exchange laws and regulations, and cracked down on false transactions and frauds. In accordance with the Regulation of the People's Republic of China on the Disclosure of Government Information (Decree No. 492 of the State Council), a selection of typical cases where foreign exchange regulations were violated are presented as follows: Case 1: Entrepot trade handled by Huaxia Bank Shanghai Branch against regulations From November 2015 to January 2016, without carrying out due diligence investigations into the authenticity of entrepot trade as required, Huaxia Bank Shanghai Branch handled the payments and purchases of foreign exchange for entrepot trade based on the false bills of lading presented. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, the bank was fined RMB 2 million and suspended from selling foreign exchange to companies for two years. Case 2: Entrepot trade handled by the Bank of Communications Xiamen Branch Qianpu Sub-branch against regulations From January to August 2016, without carrying out due diligence investigations into the authenticity of entrepot trade as required, the Bank of Communications Xiamen Branch Qianpu Sub-branch handled the payments and purchases of foreign exchange for entrepot trade based on the false bills of lading presented. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, the bank was fined RMB 6 million and suspended from selling foreign exchange to companies for three months, with senior executives and other persons directly liable for the violation ordered to take responsibility for the violation. Case 3: Entrepot trade handled by Nanyang Commercial Bank (China) Hangzhou Branch against regulations From March to August 2016, without carrying out due diligence investigations into the authenticity of entrepot trade as required, Nanyang Commercial Bank (China) Hangzhou Branch handled the payments of foreign exchange for entrepot trade based on the false or irrelevant bills of lading presented. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, RMB 1.31 million was fined and confiscated. Case 4: Entrepot trade handled by the Bank of Beijing Shanghai Branch against regulations In July 2017, without carrying out a due diligence investigation into the authenticity of entrepot trade as required, the Bank of Beijing Shanghai Branch handled the payment of foreign exchange for entrepot trade based on the bills of lading repetitively presented. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, RMB 840,000 was fined and confiscated. Case 5: Trade financing handled by the Bank of Jinzhou Dalian Branch against regulations From September to October 2015, the Bank of Jinzhou Dalian Branch handled trade financing for a company based on the Customs Report of another company. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, RMB 529,800 was fined and confiscated. Case 6: Trade financing handled by Huishang Bank Hefei Branch Tian'ehu Sub-branch against regulations From September to November 2016, Huishang Bank Hefei Branch Tian'ehu Sub-branch handled trade financing for a company based on a Customs report repetitively presented. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, RMB 400,000 was fined. Case 7: Onshore guarantees by China Minsheng Bank Xiamen Branch for offshore loans against regulations From August 2014 to December 2016, China Minsheng Bank Xiamen Branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, without carrying out required due diligence investigations with regard to qualifications of the debtors, purposes of the loans, expected sources of repayments, possibility of performing the contracts on guarantees, as well as relevant transaction backgrounds. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, a total of RMB 22.40 million was fined and confiscated, and the bank was suspended from selling foreign exchange to companies for three months. Case 8: Onshore guarantees by the Bank of Guangzhou Shenzhen Branch for offshore loans against regulations From May 2015 to January 2017, the Bank of Guangzhou Shenzhen Branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, without carrying out required due diligence investigations, with regard to qualifications of the debtors, purposes of the loans, expected sources of repayments, possibility of performing the contracts on guarantees, as well as relevant transaction backgrounds. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, a total of RMB 2.958 million was fined and confiscated. Case 9: Onshore guarantees by Xiamen International Bank Quanzhou Branch for offshore loans against regulations From June 2015 to July 2016, Xiamen International Bank Quanzhou Branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, despite the fact that the bank knew the companies' offshore loans were non-performing and it was set to perform the contracts on guarantees. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, RMB 2.80 million was fined. Case 10: Onshore guarantees by Hana Bank Guangzhou Branch for offshore loans against regulations From July to December 2015, Hana Bank Guangzhou Branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, without carrying out required due diligence investigations with regard to expected sources of repayments, and relevant transaction backgrounds. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, a total of RMB 2.1626 million was fined and confiscated, and the bank was suspended from selling foreign exchange to companies for six months, with senior executives and other persons directly liable for the violation ordered to take responsibility for the violation. Case 11: Onshore guarantees by the Bank of Tianjin No. 6 Central Sub-branch for offshore loans against regulations From January 2016 to July 2017, the Bank of Tianjin No. 6 Central Sub-branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, without carrying out required due diligence investigations with regard to expected sources of repayments, possibility of performing the contracts on guarantees, as well as relevant transaction backgrounds. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, a total of RMB 7.4025 million was fined and confiscated. Case 12: Individual foreign exchange business handled by the Bank of China Putian Branch against regulations From January 2016 to April 2017, the Bank of China Putian Branch handled split-up sales and payments of individual foreign exchange and withdrawals of foreign currency banknotes. The bank violated Article 7 and 34 of the Measures for the Administration of Individual Foreign Exchange. In accordance with Article 47 and 48 of the Regulations of the People's Republic of China on Foreign Exchange Administration, RMB 700,000 was fined. Case 13: Individual foreign exchange business handled by the Industrial and Commercial Bank of China Shenzhen Branch against regulations From October 2017 to January 2018, the Industrial and Commercial Bank of China Shenzhen Branch handled the settlements of individual foreign exchange without reviewing the valid ID certificates of individuals in China and the nature of funds as required. The bank violated Article 9 and 6 of the Measures for the Administration of Individual Foreign Exchange. In accordance with Article 47 and 48 of the Regulations of the People's Republic of China on Foreign Exchange Administration, RMB 430,000 was fined. Case 14: Foreign exchange evasion by DDBill Payment Co., Ltd. From January 2016 to October 2017, DDBill Payment Co., Ltd. went through cross-border payments of foreign exchange in the amount of USD 15.588 million, based on false logistic information. The company violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in foreign exchange evasion, which had severely disturbed the order of the foreign exchange market and led to serious consequences. In accordance with Article 39 of the Regulations, the company was fined RMB 15.308 million. Case 15: Foreign exchange evasion by PayEase (Beijing) Technology Ltd. From February 2016 to June 2017, PayEase (Beijing) Technology Ltd. went through split-up purchases and payments of foreign exchange in the amount of USD 1.59 million, based on automatic setup of the system. The company violated Article 14 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in foreign exchange evasion, which had severely disturbed the order of the foreign exchange market and led to serious consequences. In accordance with Article 39 of the Regulations, the company was fined RMB 1.0745 million. Case 16: Violations of regulations on foreign exchange administration by Alipay (China) Network Technology Co., Ltd. From January 2014 to May 2016, Alipay (China) Network Technology Co., Ltd. went through cross-border payments of foreign exchange beyond the approved scope and misstated the balance of payments. The company violated Article 6 of the Guidelines for the Pilot Program of Cross-border Payments of Foreign Exchange by Payment Institutions and Article 7 of the Measures for Declaration of Balance of Payments Statistics. In accordance with Article 48 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the company was fined RMB 600,000. Case 17: Violations of regulations on foreign exchange administration by Tenpay Payment Technology Co., Ltd. From January 2015 to June 2017, Tenpay Payment Technology Co., Ltd. handled cross-border payments of foreign exchange for non-residents without going through the filing procedures, and failed to submit the unusual risk report as required. The company violated Article 35 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 48 of the Regulations, the company was fined RMB 600,000. Case 18: Violations of regulations on foreign exchange administration by Shanghai Shengpay E-Payment Service Co., Ltd. From January 2015 to June 2017, Shanghai Shengpay E-Payment Service Co., Ltd. handled cross-border payments without abiding by relevant regulations and misstated the balance of payments. The company violated Article 9 and 6 of the Circular of the State Administration of Foreign Exchange on the Implementation of the Pilot Program of Cross-border Foreign Exchange Payment Business through Payment Institutions. In accordance with Article 39 and 48 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the company was fined RMB 625,000. Case 19: Foreign exchange evasion by Qingdao Zerui Kaimao Foreign Trade Co., Ltd. Between January and December 2016, Qingdao Zerui Kaimao Foreign Trade Co., Ltd. paid USD 16.9289 million in foreign exchange by fabricating trade backgrounds and using false contracts and invoices. The company violated Article 12 and 14 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in foreign exchange evasion, which had severely disturbed the order of the foreign exchange market and led to serious consequences. In accordance with Article 39 of the Regulations, the company was fined RMB 5.60 million. Case 20: Foreign exchange evasion by HaiKe Chemical Group Ltd. in Shandong In July 2016, HaiKe Chemical Group Ltd. in Shandong paid USD 22.9683 million in foreign exchange by fabricating entrepot trade backgrounds and using false contracts and invoices. The company violated Article 9 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in foreign exchange evasion, which had severely disturbed the order of the foreign exchange market and led to serious consequences. In accordance with Article 39 of the Regulations, the company was fined RMB 7 million. Case 21: False trade financing by Anhui Whywin International Co., Ltd. From January to December 2016, Anhui Whywin International Co., Ltd. went through procedures for trade financing that involved USD 16.6675 million in total by presenting invalid trade documents and repetitively using the trade documents. The company violated Article 12 and 14 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 40 of the Regulations, the company was fined RMB 5.25 million. Case 22: Illegal foreign exchange settlement by Nanjing Samu'er Medical Instruments Co., Ltd. From August 2013 to June 2016, Nanjing Samu'er Medical Instruments Co., Ltd. went through inward remittances of capital and settlements of foreign exchange of USD 34.60 million based on false contracts. The company violated Article 23 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in illegal foreign exchange settlements. In accordance with Article 41 of the Regulations, the company was fined RMB 4.2989 million. Case 23: Changes of the purposes of foreign exchange settlements for capital funds by Guangdong Heshan Ruishun Sales Co., Ltd. without permission From December 2016 to March 2017, Guangdong Heshan Ruishun Sales Co., Ltd. went through inward remittances of capital funds and settlements of foreign exchange of HKD 25.411 million by fabricating the purposes of the funds. By changing the purposes of foreign exchange settlements without permission, the company violated Article 23 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 44 of the Regulations, the company was fined RMB 1.125 million. Case 24: Illegal purchases and sales of foreign exchange by Mr. Zhong, native of Hunan From October 2013 to October 2016, to transfer his assets overseas without abiding by the law, Mr. Zhong transferred RMB 43.711 million into the domestic account controlled by an underground bank, exchanged the money into foreign exchange and then transferred the foreign exchange via the underground bank into his overseas account. Zhong violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered breaking the laws on the purchases and sales of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Zhong was fined RMB 3.059 million. Case 25: Illegal purchases and sales of foreign exchange by Mr. Deng, native of Sichuan From February to August 2016, to obtain illegal gains, Mr. Deng exchanged RMB into HKD or vice versa many times via an underground bank, which involved RMB 13.6235 million in total. Deng violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered breaking the laws on the purchases and sales of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Deng was fined RMB 2.0436 million. Case 26: Purchases and sales of foreign exchange by Mr. Xu, native of Sichuan, without permission In March 2017, Mr. Xu paid RMB 60 million to a domestic enterprise via a company he controlled to purchase US dollars without permission. Xu violated Article 30 of the Measures for the Administration of Individual Foreign Exchange by getting involved in the purchases and sales of foreign exchange without permission. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Xu was fined RMB 5.70 million. Case 27: Foreign exchange evasion by Mr. Zhao, native of Hebei, through split-up From January 2016 to December 2017, to transfer his assets overseas without abiding by the law, Mr. Zhao split up his personal funds, used the annual quotas of 55 individuals including his own to buy foreign exchange and transferred the foreign exchange into the overseas accounts. The funds thus transferred hit USD 2.4531 million in total. Zhao violated Article 7 of the Measures for the Administration of Individual Foreign Exchange and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Zhao was fined RMB 1.16 million. 2018-07-24/en/2018/0824/1446.html
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On the morning of August 2, the State Administration of Foreign Exchange (SAFE) held a video conferencing for the second half of 2018. The purposes of this meeting were to study and implement the arrangements of the CPC Central Committee and the State Council for the economic and financial undertakings, summarize the work of the first half, analyze the economic and financial environments both at home and abroad and the conditions of the foreign exchange market, and study and make arrangements for key tasks of foreign exchange administration for the second half. Pan Gongsheng, secretary of the CPC Leadership and administrator of the SAFE, delivered a work report. The meeting believed that in the year to date, foreign exchange authorities have studied, promoted and implemented Xi Jinping thought on socialism with Chinese characteristics for a new era and the spirit of the 19th CPC National Congress. Under the leadership of the CPC Central Committee and the State Council and the guidance of the People's Bank of China, they have implemented the requirements on Party self-governance, the general work guideline of making progress while maintaining stability, the new development philosophy and the requirements on high-quality development. With a focus on the supply-side structural reform, they have been committed to serving the development of the real economy, deepening the reform and opening up of foreign exchange administration, and guarding against risks associated with cross-border capital flows, successfully defending the economic and financial security of China. First, with political development as the top priority, foreign exchange authorities have remained committed to ensuring the "two safeguards" and stricter exercise of Party self-governance. Following the earnest intraparty political norm, they have implemented the system for collective activities within the Party. They have performed their principal responsibilities and ensured successful retrospective self-check of rectifications. With a focus on Party discipline, they have intensified management of Party officials and intensified the accountability for supervision and discipline enforcement. They have implemented the CPC Central Committee's eight-point decision on improving Party and government conduct, working ceaselessly to improve Party conduct and enforce Party discipline. Second, they have deepened the reform of delegation, regulation and service, with the levels of trade and investment liberalization and facilitation raised. They have devoted themselves to boosting the two-way opening up of the financial sector, and systematically advancing the capital account convertibility. To support the Belt and Road Initiative, they have promoted regional opening up and innovation to strengthen the roles of foreign exchange administration in serving the real economy. Third, they have been committed to guarding against risks arising from cross-border capital flows, and cracking down on violations of foreign exchange laws and regulations to safeguard the health and good order of the foreign exchange market. Fourth, they have intensified the building of operation and management capabilities of foreign exchange reserves, and continued to optimize asset arrangements to further diversify the utilization. The meeting pointed out that China's economy stayed stable and gathered momentum in the first half. The cross-border capital flows were steady, the supply and demand found a basic equilibrium in the foreign exchange market, and the receipts and payments under the current account remained reasonable, contributing to a stronger balance between the internal and external economies. Despite tremendous changes in the external environment, China's economy has achieved more resilient and higher-quality growth as the supply-side structural reform is advanced and economic restructuring is optimized. With an overall equilibrium in the balance of payments, adequate foreign exchange reserves, extensive experience and sufficient policy tools, we are confident about the stable operation of the foreign exchange market. The meeting stressed that, in the second half, foreign exchange authorities need to continue studying, promoting and implementing Xi Jinping thought on socialism with Chinese characteristics for a new era and the spirit of the 19th CPC National Congress. With thoroughly studying, fully understanding and effectively implementing the thought and the spirit as their top priority, they should maintain political integrity, think in terms of the big picture, follow the leadership core, and keep in alignment with the central Party leadership and have full confidence in the path, theory, system, and culture of socialism with Chinese characteristics, so as to make sure that they become highly aligned with the CPC Central Committee with Comrade Xi Jinping at its core in thoughts, politics and action. Following the strategic arrangements laid out at the 19th CPC National Congress, they should adhere to the general work guideline of making progress while maintaining stability, advance the supply-side structural reform, boost the two-way opening up of the financial market and ensure three breakthroughs, in a bid to promote the stability and health of China's economic growth. According to the meeting, focus should be on the following in the second half: first, with political development as the top priority, foreign exchange authorities should endeavor to ensure the leadership of the Party in foreign exchange administration. Following the political discipline and rules of the Party, they should be committed to developing the active and healthy political culture within the Party. They should conduct four forms of oversight over discipline compliance and consolidate and build on the advances made in implementing CPC Central Committee's eight-point decision on improving Party and government conduct. They should cultivate professional and high-quality officials teams who are loyal to the Party, have moral integrity, and demonstrate a keen sense of responsibility, for foreign exchange administration, so as to forever preserve their political characteristics. Second, they should deepen the foreign exchange administration reforms, and open the foreign exchange market wider to make new ground in pursuing opening-up on all fronts. They should systematically ensure the RMB capital account convertibility to guarantee the legal rights and interests of foreign investments. They should diversify the products and trading tools, increase the number of domestic and foreign participants to build an open and competitive foreign exchange market. While enhancing trade and investment liberalization and facilitation, they should support the development of new formats and models of trade and ensure sound foreign exchange administration services for the first China International Import Expo. To support the Belt and Road Initiative, they should advance the pilot programs for the reform and opening up of foreign exchange administration such as free trade zones and free trade ports. Third, they should adopt a multipronged approach to guarding against and addressing significant risks associated with foreign exchange. While establishing and improving the management framework of "macro-prudence + micro-regulation" for cross-border capital flows, they should crack down on false and fraudulent transactions, underground banks, and illegal foreign exchange trading platforms and other violations of foreign exchange laws to safeguard the sound order in the foreign exchange market and the country's economic and financial security. Fourth, they should work to ensure the security, liquidity, value growth and maintenance of foreign exchange reserves to serve government strategies. The meeting called on officials and staff of foreign exchange authorities to get united around the CPC Central Committee with President Xi Jinping at its core and follow the guidance of Xi Jinping thought on socialism with Chinese characteristics for a new era, and to bear the weight of responsibility and work diligently to make notable achievements in foreign exchange administration, and to effectively implement the decisions and arrangements of the CPC Central Committee and the State Council to deliver a good result for the upcoming 40th anniversary of reform and opening up. Members of the CPC Leadership, chief accountants, chief economists and heads of departments and units of the SAFE attended the meeting at the main venue, while members of the leaderships and department heads of SAFE branches (foreign exchange administrative departments), and heads of central sub-branches were present at local venues. 2018-08-02/en/2018/0808/1448.html
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Since the beginning of 2018, the State Administration of Foreign Exchange (SAFE) has implemented the spirit of the 19th CPC National Congress and the arrangements of the CPC Central Committee and the State Council, with focus on serving the real economy, defending against financial risks and deepening financial reforms. The SAFE has tightened regulations of the foreign exchange market, maintaining a tough stance against violations of the laws and regulations on foreign exchange, stepping up punishments and cracking down on false transactions, frauds, illegal arbitrages and other behaviors involving the departure of financial capital from the real economy into the virtual economy, so as to safeguard the healthy and good market order. In accordance with the Regulation of the People's Republic of China on the Disclosure of Government Information (Decree No. 492 of the State Council), a selection of typical cases where foreign exchange regulations were violated are presented as follows: Case 1: Entrepot trade handled by Hengfeng Bank Wenzhou Branch against regulations In January 2016, without carrying out the required due diligence investigations into the authenticity of entrepot trade, Hengfeng Bank Wenzhou Branch handled the payments of foreign exchange for entrepot trade based on the false bills of lading presented. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, it was fined RMB 1.464 million. Case 2: Entrepot trade handled by Bank of Communications Xiamen Branch Guanyinshan Sub-branch against regulations From February to July 2016, without carrying out the required due diligence investigations into the authenticity of entrepot trade, Bank of Communications Xiamen Branch Guanyinshan Sub-branch handled the sales of foreign exchange for entrepot trade based on the false bills of lading presented. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, it was fined RMB 4 million and suspended from selling foreign exchange to companies for three months, with senior executives and other persons directly liable for the violation ordered to take responsibility. Case 3: Entrepot trade handled by Bank of Tianjin Shanghai Branch against regulations From March to April 2016, without carrying out the required due diligence investigations into the authenticity of entrepot trade, the Bank of Tianjin Shanghai Branch handled the payments of foreign exchange for entrepot trade based on the false bills of lading presented. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations, the bank was fined RMB 800,000. Case 4: Onshore guarantees by HSBC Beijing Branch for offshore loans against regulations From August 2014 to June 2017, HSBC Beijing Branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, without carrying out the required due diligence investigations into the purposes of the loans and relevant transaction backgrounds. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, a total of RMB 8.4222 million was fined and confiscated. Case 5: Onshore guarantees by China Merchants Bank Xiamen Branch Jiahe Sub-branch for offshore loans against regulations From July 2014 to July 2016, China Merchants Bank Xiamen Branch Jiahe Sub-branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, without carrying out the required due diligence investigations into the qualifications of the debtors, purposes of the loans, expected sources of repayments, and relevant transaction backgrounds. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, a total of RMB 4.3319 million was fined and confiscated. Case 6: Onshore guarantees by China Minsheng Bank Xi'an Branch for offshore loans against regulations From December 2014 to December 2016, China Minsheng Bank Xi'an Branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, without carrying out the required due diligence investigations into the qualifications of the debtors, purposes of the loans, expected sources of repayments, and relevant transaction backgrounds. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, a total of RMB 6.454 million was fined and confiscated, and its senior executives and other persons directly liable for the violation were ordered to take responsibility. Case 7: Onshore guarantees by IBK (China) Tianjin Branch Xiqing Sub-branch for offshore loans against regulations From June 2015 to June 2017, IBK (China) Tianjin Branch Xiqing Sub-branch handled the payments of foreign exchange for the execution and performance of the contracts on onshore guarantees for offshore loans, without carrying out the required due diligence investigations into the qualifications of the debtors, expected sources of repayments, and relevant transaction backgrounds. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, RMB 1.022 million was fined and confiscated. Case 8: Split-up sales and payments of individual foreign exchange handled by China Construction Bank Lianjiang Sub-branch against regulations From June 2016 to June 2017, China Construction Bank Lianjiang Sub-branch handled split-up sales and payments of individual foreign exchange against regulations. The bank violated Article 7 of the Measures for the Administration of Individual Foreign Exchange. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, RMB 600,000 was fined. Case 9: Foreign exchange evasion by Solvay Biochemicals (Taixing) Co., Ltd. From November 2012 to December 2013, Solvay Biochemicals (Taixing) Co., Ltd. paid advance of EUR 2.2768 million and USD 50,500 based on the expired contracts, without importing anything. The company violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations, the company was fined RMB 923,900. Case 10: Foreign exchange evasion by Yantai Pingrui Trade Co., Ltd. From August to September 2015, Yantai Pingrui Trade Co., Ltd. paid foreign exchange of USD 17.0682 million, based on the fabricated backgrounds of the entrepot trade, the bills of lading of a third party, false contracts and invoices. The company violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations, the company was fined RMB 5.45 million. Case 11: Foreign exchange evasion by Qingdao Zhonglin Yongsheng International Trade Co., Ltd. From January to August 2016, Qingdao Zhonglin Yongsheng International Trade Co., Ltd. paid foreign exchange of USD 9.38 million, based on the fabricated backgrounds of the entrepot trade, and the bills of lading of third parties. The company violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations, the company was fined RMB 3.10 million. Case 12: Foreign exchange evasion by Shandong Hengjing Property Co., Ltd. From November 2016 to April 2017, Shandong Hengjing Property Co., Ltd. transferred USD 1.8879 million overseas based on the annual quotas of 30 Chinese citizens for buying foreign exchange. The company violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations, the company was fined RMB 644,200. Case 13: Illegal foreign exchange settlement by Changshu Zhongguan Metallic Materials Co., Ltd. From March 2015 to April 2016, Changshu Zhongguan Metallic Materials Co., Ltd. went through trade finance processes and settled foreign exchange of USD 4.18 million, with the false customs export declaration forms presented. The company violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was involved in illegal foreign exchange settlement. In accordance with Article 41 of the Regulations, the company was fined RMB 1.33 million. Case 14: Illegal purchases and sales of foreign exchange by Mr. Guo, native of Henan From April 2011 to September 2014, to transfer his assets overseas without abiding by the law, Mr. Guo transferred RMB 104.9292 million into a domestic account controlled by an underground bank, exchanged the money into foreign exchange and then transferred the foreign exchange via the underground bank into his overseas account. Guo violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered breaking the laws on the purchases and sales of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Guo was fined RMB 8.35 million. Case 15: Illegal purchases and sales of foreign exchange by Mr. Zhao, native of Zhejiang From January 2014 to June 2016, to transfer his assets overseas without abiding by the law, Mr. Zhao transferred RMB 18.0060 million into a domestic account controlled by an underground bank, exchanged the money into foreign exchange and then transferred the foreign exchange via the underground bank into his overseas account. Zhao violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered breaking the laws on the purchases and sales of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Zhao was fined RMB 1.62 million. Case 16: Illegal purchases and sales of foreign exchange by Mr. Zhao, native of Guangdong From October 2015 to September 2016, to transfer his assets overseas without abiding by the law, Mr. Zhao exchanged his money into foreign exchange and then transferred the foreign exchange via the underground bank into his overseas account. The money involved totaled USD 2.2114 million. Zhao violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered breaking the laws on the purchases and sales of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Zhao was fined RMB 797,800. Case 17: Purchases and sales of foreign exchange by Mr. Du, native of Sichuan, without approval From July to September 2016, without respecting the bank card management regulations, Mr. Du swiped his RMB cards many times via the overseas POS machines to exchange his money into HK dollars in cash. The money involved was RMB 6.7911 million. Du violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was involved in the purchases and sales of foreign exchange without approval. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Du was fined RMB 1.0187 million. Case 18: Purchases and sales of foreign exchange by Mr. Wang, native of Fujian, without approval In January 2017, to obtain illegal gains, Mr. Wang received RMB 11.2926 million through another person's account and sold HK dollars without approval. Wang violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was involved in the purchases and sales of foreign exchange without approval. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Wang was fined RMB 1.07 million. Case 19: Foreign exchange evasion by Mr. Wang, native of Sichuan, through split-up From January to April 2016, to transfer his assets overseas without abiding by the law, Mr. Wang split up his personal assets and bought foreign exchange based on the annual quotas of 46 Chinese persons for purchasing foreign exchange and then transferred the foreign exchange into the overseas accounts. The funds thus transferred totaled HKD 17.8476 million. Wang violated Article 7 of the Measures for the Administration of Individual Foreign Exchange and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Wang was fined RMB 800,000. Case 20: Foreign exchange evasion by Mr. Zhang, native of Jiangsu, through split-up From January to December 2016, to transfer his assets overseas without abiding by the law, Mr. Zhang split up his personal assets and bought foreign exchange based on the annual quotas of 41 Chinese persons for buying foreign exchange and then transferred the foreign exchange into the overseas accounts. The funds thus transferred totaled USD 1.8459 million. Zhang violated Article 7 of the Measures for the Administration of Individual Foreign Exchange and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Wang was fined RMB 615,200. Case 21: Foreign exchange evasion by Mr. Qiu, native of Jiangsu, through split-up From September 2016 to January 2017, to transfer his assets overseas without abiding by the law, Mr. Qiu split up his personal assets and bought foreign exchange based on the annual quotas of 69 Chinese persons for buying foreign exchange and then transferred the foreign exchange into the overseas accounts. The funds thus transferred totaled USD 3.4949 million. Qiu violated Article 7 of the Measures for the Administration of Individual Foreign Exchange and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, Wang was fined RMB 1.60 million. 2018-08-16/en/2018/0829/1452.html
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The People's Bank of China, the Ministry of Public Security of the PRC and the State Administration of Foreign Exchange issued the following reminder: Recently, some online platforms have been illegally engaged in foreign exchange margin transactions (also called foreign exchange security deposit, generally referring to such circumstance where customers invest in a certain amount of funds as deposit and conduct foreign exchange transactions within expanded investment amount at a certain leverage multiple), which has severely disrupted the financial order, resulted in property loss of the social public, causing adverse impacts and engendering serious potential risks: I. So far, the People's Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission as well as the State Administration of Foreign Exchange and its branches haven't approved any institution to engage in foreign exchange margin business either directly or on an agency basis. II. In accordance with the Circular on Sternly Investigating and Punishing Illegal Foreign Exchange Futures Transactions and Foreign Exchange Margin Trading Activities (Zhengjianfazi No. 165 [1994]), any unauthorized transaction of foreign exchange margin by an unapproved institution is illegal; it is also an offence for a client (organization or individual) to entrust an unapproved institution to conduct foreign exchange margin transactions (whether in foreign currency or renminbi as security deposit). III. The public should be fully aware of the risks involved in foreign exchange margin activities, improve risk prevention awareness and ability, and guard against property losses caused by illegal transactions. IV. The general public should actively report to the relevant authorities if they find clues of illegal and criminal activities. 2018-09-14/en/2018/0914/1464.html
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Since the beginning of 2018, the State Administration of Foreign Exchange (SAFE) has implemented the arrangements of the CPC Central Committee and the State Council on making breakthroughs in defending against and addressing financial risks. While deepening the reform and opening up of foreign exchange administration and supporting the development of the real economy, the SAFE has been dedicated to safeguarding the health and good order of the foreign exchange market. It has organized special inspections of key players and businesses such as banks, third-party payment institutions and entrepot trade, cracking down on behaviors violating the foreign exchange law and regulations. In the first half, it identified and dealt with 1,354 cases violating foreign exchange regulations, fined and confiscated RMB 345 million, up by 19.7% and 59.5% year on year respectively. To be specific, there were 455 cases on violating financial institutions, 340 on violating companies and 559 on violating individuals. Next the SAFE will continue to deepen the foreign exchange administration reform and boost the liberalization of the financial market to serve the new landscape of comprehensive opening up in China. It will endeavor to ensure the stability, continuity and consistency of cross-cycle foreign exchange administrative law enforcement. It will be committed to cracking down on false transactions, frauds, illegal arbitrages and other behaviors involving the departure of financial capital from the real economy into the virtual economy, as well as underground banks and illegal foreign exchange trading platforms, and other behaviors violating the law and regulations, in a bid to ensure the health and good order of the foreign exchange market and safeguard the economic and financial security in China. 2018-07-24/en/2018/0724/1447.html
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Taking a Sensible Approach to the Changes in China's Foreign Exchange Reserves By Pan Gongsheng, Deputy Governor of the People's Bank of China and Administrator of the State Administration of Foreign Exchange Foreign exchange reserve is an objective indicator of the achievements in China's reform and opening-up and its development of foreign economy, and also the result of the functioning of the balance of payments. Since the 18th CPC National Congress, China's economic development has stepped into a new normal, with the balance of payments finding an equilibrium amid fluctuations, and foreign exchange reserves registering slower growth rather than high-speed growth as it previously did, and even falling in a certain period, which should be looked at and analyzed objectively and sensibly, rather than fretfully. Foreign exchange authorities are required to refine the foreign exchange administration system, and make use of the positive roles foreign exchange reserves play in serving the real economy and maintaining China's economic and financial security, in a bid to embrace the 19th CPC National Congress with excellent performance. First, foreign exchange reserves change as a result of robust macroeconomic performance In 1992 the reform target of building a socialist market economy was set at the 14th CPC National Congress; in 2001 we joined the WTO, which injected strong impetus for the fast development of China's economy and society. Since the outbreak of the global financial crisis in 2008, China has entered into a new normal of economic development along with the changes in environment and conditions internally and externally, and its foreign exchange reserves have declined from a high level after the long-term growth. But overall, China's foreign exchange reserves remain adequate and within a reasonable range. China has taken the top spot worldwide for years for high foreign exchange reserves. Along with the establishment of the socialist market economic system and the deepening of the opening-up strategy, China has adapted to the holistic development trends of the world economy, and actively participated in the international division of labor and cooperation. In the midst of expanding opening-up, China has borne witness to rapid economic growth for consecutive years, fast expansion in foreign trade, use of foreign capital and outbound investments, and continued surpluses in the balance of payments. As a result, China's foreign exchange reserves hiked from USD 21.7 billion in the beginning of 1992 to a historical high of USD 3.99 trillion in June 2014. Statistics show that the top 10 countries/regions by foreign exchange reserves as at the end of March 2017 include China, Japan, Switzerland, Saudi Arabia, Taiwan, Hong Kong, Brazil, South Korea, India and Russia. To be specific, China's foreign exchange reserves accounted for 28% of the world's total, far higher than those of the rest of the world. China's foreign exchange reserves are characterized by cyclical changes. Since the advent of this century, China has seen two stages in the changes of its foreign exchange reserves. In the first stage, which began in 2000 and ended in 2013, a tremendous amount of global capital flew into emerging economies and sent China's foreign exchange reserves surging, from USD 154.7 billion at the beginning of 2000 to USD 3.82 trillion in 2013, representing an annual increase of more than 26%. In the second stage that began in 2014, along with the outflows of global capital from emerging economies, China's foreign exchange reserves peaked in June 2014 and dropped afterwards. China's foreign exchange reserves are adequate. However, there is no universal metric on how much foreign exchange reserve a country holds should be reasonable. In the 1950s to 1960s, the widest used metric for foreign exchange adequacy ratio was the import for 3-6 months. Later as the demand for foreign exchange reserves expanded to guarding against the inadequate debt servicing capability, the widest used metric for the adequacy ratio became the 100% short-term debt. Since 2011, the International Monetary Fund (IMF) proposed the comprehensive standard for foreign exchange adequacy ratio, based on the capital demand of every country for guarding against crises. Foreign exchange reserve is a continuous variable that dynamically changes under the impact of various factors, and therefore, in measuring whether foreign exchange reserves are at a reasonable level, the macroeconomic conditions, level of economic liberalization, capability of using foreign capital and international financing, and maturity of the economic and financial systems of a country should be taken into full consideration. In China, no matter which metric is adopted, its foreign exchange reserves are adequate and help satisfy the demand for economic and financial development. Second, foreign exchange reserves are crucial to promoting China's economic development Since the 18th CPC National Congress was held, Secretary-general Xi Jinping has proposed the thoughts of building a community of shared future for mankind, achieving mutual benefit and seeking common development in promoting opening up in all respects, based on his understanding of the current international trends of peace, development, cooperation and win win. Based on in-depth study and their understanding of Secretary-general Xi Jinping's new thoughts on opening up, foreign exchange authorities have been active in innovating and improving the foreign exchange reserve management system and utilization mechanism, and played a critical role in adjusting macro policy, serving the national strategy and maintaining financial security. Foreign exchange reserves are key to ensuring the robust performance of China's macro-economy. For the moment, China adopts the well-organized floating foreign exchange rate system that is adjusted based on the supply-demand in the market with reference to a basket of currencies. As an important stabilizer of macroeconomic performance, foreign exchange reserves play a key role in maintaining the capability of international payment, guarding against financial risks, and withstanding the impact of crises. When the global liquidity is adequate, market participants will sell the redundant foreign exchange funds to promote the growth of foreign exchange reserves. When the global liquidity tightens, market participants will hold more foreign exchange assets and reduce overseas debt, leading to lower foreign exchange reserves. Foreign exchange reserves actually function like a reservoir that avoids significant inflows and outflows of cross-border capital and resulting deviation from the economic fundamentals, and makes room for economic restructuring and industrial transformation and upgrading. The adequate foreign exchange reserves also help China withstand the significant external impact from the Asian Financial Crisis of 1997 and the global financial crisis of 2008, safeguarding China's economic and financial security. Foreign exchange reserves have effectively served the opening-up strategy. Secretary-general Xi Jinping stressed that opening up is a must at the new stage of development, with focus on cooperation and mutual benefit. Following the opening-up strategy, foreign exchange authorities have coordinated big pictures in China and the rest of the world, and expanded diversified use of foreign exchange reserves in the principle of "ensuring paid use of foreign exchange reserves with higher benefits and effective regulation in compliance with laws and regulations", providing significant amount of funds for the economic development of China and the world. In recent years, foreign exchange authorities have developed and expanded various channels such as entrusted loans and equity investment to provide foreign exchange funds to financial institutions and physical economic sectors such as commercial banks and policy banks, establishing the mechanism for use of foreign exchange reserves featuring clearly defined roles and responsibilities, definite goals, multiple tiers, and diverse products, with focus on supporting the Belt and Road Initiative, international production capacity and outfit manufacturing cooperation, enterprises going global, and imports and exports in key areas, so as to serve the development of the real economy. As the world economy is recovering slowly, and economic and trade globalization are faced with serious challenges, diversified use of foreign exchange reserves will be favorable for Chinese companies to effectively use the domestic and overseas markets and resources, facilitate the organic integration of China into the international community, and promote international cooperation in economic affairs. Reasonable utilization of foreign exchange reserves has helped achieve the goal of "letting the public hold more foreign exchange". In the face of the demand of market participants for purchasing foreign exchange and their willingness to hold foreign exchange, foreign exchange authorities have deepened the foreign exchange administration reform, yielded policy dividends, and made exchange easier, which have boosted the endeavor to let the public hold more foreign exchange. As for the holders, China has diverse forms of outbound investors such as foreign exchange reserves, China Investment Corporation, social insurance funds, financial institutions and enterprises, indicating remarkable progress has been achieved in the diversification of foreign exchange holders. From the second quarter of 2014 to the end of 2016, foreign exchange reserves in China's International Investment Position fell by around USD 1 trillion, matching with residents' net foreign assets that rose by USD 0.9 trillion, which is a direct testimony to "letting the public hold more foreign exchange". For the private sector, the foreign exchange they held in the period was to fund ODI, servicing of foreign debt, travelling and studying abroad by domestic residents. For the government sector, as foreign exchange reserves on the asset side of the central bank drop, those on the liability side will fall accordingly, showing "letting the public hold more foreign exchange" does not displace the balance in the central bank's balance sheet that adopts the double-entry bookkeeping system. Horizontally, by the third quarter of 2016, China's foreign exchange reserves as a percentage of external assets are at a reasonable and medium level among major developing countries. Vertically, as at the end of 2016, the share of the external assets held by the private sector surpassed 50% for the first time, the highest level since China began to disseminate the data on international investment position in 2004; foreign exchange reserve assets accounted for 48%, down by nearly 20 percentage points from the level of the end of 2009. This shows that China's external economic and financial exchanges are shifting from the dominance of government investments to equal investments by the public and the private sectors. It should be emphasized that China is not interested in strengthening competitiveness through currency depreciation, and does not need to do so. The central bank provides the market with foreign exchange liquidity, avoiding exchange rate overshooting and the herd effect, and safeguarding stability in the market. China's endeavor to strike a balance between enhancing exchange rate flexibility and maintaining exchange rate stability will be favorable for the international community, effectively avoiding the negative spillover effect due to the disorderly adjustment of the RMB exchange rate and the competitive depreciation among major currencies. Third, effectively use foreign exchange reserves to serve the reform and opening up, and international cooperation in economic affairs Reform and opening up is the necessary path towards national prosperity. Carrying out opening up in all respects is a key strategic step proposed by Secretary-general Xi Jinping at the new historical starting point. Foreign exchange authorities must develop the concepts of development that stress innovation, coordination, green, opening-up and sharing, with focus on accelerating the building of the new open economic system, and making full use of foreign exchange reserves' role in the construction of an open economy to make new contributions to realize the two centenary goals (namely, to complete the building of a moderately prosperous society in all respects when the Communist Party of China celebrates its centenary in 2021, and to turn China into a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious when the People's Republic of China celebrates its centenary in 2049) and the Chinese dream of the great renewal of the Chinese nation and the prosperity and development of the world economy. Foreign exchange reserves will be stabilized amid volatility. The economic and financial variables often fluctuate and develop in cycles, rather than taking the form of linear transformation. This holds true for the changes in foreign exchange reserves. Despite many uncertainties in external environment, China's economic and financial fundamentals will remain stable with strong momentum for growth in the long term, and cross-border capital flows will evolve towards an equilibrium. First, China's economy remains in the mid and high-speed growth range, and as the supply-side structural reform advances, the quality and efficiency of its economic development will be enhanced in the future. China's economic fundamentals will continue to ensure the stable position of the RMB in the global currency system, and the RMB exchange rate will remain stable at a reasonable and even level. Second, the external debt deleveraging has been basically completed and Chinese enterprises' use of external debt has rebounded since the second quarter of 2016. Third, the surplus under the current account in China has remained at the reasonable level. As anticipated by the IMF, China will continue to post surpluses under the current account in the coming five years, which will ensure the stable supply of foreign exchange in China. Fourth, as the RMB joins the SDR basket and the reform, opening-up and development of China's financial market are deepened, the RMB assets will become an important part of the global allocation of financial assets and attract foreign investors to invest in the Chinese market, and the foreign exchange under the financial account will be stably supplied. Fifth, the complementarity of currencies and asset prices in the international financial market, coupled with the diversified layout of China's foreign exchange reserves, will ensure sound diversification and be favorable for the stability of China's foreign exchange reserves. Overall, China's foreign exchange reserves will be stabilized in the midst of volatility going ahead. Further efforts shall be made to optimize the role of foreign exchange reserves in stabilizing the balance of payments. The general work guideline of making progress while maintaining stability is an important principle of the CPC in state governance and a methodology for ensuring sound economic performance. Following the logic of stable macro policy, foreign exchange authorities shall go all out to ensure stable growth and provide a favorable external environment for the stable and healthy development of the economy, and for the stability and harmony of society. In the complex and changing economic and financial environments, internally or externally, foreign exchange reserves need to recover the basic feature of maintaining the stability of the balance of payments, which is a necessary requirement for settling major contradictions and problems in China's economic development and for ensuring robust macroeconomic performance. The purpose of foreign exchange administration and utilization is to serve the economic development in China and the world, and therefore foreign exchange reserve administration and utilization shall be integrated into the big picture of the CPC and the state to align domestic development with opening up, and the domestic development with the world development, in a bid to promote common development. Following the work plans of the CPC and the State Council and the general work guideline of making progress while maintaining stability, foreign exchange authorities shall take up responsibilities and forceful measures to coordinate the diversified use of foreign exchange reserves, and invest its funds in the strategic areas that ensure the Belt and Road Initiative, international production capacity and outfit manufacturing cooperation, and to promote common development and prosperity between China and the rest of the world. The operation and administration of China's foreign exchange reserves shall be enhanced. In the principle of safety, liquidity, value preservation and growth, efforts shall be made to conduct prudent, standardized and professional investment and operation with regard to foreign exchange reserves, optimize and dynamically adjust investment portfolios and strategies, and show respect for rules and practices in international markets so as to maintain and promote the stability and development of the international financial market. (The original text is available in the 13th issue of Qiushi Journal for 2017.) 2017-07-07/en/2017/0707/1288.html
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Since the beginning of this year, the State Administration of Foreign Exchange (SAFE) has been committed to implementing the work plans and arrangements of the CPC Central Committee and the State Council. With a focus on serving the real economy, guarding against financial risks and deepening the financial reform, the SAFE has reinforced market regulation, investigated behaviors violating the laws and regulations, and cracked down on fabricated trading and frauds, thereby safeguarding the healthy and sound order in the foreign exchange market, and forestalling the systematic risks to maintain our bottom line. In accordance with the Regulations of the People’s Republic of China on the Disclosure of Government Information (Decree No. 492 of the State Council), a selection of typical cases of foreign exchange violations are announced as follows: Case 1: Evasion of foreign exchange by Guangzhou Changli Import and Export Co., Ltd. From May to July 2015, Guangzhou Changli Import and Export Co., Ltd fabricated its trading backgrounds and repeatedly used the import declarations to pay foreign exchange that amounted to USD 50.4868 million. Such behavior violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was considered evasion of foreign exchange. Involving a large amount of money, the behavior disrupted the order of the foreign exchange market with serious consequences. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 9.5239 million on the company. Case 2: Evasion of foreign exchange by Ningbo High-tech Zone Gaoan Trading Co., Ltd. In August 2015, Ningbo High-tech Zone Gaoan Trading Co., Ltd. used the bill of lading already used by other companies to pay foreign exchange worth USD 23.69 million under false entrepot trade. Such behavior violated Articles 12 and 14 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was considered evasion of foreign exchange that seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 5.87 million on the company. Case 3: Evasion of foreign exchange by LOUNIE Trade (Shanghai) Co., Ltd. In December 2015, LOUNIE Trade (Shanghai) Co., Ltd. massaged the bill of lading and illegally transferred USD 10.25 million abroad under false entrepot trade. Such behavior violated Articles 12 and 14 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was considered evasion of foreign exchange that seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 3.31 million on the company. Case 4: Evasion of foreign exchange by Ningbo Duo Fu Man Chemicals Co., Ltd. From March 2015 to November 2016, Ningbo Duo Fu Man Chemicals Co., Ltd. borrowed the bill of lading of other companies to pay USD 19.2362 million in foreign exchange. Such behavior violated Articles 12 and 14 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was considered evasion of foreign exchange that seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 3.793 million on the company. Case 5: Evasion of foreign exchange by Shandong Yongjia Group Co., Ltd. From June to September 2016, Shandong Yongjia Group Co., Ltd. fabricated bills of lading and paid USD 4.8975 million in foreign exchange. Such behavior violated Articles 12 and 14 of the Regulations of the People's Republic of China on Foreign Exchange Administration and was considered evasion of foreign exchange that seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 1.6227 million on the company. Case 6: Entrepot trade transaction handled by the Agricultural Bank of China Shanghai Branch Huangpu Sub-branch in violation of regulations From January to March 2016, the Agricultural Bank of China Shanghai Branch Huangpu Sub-branch didn't conduct the due diligence investigation into the authenticity of entrepot trade and handled the payment of foreign exchange under entrepot trade without the presentation of the effective ownership voucher by the company. Such behavior violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE ordered the sub-branch for rectification within a prescribed time limit, and imposed a penalty of RMB 1 million on it. Case 7: Entrepot trade transaction handled by the Bank of China Zhoushan Branch in violation of regulations From May to July 2016, the Bank of China Zhoushan Branch didn't conduct the due diligence investigation into the authenticity of entrepot trade and handled the payment of foreign exchange under entrepot trade without the presentation of the ownership voucher by the company. Such behavior violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration and seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE ordered the branch for rectification within a prescribed time limit, confiscated its illegal gains of RMB 216,000, imposed a penalty of RMB 1 million, and suspended its sales of foreign exchange to businesses for 6 months. Case 8: Overseas loans under domestic guarantees issued by China Minsheng Bank Quanzhou Branch in violation of regulations From September 2014 to June 2015, and from September 2015 to July 2016, China Minsheng Bank Quanzhou Branch handled foreign exchange payments without the due diligence investigation into the qualification of the debtor, sources of guarantee funds, the purposes of funds under guarantees, sources of funds for the planned repayment of borrowings, and backgrounds of related transactions in terms of signing and performing the contracts for overseas loans under domestic guarantees. Such behaviors violated Articles 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees, and seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE ordered the branch for rectification within a prescribed time limit, confiscated its illegal gains of RMB 3.041 million, and imposed a penalty of RMB 8 million on it. Case 9: Overseas loans under domestic guarantees issued by Xiamen International Bank Zhuhai Branch in violation of regulations From August 2014 to August 2015, Xiamen International Bank Zhuhai Branch handled foreign exchange purchases and payments without the due diligence investigation into the solvency of overseas debtors and the sources of funds for their repayment of borrowings, or the continuous monitoring and tracking of the purposes of the loans in terms of the signing and performance of the contracts for overseas loans under domestic guarantees. Such behaviors violated Articles 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees, and seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE confiscated its illegal gains of RMB 816,000, imposed a penalty of RMB 1 million and suspended its sales of foreign exchange to businesses for 3 months. Case 10: Overseas loans under domestic guarantees issued by OCBC Wing Hang Bank (China) Limited Beijing Branch in violation of regulations From September to October 2015 and in September 2016, OCBC Wing Hang Bank (China) Limited Beijing Branch handled foreign exchange purchases and payments without the due diligence investigation into the borrowing contracts, expected sources of funds for the repayment of borrowings, and related transaction backgrounds in terms of the signing and performance of the contracts for overseas loans under domestic guarantees. Such behaviors violated Articles 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees, and seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE ordered the branch for rectification within a prescribed time limit, confiscated its illegal gains of RMB 3.879 million, imposed a penalty of RMB 4 million and suspended its sales of foreign exchange to businesses for 3 months. Case 11: Overseas loans under domestic guarantees issued by the Industrial Bank of Korea (China) Limited Shenzhen Branch in violation of regulations From September to November 2014, and from October to November 2016, the Industrial Bank of Korea (China) Limited Shenzhen Branch handled foreign exchange purchases and payments without the due diligence investigation into the expected sources of funds for the debtors' repayment of borrowings, the likelihood of performing the guarantee contracts and related transaction backgrounds, or the continuous monitoring and tracking of the purposes of the loans in terms of the signing and performance of the contracts for overseas loans under domestic guarantees, in spite of the inconsistency between the beneficiary of the bill of lading and the buyer/seller of the trade in the documents submitted by the company. Such behaviors violated Articles 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees, and seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 47 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE ordered the branch for rectification within a prescribed time limit, confiscated its illegal gains of RMB 229,000, and imposed a penalty of RMB 2 million. Case 12: Transfer of QDII quotas by Haitong Asset Management Co., Ltd. in violation of regulations From January 2015 to June 2016, Haitong Asset Management Co., Ltd. provided investment quotas to companies without the investment qualifications for QDII in violation of the foreign exchange administration regulations on QDII investment that involved net outward remittance of USD 16.28 million. Even worse, the company submitted inauthentic evidencing materials to the foreign exchange authority. Such behavior violated Article 6 of the Regulations on Foreign Exchange Administration for Overseas Securities Investments by Qualified Domestic Institutional Investors, and seriously disrupted the order of the foreign exchange market with severe consequences. In accordance with Article 44 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE warned the company and imposed a penalty of RMB 7.75 million. Case 13: Illegal arbitrage by Lion Fund Management Co., Ltd. In October 2015, Lion Fund Management Co., Ltd. purchased and remitted out USD 2.987 million in foreign exchange under investment by QDII and then had the money remitted back after overseas settlement on the same day, in order to gain the spread in interest rates between CNY and CNH. Such behavior violated Articles 2 and 16 of the Regulations on Foreign Exchange Administration for Overseas Securities Investments by Qualified Domestic Institutional Investors, seriously disrupting the order of the foreign exchange market. In accordance with Article 40 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 950,000 on the company. Case 14: Illegal trading of foreign exchange by a Mr. Chu from Henan Between September and October 2016, in order to transfer assets overseas against the laws, Chu transferred a total of RMB 30 million in three times into a domestic account controlled by an underground bank, and remitted a total of CAD 5.91 million into his account in Canada after having the money exchanged into foreign exchange through the underground bank. Such behavior violated Article 30 of the Measures for the Administration of Individual Foreign Exchange, and was considered illegal trading of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 1.95 million on Chu. Case 15: Illegal trading of foreign exchange by a Mr. Liu from Shandong From February to August 2015, in order to transfer assets overseas against the laws, Chu transferred from his account a total of RMB 13.551 million in seven times into a domestic account controlled by an underground bank, and had his relative collect the illegal foreign exchange proceeds of AUD 2.5645 million after the remittances were exchanged through the underground bank. Such behavior violated Article 30 of the Measures for the Administration of Individual Foreign Exchange, and was considered illegal trading of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 970,000 on Liu. Case 16: Illegal trading of foreign exchange by a Mr. Zhong from Jiangxi From January to May 2016, Zhong exchanged USD 1.1533 million into RMB 7.5776 million via an underground bank and transferred the money into his domestic account. Such behavior violated Article 30 of the Measures for the Administration of Individual Foreign Exchange, and was considered illegal trading of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE warned Zhong and imposed a penalty of RMB 530,300 on him. Case 17: Illegal trading of foreign exchange by a Mr. Zheng from Macau From February 2013 to July 2015, Zheng made payments or collected receipts in RMB through his domestic personal account and collected receipts or made payments in HKD of equal value through his foreign account to convert foreign exchange for others against the laws. 33 such transactions were conducted, involving a total of RMB 65.0157 million. Such behavior violated Article 30 of the Measures for the Administration of Individual Foreign Exchange, and was considered illegal trading of foreign exchange, seriously disrupting the order of the foreign exchange market. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE warned Zheng, and imposed a penalty of RMB 3.2508 million on him. Case 18: Illegal trading of foreign exchange by a Mr. Zang from Jiangsu From April to May 2016, Zang exchanged the RMB into the banknotes of the Hong Kong dollar by making payments in RMB through the POS at a currency exchange store in Macau, which involved a total of RMB 11.746 million. Such behavior violated Article 30 of the Measures for the Administration of Individual Foreign Exchange, and was considered illegal trading of foreign exchange. In accordance with Article 45 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE warned Zang, and imposed a penalty of RMB 939,700 on him. Case 19: Evasion of foreign exchange by a Mr. Song from Inner Mongolia through split purchases of foreign exchange From July 2015 to December 2016, to illegally transfer his assets, Song used the annual quotas for individual purchases of foreign exchange of 54 persons including his family and friends to purchase foreign exchange in a split way for the fabricated purposes of studying abroad, seeking medical advice overseas and overseas trips, and then transferred the foreign exchange into his overseas account, which involved a total of USD 3.4927 million. Such behavior violated Article 7 of the Measures for the Administration of Individual Foreign Exchange, and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 683,000 on him. Case 20: Evasion of foreign exchange by a Mr. Jiang from Henan through split purchases of foreign exchange From January to April 2017, to illegally transfer his assets overseas, Jiang used the annual quotas of 55 persons for the purchases of foreign exchange to purchase foreign exchange in a split way for the fabricated purpose of overseas trips at his own expense, and then transferred the foreign exchange into his account in Hong Kong, which involved a total of USD 2.6938 million. Such behavior violated Article 7 of the Measures for the Administration of Individual Foreign Exchange, and was considered evasion of foreign exchange. In accordance with Article 39 of the Regulations of the People's Republic of China on Foreign Exchange Administration, the SAFE imposed a penalty of RMB 389,700 on him. 2017-12-01/en/2017/1201/1383.html
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The State Administration of Foreign Exchange (SAFE) has recently held the 2017 High-level Seminar for Branch Directors to implement the gist of the National Financial Work Conference, and analyze the economic and financial conditions both at home and abroad and the foreign exchange situations in China, based on the priorities of foreign exchange administration for the second half. Pan Gongsheng, secretary of the CPC Leadership and administrator of the SAFE made systematic arrangements for the implementation of the gist of the National Financial Work Conference and for the Seminar for Presidents of Branches and Sub-Branches of the People's Bank of China. Attendees include deputy directors, chief accountants, and heads of the branches of the SAFE (foreign exchange administrative departments), as well as heads of the organs and units directly under the SAFE. It was unanimously agreed at the meeting that under the leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China has achieved significant accomplishments in China's financial development and reform advancement since the 18th CPC National Congress. This national financial work conference, an important meeting held in the run-up to the 19th CPC National Congress, shows the CPC Central Committee's emphasis of the financial work. In his speech, Secretary-general Xi Jinping took a big-picture approach to analyzing the current financial situation and elaborating on the guidelines, rules and tasks for financial work under the new normal of economic development, based on the laws of financial development. He gave a comprehensive account of many key issues such as how to enhance the efficiency and level of financial services supporting the real economy, guard against systematic financial risks, be determined to deepen the financial reform and further liberalize the financial market, and refine the CPC's leadership in financial work. Therefore, this conference is an instruction and guide for ensuring a good performance in financial work, and promoting the benign circulation and healthy development of the economy and finance under the new circumstances. Premier Li Keqiang made arrangements for financial work in the new era and raised clear requirements. Deputy Premier Ma Kai made specific arrangements for implementing the gist of the National Financial Work Conference. The officials and staff in the foreign exchange administration system are required to carefully learn to develop a right and thorough understanding of the gist and arrangements and be determined to implement them. According to the conference, in the face of complicated economic and financial conditions both at home and abroad since the beginning of 2017, foreign exchange authorities have adhered to the general work guideline of making progress while maintaining stability and adapted to the new normal of foreign exchange administration under the leadership of the CPC Central Committee and the State Council as well as the CPC Committee of the People's Bank of China. They are committed to balancing the relations between facilitation and risk mitigation, effectively guarding against risks associated with cross-border capital flows while enhancing the level of foreign exchange administration serving the real economy, and therefore effectively safeguard the national economic and financial security. By deepening the reform of delegation, regulation and service, foreign exchange authorities support the stable development of foreign trade, and the two-way opening up of the financial markets. By adhering to the bottom line of foreign exchange administration in guarding against risks, they are dedicated to strengthening their capabilities in ongoing and ex-post administration, intensifying authenticity and compliance management, and cracking down against foreign exchange irregularities to ensure the health and stability of the foreign exchange market. They devote themselves to optimizing the operation and management of foreign exchange reserves to ensure the security, liquidity, value preservation and growth of foreign exchange reserves. They also enhance and improve CPC building to implement the "two responsibilities" in strengthening the Party's self-discipline in an all-round way. New achievements have been made in all respects. It was pointed out at the meeting that since the 19th CPC National Congress will be held in the second half, delivering a good performance in foreign exchange administration is of great significance. Foreign exchange authorities shall align their thoughts and actions with the judgments, decisions and arrangements of the CPC Central Committee on economic and financial conditions to strengthen their sense of responsibility, mission and urgency in foreign exchange administration. They are required to step up the implementation with a focus on serving the real economy, guarding against financial risks and deepening financial reforms. First, further promoting cross-border trade and investment facilitation to enhance the efficiency and level of foreign exchange administration serving the real economy. Foreign exchange authorities are required to duly support and ensure authentic international payments and transfers under the current account in compliance with regulations to support the development of new trading formats. They also shall support capable Chinese enterprises that meet conditions to make authentic outward investments in line with regulations, and optimize foreign exchange administration services for FDI, to create a fairer, more open and convenient business environment for both Chinese and foreign enterprises. Second, building the macro-prudential management and micro market monitoring system for cross-border capital flows. Efforts shall be made to intensify ongoing and ex-post regulation, crack down on foreign exchange irregularities such as underground banks, and guard against risks associated with cross-border capital flows to safeguard a healthy and stable foreign exchange market and China's financial stability and economic security. Third, further deepening the foreign exchange administration reform to systematically push for the two-way opening up of the financial market and convertibility under the capital account. A favorable policy environment for foreign exchange administration shall be built to better support the Belt and Road Initiative. Fourth, enhancing the operations and management of foreign exchange reserves to maintain and grow the value of foreign exchange reserves while ensuring the security and liquidity of foreign exchange reserves. According to the meeting, foreign exchange authorities must uphold the centralized and uniform leadership and the authority of the CPC Central Committee, and implement the policies, guidelines, decisions and arrangements made by the CPC Central Committee on financial work, to ensure the accurate orientation of the financial reform and development. They shall study the gist of Secretary-general Xi Jinping's speeches and his new philosophy, concepts and strategies on state governance, and strengthen their consciousness of the need to maintain political integrity, think in big-picture terms, uphold the leadership core, and keep in alignment. They also shall implement the requirements on strengthening the CPC's self-discipline, enhance education on dreams and beliefs, the spirit of the CPC, and the discipline, clean up undesirable work styles and uphold integrity, and comply with political discipline and regulations. Versatile financial talents with strong political consciousness shall be cultivated, selected and used to provide talent guarantee for the reform and development of foreign exchange administration. Officials and staff in the foreign exchange administration system are required to gather around the CPC Central Committee with comrade Xi Jinping at its core, and work hard with more courage and determination as well as a strong sense of responsibility, in an attempt to ensure sound foreign exchange administration under the new circumstances and embrace the 19th CPC National Congress with outstanding performance. 2017-07-28/en/2017/0728/1290.html
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On the afternoon of September 28, 2017, the Theory Study Central Team of the CPC Leadership of the State Administration of Foreign Exchange (SAFE) got the opportunity of celebrating the 80th anniversary since On Practice and On Contradiction were published to organize the study on philosophy and its use, along with the implementation of the gist of the National Financial Work Conference and of the speech delivered by Secretary General Xi Jinping on July 26, as well as his remarks on Party governance based on systems and regulations and intra-Party regulations and systems. At the study, which was chaired by Pan Gongsheng, Secretary of the CPC Leadership and Administrator of the SAFE, members of the CPC Leadership had in-depth discussions and exchanges concerning foreign exchange administration and thinking. Attendees of the study included officials from relevant departments of the SAFE Head Office. At the study, comprehensive and in-depth learning and discussions were held on the theoretical contributions and contemporary value of Marxist philosophy against the background of the production of On Practice and On Contradiction. The CPC Leadership of the SAFE believes that On Practice and On Contradiction by Mao Zedong are great accomplishments based on China's revolution and traditional philosophy, provide a significant philosophical basis for Marxist philosophy with Chinese characteristics, and help CPC members build a scientific worldview and methodology, playing a significant part in the history of Chinese revolution, or even in the history of the CPC, and therefore will serve a guiding role in building a socialist economy with Chinese characteristics. Since the 18th National Congress of the Communist Party of China, the CPC Central Committee with Comrade Xi Jinping at its core has focused on pressing ahead with the supply-side structural reform, and enriched and refined the new concepts, ideas and strategies on governing China, achieving remarkable progress that is of great practical and historical importance in reform, development, and stability, internal politics, diplomacy and national defense, and governance of the CPC, the country and its military forces, and making breakthroughs in reforms in key areas and links. These new practices that integrate Marxism with China's reality give a full display of the strong vitality of On Practice and On Contradiction in modern times. The SAFE's CPC Leadership stresses that CPC organizations and leaders at various levels develop a full understanding of the practical significance of studying philosophy and its use, and study classics such as On Practice and On Contradiction, to raise their awareness, sum up experience and make innovations. They shall have an in-depth understanding of the theoretical principles of Marxist epistemology and material dialectics, and of the underlying meanings of "seeking truth from facts"," proceeding from reality in all things we do", "no investigation, no right to speak", and "analysis of contradictions", to base their beliefs and convictions on the rational recognition of sciences and theories. They shall also have a profound knowledge of the rationales, basic views and methodology of Marxist philosophy, and further their understanding and grasp of the gist of important speeches by Secretary General Xi Jinping and the stance, views and methodology of Marxism laid out in the new philosophy, thinking and strategies on state governance by the CPC Central Committee. By following the experience of integrating Marxism with China's reality, they shall study and use philosophy, become more conscious of emancipating their minds and seeking truth from facts, and more ready to do things with critical thinking, and integrate Marxist stances, views and methodology with the theories, directions, guidelines and policies of the CPC and implement them in foreign exchange administration. They shall study and implement the gist of the National Financial Work Conference and understand the accomplishments in financial reform and developments in China. With a focus on "serving the real economy, guarding against financial risks and deepening financial reform", they shall analyze and understand the current economic and financial conditions, capture the principal contradictions and principal aspects of contradictions in social and economic developments, and strengthen critical and strategic thinking, to adapt to the new normal of foreign exchange administration and be poised for the upcoming 19th National Congress of the Communist Party of China with excellent performance. As emphasized by the CPC Leadership of the SAFE, the remarks of Secretary General Xi Jinping on Party governance based on systems and regulations address major issues regarding the building of intra-Party regulations and systems under the new circumstances, and show the progress of the building of intra-Party regulations and systems, key measures adopted, accomplishments already made and fresh experience accumulated by the CPC Central Committee with Comrade Xi Jinping at its core. These remarks enrich and develop the Marxist theory of Party building and provide a significant reference for enhancing the building of intra-Party regulations and systems. Party organizations of the SAFE at various levels and all Party members shall develop a comprehensive and systematic understanding of the thoughts of Xi Jinping on governing the CPC based on systems and regulations, and of the significant impact of intra-Party regulations and systems on governing the CPC based on systems and regulations, enhance the study and promotion of intra-Party regulations and systems, and boost the effective implementation of intra-Party regulations and systems so as to deepen the comprehensive and strict governance of the CPC. According to Pan Gongsheng, in the run-up to the 19th National Congress of the Communist Party of China, foreign exchange authorities shall act in strict compliance with the political discipline and norms, and raise the "four awareness" to become highly aligned with the CPC Central Committee with Comrade Xi Jinping at its core in thoughts, politics and action, and firmly uphold the authority of the CPC Central Committee. They shall intensify monitoring and analysis of foreign exchange markets and cross-border capital flows to maintain the stable performance of foreign exchange markets. They shall also keep strict confidentiality, ensure national security, and pay attention to safe production to safeguard stable operation of all business systems for foreign exchange. They shall pay close attention to market expectation management to effectively keep market confidence stable. Persistent efforts shall be made to clean up undesirable work styles, uphold integrity, combat corruption, and keep alert to corruption. The leaders shall strictly perform their responsibilities in shift work and leading teams on different shifts, to ensure efficient operation of the emergency mechanism. Moreover, a prior plan shall be made to get well prepared for the in-depth study and implementation of the gist of the 19th National Congress of the Communist Party of China. 2017-09-29/en/2017/0929/1335.html
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On August 17, the State Administration of Foreign Exchange (SAFE) held the 2017 seminar with banks and financial companies in Beijing to implement the gist of the National Financial Work Conference, analyze the current state of foreign exchange markets, and announce recent foreign exchange irregularities among banks. Pan Gongsheng, secretary of the CPC Leadership and administrator of the SAFE, delivered a speech and Yang Guozhong, deputy administrator of the SAFE, chaired the meeting, with attendees including heads of the bodies of the SAFE, policy banks, state-owned commercial banks, joint-stock commercial banks and a selection of urban commercial banks as well as financial companies. The participants in the meeting unanimously agreed that the National Financial Work Conference is a significant meeting in the run-up to the 19th CPC National Congress, and shows that the CPC Central Committee attaches great importance to financial work. In his speech, Secretary-general Xi Jinping took a holistic view to analyze the current financial conditions based on the laws of financial development, and describe the guidelines, principles and priorities of financial work under the new normal of economic development. He also gave a full account of how to enhance the efficiency and level of finance serving the real economy, proactively prevent and address systematic financial risks, be determined to deepen the financial reform and expand the liberalization of finance, and strengthen and improve the leadership of the Party in financial affairs. This speech is a key reference and guideline for how to ensure financial work, and promote benign circulation and healthy development of the economy and finance under the new circumstances. The meeting required that efforts should be made to study and implement the decisions and plans of the CPC Central Committee with Comrade Xi Jinping at its core on financial work, strengthen the consciousness of the need to maintain political integrity, think in big-picture terms, uphold the leadership core, and keep in alignment, and integrate the thoughts into the judgment of the CPC Central Committee on financial conditions. The policies and guidelines formulated by the CPC Central Committee shall be unswervingly implemented, and three tasks, namely, serving the real economy, prevention and control of financial risks and deepening the financial reform, shall be carried out, so as to create a favorable environment for the 19th CPC National Congress. According to Pan Gongsheng, China's economy has developed steadily with a more remarkable momentum for growth and market expectations have been further stabilized since the beginning of this year, boosting the strong recovery of China's foreign exchange markets, and the stability of China's cross-border capital flows. As the 19th CPC National Congress draws near, which is to be convened in the second half of this year, foreign exchange authorities will focus on serving the real economy and China's reform and opening up to further enhance cross-border trade and investment facilitation amid its efforts to serve the real economy, prevent and control financial risks and deepen the financial reform. They will also be committed to guarding against cross-border capital flow risks and safeguarding the stability of foreign exchange markets, in a bid to create a healthy, benign and stable market environment for the reform and opening up. The policy for foreign exchange administration will be focused on: first, upholding reform and opening up and refining the foreign exchange policy framework; second, boosting capital account convertibility prudentially and systematically; third, establishing a system for macro-prudential administration of cross-border capital flows and for micro market regulation; fourth, improving the RMB exchange rate formation mechanism to enhance the elasticity of the exchange rate. Pan Gongsheng stressed that, banks and financial companies, the first-line service windows for foreign exchange business and a bond for the conduction mechanism of foreign exchange policy, are crucial to sustaining the healthy development of foreign exchange markets. They are required to enhance the efficiency and level of their endeavor to serve the real economy in all respects, make the most of their roles in the allocation of foreign exchange resources, serve and support the country's opening-up strategy, and facilitate market participants' use of both domestic and foreign markets to satisfy customers' reasonable requirements for trade and investment. By following the foreign exchange administration policies, they shall refine the self-discipline mechanism for foreign exchange markets, implement the operation requirements of foreign exchange business and rationally guide market expectations. They shall also raise their awareness of internal controls, with a focus on strengthening the education on the code of internal professional ethics and on laws and regulations, intensifying management of foreign exchange workforce, performing the responsibilities for authenticity and compliance review, and work with regulators to crack down on and contain foreign exchange irregularities, in an attempt to maintain the equilibrium of the balance of payments and boost the benign circulation and healthy development of the economy and finance. Representatives of banks and financial companies present said they would work hard and be responsible to better serve the real economy, and maintain the health and stability of foreign exchange markets and the country's economic and financial security to embrace the 19th CPC National Congress with remarkable accomplishments. Following the gist of the National Financial Work Conference, Administrator Pan Gongsheng comprehensively analyzed the trends of foreign exchange markets at present and in the near future, especially the policy orientation of foreign exchange administration, namely, two directions and four connotations with a focus on foreign exchange issues in eight aspects that banks and financial companies shall pay attention to, and raised requirements on relevant tasks. With a clear orientation and specific requirements, Pan's speech shall be carefully studied and implemented. In particular, operation shall be standardized to effectively communicate foreign exchange administration policies and rationally guide market expectations. Banks and financial companies shall also work hard and discharge their responsibilities to maintain the health and stability of foreign exchange markets and China's economic and financial security, so as to be poised for the upcoming 19th CPC National Congress with significant achievements. 2017-08-17/en/2017/0817/1295.html