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· Hu Kaihong: Good morning, ladies and gentlemen. Welcome to the press conference of the State Council Information Office. Mr. Guan Tao, director of the Balance of Payments Department in the State Administration of Foreign Exchange (SAFE), has been invited to unveil data on foreign exchange receipts and payments for the first quarter of 2015 and to answer your questions. Now, let us welcome Director Guan. April 23, 2015 09:27:53 · Guan Tao: Good morning, ladies and gentlemen. Welcome to the press conference this morning. Today I am going to unveil the foreign exchange receipts and payments data for the first quarter of 2015 and take your questions on behalf of the SAFE. The economic and financial environment both at home and abroad have maintained complex since the beginning of 2015. The global economy sustains mild and unbalanced recovery, with major economies continuing to follow divergent monetary policies, and the global financial market keeps fluctuating. Domestically, China's economy is entering a new normal, featuring a slower but stable and progressive growth, and the bidirectional fluctuations of the RMB exchange rate are becoming more evident. Under such circumstances, China's cross-border capital flows are fluctuating more markedly, recently putting China under pressure from capital outflows, as a result of the domestic market players' efforts to optimize their structures of assets and liabilities denominated in the RMB and foreign currencies. April 23, 2015 09:57:39 · Guan Tao: In the first quarter of 2015, Banks settled foreign exchange of RMB 2.53 trillion (USD 412.0 billion) and sold foreign exchange of RMB 3.09 trillion (USD 503.5 billion) in 2015, with a deficit of RMB 561.9 billion (USD91.4 billion). Meanwhile, according to the data on foreign-related receipts and payments via banks, in the first quarter of 2015, banks registered cumulative foreign-related income of RMB 4.95 trillion (USD 806.8 billion) and made external payments of RMB 4.76 trillion (USD 775. 5 billion) on behalf of clients, with a surplus of RMB 190.9 billion (USD 31.2 billion) April 23, 2015 09:58:53 · Guan Tao: China’s foreign exchange receipts and payments for the first quarter show the following characteristics: First, foreign exchange settlement and sales via banks and the balance of foreign-related receipts and payments via banks on behalf of clients presented divergent trends. Excluding the impact from foreign exchange rates (the same below), in the first quarter, the foreign exchange settled by banks was down 20 percent year on year and that sold by banks was up 41 percent year on year, with a deficit of USD91.4 billion, up 97 percent from that of the fourth quarter 2014; The foreign-related receipt via banks on behalf of clients was consistent with the figure for the same period of the previous year and the external payment was up by 1 percent year on year, thus achieving a surplus of USD 31.2 billion, down by 29 percent year on year, and reversing the persistent deficits in the past two quarters. April 23, 2015 10:00:01 · Guan Tao: Second, cross-border capital flows fluctuated more markedly. The foreign exchange settled and sold via banks recorded a deficit of USD 8.2 billion in January, which rose to USD 17.2 billion in February and further to USD 66 billion in March. The foreign-related receipts and payments via banks on behalf of clients recorded a surplus of USD 36.7 billion in January, which dropped to USD 18.3 billion in February and turned into a deficit of USD 23.8 billion in March. It should be noted that cross-border capital flows fluctuated sharply in March, due to the slump of the import and export surplus in the month against the previous two months. April 23, 2015 10:01:28 · Guan Tao: Third, letting the general public hold foreign exchange continues to take effect. As a measure of the foreign exchange settlement willingness of businesses and individuals, foreign exchange settlement via banks on behalf of clients as a percentage of foreign-related foreign exchange receipts (i.e., foreign exchange settlement rate) was 69 percent, down by 3 percentage points quarter on quarter and 8 percentage points year on year. As a result, the domestic foreign exchange deposits rose by USD 78.3 billion in the same period, a year-on-year increase of USD 39.4 billion. April 23, 2015 10:02:43 · Guan Tao: Fourth, companies accelerated repayment of foreign exchange loans and external debts. In the first quarter, foreign exchange sales via banks on behalf of clients as a percentage of foreign-related foreign exchange payments (i.e., foreign exchange sales rate) that measures the motivation to buy foreign exchange registered a quarter-on-quarter increase of 6 percentage points, and the foreign exchange sales rate gained 18 percentage points year on year. The domestic foreign exchange loans rose by USD 500 million only in the same period, representing a decrease in year-on-year growth by USD 62.4 billion. The balance of cross-border financing for imports such as import bill advance by overseas institution and forward letter of credit this year was down by USD 22.7 billion, compared with an increase of USD 24.1 billion for the same period of the previous year, but the monthly average decline rate was down by 48% from the figure for the second half of 2014. Fifth, the forward settlement and sales of foreign exchange was in deficit, versus a surplus in the previous quarter. In the first quarter, the number of contracts signed between banks and clients for forward settlement of foreign exchange was down by 65 percent year on year, while the number of contracts signed for forward sales of foreign exchange was up by 34 percent, recording a deficit of USD 47 billion, compared with a surplus of USD 5.3 billion in the fourth quarter of 2014. To be specific, the forward settlement and sales of foreign exchange posted deficits of USD 5.9 billion, USD 15.4 billion and USD 25.8 billion respectively in January to March. As at the end of March, the outstanding net forward sales of foreign exchange was USD 16.1 billion, compared with net settlement of USD 12.5 billion as at the end of 2014, which suggested that banks purchased USD 28.6 billion in foreign exchange in advance from the interbank foreign exchange market in the period to hedge the exposure of forward settlement and sales of foreign exchange. In the first quarter, the spot and forward settlement and sales of foreign exchange by banks (or the total of the difference of foreign exchange settled and sold by banks and the changes in the balance of outstanding forward settlement and sales of foreign exchange), an indicator of the supply and demand for foreign exchange in the retail market, registered a deficit of USD 120 billion. April 23, 2015 10:04:17 · Guan Tao: These are the major statistical data I am going to disclose regarding foreign exchange receipts and payments during the first quarter of the year. You can also find the relevant data released on the SAFE's official website. Now I would like to take questions you might have on China’s foreign exchange receipts and payments. April 23, 2015 10:07:02 · Hu Kaihong: Thank you, Director Guan. Now please ask your questions. April 23, 2015 10:07:37 · Journalist from CCTV: Chinese banks' settlement and sales of foreign exchange has recorded persistent deficits since the second half of 2014, and increased further in the first quarter of this year. Does this mean that China is under pressure from cross-border capital outflows? What would you say about the current situation and future trends? April 23, 2015 10:09:23 · Guan Tao: Achieving basic equilibrium in our balance of payments is a key task in macro control. The SAFE has been closely watching the impact of cross-border capital flows on the balance of payments. I would like to answer your questions in three aspects: First, there are capital outflows at present. The Customs unveiled that the imports and exports recorded a surplus of USD 123.7 billion in the first quarter while the spot and forward settlement and sales of foreign exchange by banks posted a deficit of USD 120 billion, suggesting the full-scale balance of payments including those from banking and non-banking sectors must report "a surplus under the current account and a deficit under the capital account", which was consistent with what has been since the second quarter of 2014. April 23, 2015 10:11:40 · Guan Tao: Second, capital outflows are expected adjustments, which cannot be equated to illegal activities or secret capital flight. Firstly, such adjustments are expectable and show the pro-cyclical financial operation by market players. Given the greater downward pressure on the domestic economy, the global economy in profound adjustment, and the strengthening US dollar, domestic institutions and individuals continue to increase foreign currency assets and deleverage debts as they did last year, leading to the decreased spot and forward settlement of foreign exchange and increased purchases of foreign exchange. In March in particular, when the foreign trade surplus slumped, coupled with internal and external factors above-mentioned, the pressure from cross-border capital outflows for the period increased substantially. Moreover, the absolute majority of the transactions were in compliance with laws and regulations. In fact, the ratio of export income to export volume in China was 100% in the first quarter, 8 percentage points higher than the average rate of foreign exchange receipts in the previous two years, the peak season for capital inflows. April 23, 2015 10:14:46 · Guan Tao: Secondly, such adjustments can be explained and letting the general public hold foreign exchange and deleveraging debts remain the main channels for capital outflows. In the first quarter, after excluding the factor of the cross-border use of the RMB, foreign exchange receipts and payments by banks on behalf of institutions and individuals registered a deficit of USD 21.9 billion while the foreign exchange settlement and sales by banks on behalf of clients recorded a deficit of USD 79.5 billion, calculated on a comparable basis. The balance of USD 57.6 billion can be explained by the balance of USD 77.8 billion of the new foreign exchange deposits at bankshigher than the foreign exchange loans in the same period. This means that companies preferred depositing to selling foreign exchange they had, resulting in an increased deficit in foreign exchange settlement and sales. Meanwhile, companies accelerated payments for imports and repayments of debts. In the first quarter, the payments for imports both in RMB and other currencies as a percentage of the import value was 118 percent, 16 percentage points higher than the average rate for 2013 and 2014. In addition, the balance of cross-border trade finance for imports dropped by USD 22.7 billion, versus an increase of USD 24.1 billion in the same period last year. Further, as the forward settlement and sales of foreign exchange of companies changed from a surplus to a deficit, banks purchased USD 28.6 billion in foreign exchange in advance to hedge the exposure of forward settlement and sales of foreign exchange, thus further boosting the use of external assets by the banking sector for the period. April 23, 2015 10:25:15 · Guan Tao: Last but not least, such adjustments are tolerable. The foreign exchange market runs stably now and meets the control and reform targets. Equilibrium of the balance of payments, a target for macro control, does not mean balancing the budget or zero balance, but can be considered so even with some surplus or deficit. In fact, even if the preliminary transaction price of the RMB exchange rate was at or approaching the ceiling of the floating range, the supply of foreign exchange in the market would be sufficient, without triggering market panic. Although investments in funds outstanding for foreign exchange are on the decline, the central bank ensures the sufficient liquidity of the RMB through cutting interest rate and the reserve requirement, and targeted control, and therefore, the financing cost is declining. As the central bank drastically cut the required deposit reserve ratio on April 20, the interest rate has plummeted against the beginning of the year. Further, China has long been encouraging companies and individuals to hold and use foreign exchange as much as possible. Latest data show that official international reserve assets accounted for 61 percent of China's external financial assets by the end of 2014, down by 4 percentage points from the end of 2013, which also means that a growing amount of foreign exchange assets have been held by market players, an apparent shift from centralized holding by the state. April 23, 2015 10:36:02 · Guan Tao: Third, the cross-border capital flows in China will continue to fluctuate in the future. On the one hand, if the factors that led to capital outflows in the first quarter continue to take effect, this outflow trend will likely persist. On the other hand, as the reform and opening up policy pays more and more dividends and the national fine tuning measures take effect, China's economy will remain resilient, boasting strong potential and large room of maneuver, with no fundamental changes in the fundamentals to sustain a rational impetus for growth and big room for improvement in the overseas demand for the RMB assets allocation, which will be strong support to a stabilized RMB exchange rate and equilibrium of the balance of payments. Externally, although the US economy maintains a strong momentum for recovery, yet the recent uncertain performance of some economic indicators indicates that there will likely be large uncertainties in the monetary policy adjustment in the US and the trends in the USD exchange rate. Further, the recent rapid growth in the purchases of foreign exchange in China is a result of purchasing foreign exchange in advance to avert foreign exchange rate risks, or preventative purchases of foreign exchange, by some enterprises. Given their future demand for external payments, they unleashed it in advance and may not buy foreign exchange again in the future. To sum up, if positive changes occur to both domestic and international market environment, cross-border capital outflows will slow down, or even be replaced by net inflows. In fact, as the domestic and international environment have become more favorable since the end of March, the shortfall of foreign exchange between supply and demand in China has been made up quickly and the spread in the RMB exchange rate both at home and abroad has dropped significantly. April 23, 2015 10:50:21 · Guan Tao: Generally speaking, the key takeaways are as follows: first, there are capital outflows in China now; second the capital outflows are expected sequenced adjustments, which cannot be simply equated to illegal activities or secret capital flight; third, the future cross-border capital flows in China will continue to fluctuate. April 23, 2015 11:04:14 · Journalist from China News Service: The IMF pointed out at its recent annual spring meeting that the US dollar has grown dramatically recently, hitting a new high since 1981, and warned that the interest rate increase by the FED will likely trigger super taper tantrum. What's your idea of this? What impact will this have on China's cross-border capital flows? April 23, 2015 11:06:11 · Guan Tao: This spillover effect mentioned by the IMF does exist at present and is an alert to the emerging economies that have borrowed heavily in the global market, especially in US dollars. We have been closely watching, tracking and assessing the impact of this on China's cross-border capital flows, especially on the security of its external debts. So far we have concluded in three aspects as follows: April 23, 201511:09:43 · Guan Tao: First, the impact of the normalization of the US' monetary policy and the appreciation of the US dollar on China's cross-border capital flows is becoming more evident but limited on the whole. In the past, interest rate rise in the US and USD appreciation were the key causes of debt crisis and monetary crisis in emerging markets. In mid-2013, the FED aroused the expectations of QE tapering, triggering capital outflows and currency depreciation in emerging markets, while China witnessed massive capital inflows and significant growth in foreign exchange reserves. In 2014, the FED exited the QE policy and successfully stopped buying bonds by the end of the year, thus impacting the emerging markets again, including China where cross-border capital inflows at the beginning of the year were replaced by outflows but net inflows of capital and growth in foreign exchange reserves were sustained for the whole year. Since the beginning of this year, the interest rate rise by the FED and the accelerated USD appreciation, among other things, have somehow facilitated the cross-border capital outflows in China, but this is still the expected sequenced adjustment. April 23, 201511:13:23 · Guan Tao: Second, China is fully confident in and capable of resisting external impacts, but could not ignore related risks. Featuring a large economic size, a large surplus in trade in goods, sufficient foreign exchange reserves and increased elasticity of the RMB exchange rate, China has large room of maneuver. According to the indicators for risks associated with China's external debts in foreign currencies, all the external debt security indicators except the percentage of short-term external debts are below the international warning level, suggesting China's external debts are secure. Further, to adapt to the changes, domestic enterprises have recently begun actively adjusting their assets and liabilities structures to reduce external debts. The latest statistical data show that China's balance of external debts in foreign currencies amounted to USD 895.5 billion as at the end of 2014, down by USD 11.8 billion from the end of June 2014, or up by 2.5 percent year on year, which was down by more than 10 percentage points from the average growth rate for 2009-2013. This was positive adjustment by enterprises, with no widespread difficulty in solvency in the process. But it was true that some enterprises were heavily burdened with external debts and mismatch between durations and currencies, with their solvency highly related to their financial positions. We have reiterated that overall debt security does not mean zero debt risks to individuals and requires that enterprises should make external borrowings based on their needs and take appropriate measures to hedge exchange rate exposures. April 23, 201511:19:27 · Guan Tao: Third, China should work domestically and externally to actively respond to challenges. The impact of the FED's normalization of the monetary policy diverges by countries in the emerging markets, i.e., limited impact on those with good fundamentals while heavy impact on those with poor fundamentals. The reason why the impact of the adjustment is tolerable on the whole in China is that with stable economic growth and domestic prices, current account surplus, and sufficient foreign exchange reserves, China is regarded as an emerging market with good performance. The key to responding to the challenges from the likely interest rate rise and adjustment of the USD exchange rate is that China should focus on its domestic business by ensuring the economy runs stably within a rational range, and possible risks and problems arising from an economic downturn be properly addressed, so as to keep enhancing and strengthening the confidence in China's economy in the market. Foreign exchange authorities should focus on three aspects of work: First, promoting the reform by continuing to press ahead with trade and investment facilitation to accelerate the cultivation and development of external markets; second, guarding against risks by accelerating the building of an external debt and capital flow management system under the macro-prudential management framework and improving relevant plans to actively respond to the risks arising from cross-border capital flows; third, consolidating the foundation by improving the statistical monitoring of cross-border capital flows, keeping enhancing the data transparency and intensifying education to market players to guide them to control risks rationally. April 23, 201511:29:17 · Journalist from the Economic Daily: The foreign exchange settlement and sales in the first quarter of this year presented a deficit. In the context of cross-border capital outflows, will the SAFE take some measures to control the outflows? April 23, 201511:40:30 · Guan Tao: This is a question of wide concern. We introduced some temporary measures in face of the pressure from capital inflows but currently will not adopt new measures to control outflows, but actively respond to the challenges from abnormal fluctuations of cross-border capital flows in the following three aspects: First, enhancing monitoring and keen observation. The capital outflows, mainly through channels such as letting people hold foreign exchange and payments of external debts, are expected sequenced adjustments at present. As the balance of payments and the RMB exchange rate are balanced and rationalized, cross-border capital may sometimes flow out and sometimes flow in, which will be a new normal, with changes becoming more and more frequent. We should look at it in a rational way and not overanalyze it. Based on the real situation, foreign exchange authorities will further enhance monitoring and analysis of cross-border capital flows, streamline the new situation of and the new changes in cross-border capital flows to immediately assess the situation and provide warnings for reference by decision makers. Second, attaching equal importance to streamlining and controlling and promoting balanced management. On the one hand, by capturing the opportunity arising from the equilibrium of the balance of payments and the supply and demand of foreign exchange, the temporary measures preliminarily introduced to control inflows should be promptly adjusted and the foreign exchange system reform should be deepened further. Since the end of last year, the foreign exchange authorities have introduced a policy that decouples the foreign exchange loan-to-deposit ratio from the overall position of foreign exchange settlement and sales to expand the floor of the overall position of foreign exchange settlement and sales of banks, promoted across the country the reform on voluntary settlement of foreign exchange by foreign-invested enterprises and increased the overall scale of the quotas for outstanding short-term external debts of domestic financial institutions, among other things. These measures are objectively favorable for hedging the pressure from capital outflows. On the other hand, the current situation has triggered the regulatory policy for the direction of capital outflows, which is based on existing policies, not new measures. For example, the special inspection regarding export without receiving foreign exchange is conducted to intensify regulation of splitting purchases and payments of foreign exchange by individuals and crack down on foreign exchange irregularities like underground banks. April 23, 201511:41:44 · Guan Tao: Third, improving plans and increasing tools. Cross-border capital flows will possibly continue to fluctuate in the future due to many uncertainties and instabilities. Under such circumstances, scenario analysis and stress test should be conducted to design policies for different situations and to respond to various possibilities. Efforts should also be made to actively guard against the impact from cross-border capital flows, stick to the bottom line to ensure no systematic and regional financial risks occur, accelerate building the external debts and capital flow management system under the macro-prudential framework and keep increasing the policies and tools relating to counter-cyclical adjustment. Thank you. April 23, 201511:53:08 · Journalist from China Financial and Economic News: You said just now that the current changes in foreign exchange situation reflected the optimization of the assets and liabilities structures of market players. Could you recount what has been optimized? And what would you say about the commentary of the press that the "one belt one road" strategy may lead to changes in China's foreign exchange strategy? April 23, 201512:03:01 · Guan Tao: For your first question, the assets and liabilities structures of market players are optimized in the following two ways: First, letting people hold foreign exchange. Enterprises used to sell their foreign exchange to banks, which then sold the foreign exchange in the interbank foreign exchange market to increase foreign exchange reserves. Currently, however, market players hold and use foreign exchange themselves. For example, according to the international investment position data, the official international reserve assets as a percentage of external assets dropped last year, suggesting a growing proportion of foreign exchange assets is held by market players, not the central bank. Second, paying debts. In the past, as the RMB exchange rate appreciated unilaterally and the positive carries between the domestic currency and foreign currencies remained large, many enterprises borrowed heavily. But now as the situation changes, the bidirectional fluctuation of the RMB exchange rate has become more evident and the interest rate spread between the domestic currency and foreign currencies has been adjusted, many enterprises are accelerating payments of external debts. April 23, 201512:04:06 · Guan Tao: As for the second question, I would like to clarify that, first, the "one belt one road" strategy is not a one-way but a bidirectional opening up strategy, encouraging both "going global" and "bringing in". While supporting SOEs to expand overseas investments through the strategy, China encourages overseas capital to invest in China; and while encouraging driving exports of homemade products through overseas investments, China actively promotes imports from other countries, which are a key part of Chin's new open economy system. By capturing this opportunity, foreign exchange authorities should keep facilitating trade and investments. Second, foreign exchange reserve management should be aligned with the implementation of the "one belt one road" strategy. China has made some beneficial attempts in expanding the channels to use foreign exchange reserves. Of the USD 10 billion in initial capital for the Silk Road Fund, launched at the end of last year, foreign exchange reserves contributed 65%. In the future, new measures will be introduced for diversified use in foreign exchange reserve management to coordinate with the implementation of the national strategy and enhance the benefits from using foreign exchange reserves. April 23, 201512:18:27 · Journalist from NHK: In terms of the ownership of US treasury, Japan has recently surpassed China as the largest creditor of the US. What would you say about this? My second question is what's your view on the RMB internationalization according to the recent cross-border capital flows, such as the impact of cross-border capital outflows and the RMB depreciation against the USD? April 23, 201512:28:57 · Guan Tao: I would like to answer your first question in three aspects: First, the US treasury bonds held by foreign exchange reserves are just a part of the US treasury bonds held by China that have been released by the US Department of the Treasury. Since we don't know the statistical methods and coverage used by the US, we cannot comment on the data. Second, it is a normal investment behavior that the foreign exchange reserves operating organs buy or sell the US treasury bonds based on the market. Third, the US treasury bonds, the key investment and trading category in the global bonds market, feature a large market capacity, strong liquidity and high risk return, and therefore, the US treasury bonds market is a key investment destination for countries to operate and manage foreign exchange reserves. April 23, 201512:31:31 · Guan Tao: For your second question, I would like to say, first, the RMB exchange rate is fluctuating bidirectionally, with no tendency adjustment. Despite the bidirectional fluctuation of the RMB against the USD, the overall adjustment is limited and the RMB is appreciating against other currencies, so the RMB is still a strong currency. Second, based on the data we have monitored, the RMB has become China's top-2 settlement currency for cross-border trade over the euro since 2011, which will continue in the future. In 2014, the cross-border receipts and payments of the RMB in the non-banking sector accounted for 24 percent of cross-border capital flows, up by 7 percentage points from the previous year, and the figure was 27% in the first quarter of this year. A growing number of domestic enterprises are using the RMB for cross-border settlement. Therefore, the RMB internationalization has not slowed down, but is accelerating, in terms of either the market or the policies. April 23, 201512:36:04 · Reporter from Reuters What's your idea about trends in RMB exchange rate? China is facing the pressure from capital outflows while witnessing the constant appreciation of the RMB against non-USD currencies. Will this affect China's exports and macro economy? April 23, 201512:45:16 · Guan Tao: Thank you for your question. Premier Li Keqing talked about the RMB exchange rate in his interview with the British Financial Times on March 31, which was focused on three aspects: First, the bidirectional fluctuation of the RMB against the USD is a result of the strengthening USD; second, China does not want to see continued depreciation of the RMB, which may affect China's economic restructuring; third, China expects major economies to enhance the coordination of their macro policies to avoid depreciation of their currencies. April 23, 201512:46:51 · Hu Kaihong: This is the end of today's conference. Thank you for coming. April 23, 201512:52:05 (The original text is available at www.china.com.cn) 2015-06-17/en/2015/0617/1161.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated China's external debt data as at the end of December 2018. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on China’s recent external debt situations. Q: Could you brief us on China's external debt for the year of 2018? A: China’s external debt continued to increase in 2018, while the overall growth rate slowed down. As at the end of December, the full-scale outstanding external debt (including domestic and foreign currencies) hit USD 1.9652 trillion, representing an increase of USD 207.3 billion from the end of 2017, up by 12%. In the four quarters of 2018, the quarter-on-quarter change of China’s external debt was 7.5%, 1.5%, 2.7% and -0.2% respectively. Specifically, the first quarter registered the fastest growth, while the second and third quarters witnessed obvious slowdown of growth rate. The structure of external debt has continued to improve. With respect to currency structure, the external debt in domestic currency increased by 16% year on year, which is higher than the 10% increase in foreign currency external debt. In terms of term structure, the medium- and long-term external debt increased by 13% year on year, slightly faster than that of short-term debts, which posted an 11% growth rate. As regards debt instruments, it is mainly attributed to increase of debt securities, currency and deposits, as well as trade credit and advance payment, which contributed to 44%, 23% and 20% respectively to the increase of external debt. Q: How shall we view the external debt risks facing China now? A: China’s national economic operation in 2018 was generally stable. The SAFE has deepened foreign exchange administration reform on an ongoing basis, steadily promoted the opening-up of the financial market, therefore the demand of overseas investors for allocating domestic RMB bonds has continued to rise, and the structure of debt instruments has become more stable. At the end of 2018, the outstanding debt securities accounted for 22% of the full-scale outstanding external debt, up by 2.6 percentage points from the end of 2017. The external debt risks facing China are controllable on the whole. As at the end of 2018, the external debt/GDP ratio, or the ratio of outstanding external debt to GDP was 14.4%; the debt ratio, or the ratio of outstanding external debt to export income from trade in goods and services was 74.1%; the debt servicing ratio, or the ratio of payments of principal and interest on external debt in the middle and long term and payments of interest on external debt in the short term to export income from trade in goods and services, was 5.5%, and the ratio of short-term external debt to foreign exchange reserves was 41.4%. All of the above indicators are within the internationally accepted safe range. In the future, the SAFE will further refine the two-pronged administration framework featuring macro-prudential and micro-regulatory approaches for cross-border capital flow, keep a keen eye on the changes in external debt situations, and strengthen the prevention of external debt risks while persisting in serving the real economy with foreign exchange administration, so as to safeguard China's economic and financial security. 2019-03-29/en/2019/0404/1501.html
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Q: The latest data on foreign exchange reserves disseminated by the State Administration of Foreign Exchange (SAFE) show that China's foreign exchange reserves as of the end of March 2019 rose by USD 8.6 billion month on month. Could you brief us on the causes of such changes? What will be the future trends of foreign exchange reserves? A: As at the end of March 2019, China posted USD 3.0988 trillion in foreign exchange reserves, up by USD 8.6 billion or 0.3% month on month. In March, under the impact of China-US economic and trade negotiations, expected monetary policy adjustment of European and US central banks as well as the uncertainty of Brexit of the UK, the US dollar index rose slightly. However, the prices of financial assets also rose. Due to the combined impact of exchange rate translation and changes in asset prices etc., China’s foreign exchange reserves increased modestly. Since the beginning of this year, despite the imbalance of external environment and a number of uncertainties, China’s economy has sustained the development trend of overall stable growth while ensuring progress, and the future prospects tend to be positive. China's foreign exchange market is running more smoothly and the cross-border capital flow through major channels has been further improved, which provides a solid foundation for the stability of the foreign exchange reserves. Looking forward, the global political and economic situations will be complex with rising uncertainties. Economic growth will be confronted with downward pressure, prices of financial assets will remain high, and the international financial market is expected to become more volatile. However, China's economy will operate within a reasonable range. As the flexibility of RMB exchange rate increases, the function of exchange rate as "automatic stabilizer" will gradually become evident, which is generally conducive to maintaining the stability of China's foreign exchange reserves. 2019-04-07/en/2019/0412/1503.html
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As the world economy recovered slowly and economic and trade globalization were faced with tough challenges, General Secretary Xi Jinping proposed in 2013 the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road. The Belt and Road Initiative, integrating China's development with those of the countries along the routes, and Chinese dream with the best wishes of the peoples of the countries alongside, is set to become a great undertaking that enhances the wellbeing of the peoples across the world. While following the gist of the key speeches by General Secretary Xi Jinping on the Initiative, and adhering to the general work guideline of making progress while maintaining stability, the State Administration of Foreign Exchange (SAFE), as an important foreign-related economic management department, has conformed to the development philosophy of innovation, coordination, greenness, opening and sharing to build a new pattern of opening up that features mutual benefit, openness and transparency, equality and inclusiveness. It also has been committed to deepening the system reform for foreign exchange administration, enhancing trade and investment facilitation, and leveraging resources on the domestic and foreign markets, in a bid to create a benign, healthy and stable environment for the Initiative. Shaping New Patterns for the Connectivity between China and the Rest of the World under the Belt and Road Initiative Since the outburst of the global financial crisis in 2008, the world's economic and financial patterns have undergone complex and profound changes. For lack of dynamics for growth, the world economy has recovered slowly and in a divergent way. The global economic governance has fallen behind and could hardly adapt to the new changes in the world economy, while the global investment and trade patterns and multilateral investment and trade rules are to go through remarkable adjustments. As the global development is imbalanced, and trade protectionism, anti-globalization and populism rise, countries are faced with complex and tough challenges in the course of their development. How to make the world economy more vibrant, inclusive and sustainable? How to unleash more positive effect of economic globalization? Under such circumstances, China proposed the Belt and Road Initiative. In the spirit of open regional cooperation, the Initiative is designed to safeguard the global systems for free trade and the open world economy to rebalance the economic globalization. While serving the fundamental interests of the international community, and being aligned with China's basic national strategy of reform and opening up, the Initiative is favorable for China to build a new pattern of all-round opening up and deepen the linkage between China and the rest of the world to allow China to be further integrated into the world economic system. First, favorable for rebalancing the world economy. China has not only benefited from economic globalization but also contributed to it. The China-proposed Belt and Road Initiative is in line with the common demand of the countries along the routes, and opens a new opportunity window for these countries to complement each other and open up, which will be favorable for China and these countries to achieve common development and for further balancing the global economic development. In August 2016, General Secretary Xi Jinping stressed at the seminar on pressing ahead with the Belt and Road Initiative that strengthening cross-border connectivity, enhancing trade and investment cooperation and boosting global production capacity and equipment manufacturing cooperation by capitalizing on the opportunities the Initiative presents are in nature to generate new demands by increasing effective supplies so as to rebalance the world economy. In particular, in the face of the sluggish world economy, exporting the huge production capacities and construction capabilities developed in the pro cycle to meet the pressing needs of the countries along the Belt and Road for advancing industrialization and modernization and enhancing the level of infrastructure will be conducive to stabilizing the world economic conditions. Over the past three years, Chinese enterprises have invested more than USD 50 billion in these countries, with myriads of key projects implemented, thus driving the economic development of the countries and creating many job opportunities for them. Originating in China, the Initiative has delivered benefits well beyond its borders. Second, favorable for enhancing China's impact on the world economy. The Initiative, which embodies China's national strategy of opening up to seek mutual benefit, charts the new course for China's opening up and will become the new growth point of China's economy. Jointly building the Silk Road Economic Belt will be favorable for consolidating the basis for cooperation between China and Central and Southeast Asia, shaping the road towards common development of China and the countries along the Belt and Road, promoting the opening up of inland and border regions, and improving the development and competitiveness of the central and western regions of China while boosting the transformation, upgrading and outbound investments of East China to create a new landscape for joint development, drive the implementation of the supply-side structural reform and achieve the Chinese dream of great national rejuvenation. Over the past three years, over 100 countries and international organizations have given warm responses and support to the Initiative. More than 40 countries and international organizations have signed cooperation agreements with China, and our circle of friends along the Belt and Road is growing bigger. Third, providing good opportunities for cross-border capital flows. Cross-border capital flows, the natural products of economic globalization, help boost the effective allocation of capital around the world and drive the proliferation and flows of advanced technologies and management experience to promote global economic growth. Jointly building the Belt and Road is designed to promote orderly and free flows of economic factors, highly efficient allocation of resources and deep integration of markets, which will be favorable for boosting the two-way liberalization of China's financial market, enhancing cross-border trade and investment facilitation, driving convertibility of the capital account and pressing ahead with RMB internationalization. While supporting Chinese enterprises to go global, the Initiative attracts long-term foreign capital to flow in to create the healthy, benign and stable order of cross-border capital flows and to ensure China's balance of payments is basically balanced and robust. Creating Favorable Policy Environment for the Belt and Road Initiative through Foreign Exchange Administration Reform By following the gist of a series of General Secretary Xi Jinping's speeches, foreign exchange authorities have been committed to ensuring opening and cooperation, harmony and inclusiveness, market operation and mutual benefit in accordance with the Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, with focus on policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds. To create a favorable policy environment for the Initiative, we will adhere to two basic principles for foreign exchange administration: First, we will persevere in reform and opening up to support and boost two-way liberalization of the financial market, further enhance cross-border trade and investment facilitation and serve the real economy. We will support capable enterprises that meet relevant conditions to carry out authentic outbound investing activities in compliance with regulations to better serve the Initiative. Second, we will be on guard against risks arising from cross-border capital flows and the impact from the disorderly flows of cross-border capital on the macro economy and financial stability, so as to maintain the stability of the foreign exchange market, create a sound market environment for reform and opening up and the Initiative, and promote joint growth and common prosperity of other countries. Promoting Sound Economic and Trade Cooperation to Ensure the Smoothness of the Belt and Road Initiative Trade and investment cooperation is a key part of the Initiative. General Secretary Xi Jinping said in his keynote speech at the opening ceremony of the 2017 annual meeting of the World Economic Forum that we must persevere in supporting free trade and investment worldwide and boosting trade and investment liberalization and facilitation while opening up, and guarding against protectionism. In recent years, foreign exchange authorities have been committed to enhancing trade and investment facilitation, removing investment and trade barriers, deepening linkage between trade and investing activities, expanding the scope of trade and investment, optimizing trade and investment structure, exploring new growth points for trade and investment, promoting the balanced development of cross-border trade and investment, and creating sound business environment inside and outside the region to unleash cooperation potential and expand and improve cooperation with the rest of the world. First, implementing the foreign exchange administration system reform for trade in goods in all respects. Trade development is a key part of the Initiative, with trade in goods being the top priority. In 1996, China accomplished convertibility of the current account. In recent years, the verification on a transaction-by-transaction basis of foreign exchange receipts and payments under trade in goods has been cancelled to allow banks to review electronic documents for eligible enterprises and allow class-A enterprises' foreign exchange receipts under trade to be transferred directly into the foreign exchange account under the current account. Efforts have been made to enhance the facilitation of foreign exchange receipts and payments under trade in goods, and consolidate and expand traditional trade to serve the Initiative. Second, deepening the foreign exchange administration reform for trade in services. Efforts have also been made to build and refine the systems in favor of trade in services, cancel prior approval for trade in services, and hand down foreign trade receipts and payments under trade in services to banks, with documents significantly simplified. The reform has effectively reduced the operating costs for enterprises, which is favorable for developing modern trade in services, and optimizing trade structure, thereby vigorously supporting the Initiative. Third, promoting diversified foreign trade development. The SAFE will continue to enhance facilitation of border trade and individual trade, cancel administrative permission for border trade accounts, accelerate turnover of capital and simplify document requirements for individual trade to expand trading under the Initiative. Fourth, supporting the development of new formats. The SAFE has been active in supporting the development of cross-border e-commerce comprehensive pilot zones and expanding the zones to cover 12 cities including Tianjin. In 2015, the pilot program for cross-border e-commerce payments business was rolled out nationwide. Since then, 33 pilot payment institutions across the country have registered an accumulated USD 24.6 billion in cross-border receipts and payments, and supported the development of cross-border e-commerce such as the Internet+, which is favorable for innovating the way of trading and developing new business formats such as cross-border e-commerce to explore the new growth points for trading under the Initiative. Fifth, actively supporting Chinese enterprises to go global. Direct investment is a key channel for Chinese enterprises going global to support the joint building of the Belt and Road. In recent years, foreign exchange administration for direct investments has been significantly simplified and basically convertible and enterprises have remarkably picked up speed to go global. The statistics from the Ministry of Commerce show the ODI from non-financial Chinese enterprises was USD 170.1 billion in 2016, up by 40% year on year. The rapid increase in China's ODI shows the enhanced comprehensive national strength, the higher level of opening up, and the steady advancement of the Initiative, the global production capacity cooperation and administration streamlining and power delegation, which is conducive to boosting China's economic transformation, and promoting economic growth in the globe and the host countries to accomplish mutual benefit and common development of China and the countries along the Belt and Road. At the same time, countries will be faced with various risks in building the Belt and Road, such as country risk, market risk, legal risk and labor risk. As a foreign-related economic administration department, the SAFE has always encouraged enterprises to participate in international economic competition and cooperation, and in joint building and production capacity cooperation under the Initiative to promote the transformation and upgrading of the domestic economy and deepen mutual benefit and cooperation between China and the countries along the Belt and Road. By following the outbound investment management principle that "under the guidance of the government, enterprises will play a dominant role based on market orientation and international practices", the SAFE supports capable Chinese enterprises that meet relevant conditions to make authentic outbound investments in compliance with regulations. Deepening Financial Integration to Expand New Channels for the Belt and Road Initiative The Belt and Road Initiative champions wide-ranging, multi-dimensional, and multi-level connectivity, and financial connectivity is a strong support for the Initiative. General Secretary Xi Jinping emphasized at the 2015 Boao Forum for Asia that the Belt and Road should be jointly built through consultation to meet the interests of all, and integrate development strategies and complement each other's advantages. In recent years, the SAFE has been dedicated to expanding the funding channels for enterprises, innovating the ways of financing, and driving enterprises to go global with capital that has gone global. The SAFE has participated in the Initiative and international production capacity and equipment cooperation by making use of China's capital and experience, as well as its advantages in high-end technology and equipment. At the same time, the SAFE has brought in advanced international technology to achieve integration, cooperation and mutual benefit in terms of technology, management, culture and markets with relevant countries. As at the end of 2016, China's banking industry registered USD 147.6 billion in assets in the countries along the Belt and Road, up by 12% year on year. First, new breakthroughs have been achieved in the two-way opening of portfolio investment. Portfolio investment is a key area for the connectivity of asset allocation. In recent years, the SAFE has harnessed the opportunities from the equilibrium of foreign exchange to refine the systems for qualified foreign institutional investors (QFII) and qualified domestic institutional investors (QDII) in the logic of "balanced regulation and two-way flows" and launched the system for RMB qualified foreign institutional investors (RQFII). It implemented the foreign exchange administration reform for QFIIs and expanded the pilot program for RQFIIs, and simplified the approval procedures for QFIIs and RQFIIs. Moreover, it loosened the upper limit for investments by a single institution, facilitated inward and outward remittances, and eased the restriction of the lockup period, thereby further boosting the opening up of China's capital market. By the end of December 2016, 278 QFIIs obtained the quota of USD 87.309 billion, and 177 RQFIIs obtained the quota of RMB 528.475 billion. Second, the macro-prudential management policy for full-scale cross-border financing has been adopted nationwide. External debt is the key channel for expanding domestic market participants' support for the sources of financing for the Initiative. In recent years, the SAFE has canceled prior approval for external debt and overseas guarantee. In 2016, while summarizing the experience gained from the pilot program for macro-prudential management of external debt, the SAFE rolled out nationwide the macro-prudential management policy for full-scale cross-border financing and innovated the way of supporting investment and financing, in a bid to reduce the difficulties and the cost of financing for enterprises going global. In 2016, Chinese enterprises, including non-banking Chinese financial institutions, registered a contracted amount of USD 102.1 billion for external debt, 2.3 times that of 2015. Third, China's bond market has been further opened up. The SAFE facilitates the issuance of panda bonds by foreign institutions in the Chinese market, allows foreign institutional investors to invest in the domestic inter-bank bond market without imposing limit on a single institution or a total limit, and allows foreign institutional investors who have invested in China's bond market to participate in the foreign exchange derivatives markets both at home and aboard based on real demand to satisfy foreign institutional investors' demand for risk aversion. As of the end of April 2017, there were 48 foreign exchange settlement agencies. Driving enterprises to go global with capital that has gone global is favorable for expanding capital sources for the Initiative to support facilities connectivity. As at the end of 2016, in China's interbank bond market, panda bonds of RMB 63.1 billion had been issued and involved more than 400 foreign investors, with the balance of investment nearing RMB 800 billion. Optimizing Use of Foreign Exchange Reserves to Open New Windows for the Belt and Road Initiative Capital going global plays a fundamental role in the Initiative. As a national strategy-oriented administrative institution for foreign exchange reserves, the SAFE has been committed to improving operation and management of foreign exchange reserves, strengthening coordination and risk control for diversified use of foreign exchange reserves, actively supporting significant strategies such as the Belt and Road Initiative and international production capacity and equipment manufacturing cooperation so as to build a system of external investment and financing platforms that are complementary and cooperative to each other. First, building capital platforms for the Initiative. The SAFE has been dedicated to expanding diversified use of foreign exchange reserves and taken a multi-level approach to support the Initiative through equity, debt and funds. In addition to entrusted loans, the SAFE took the lead to establish the Silk Road Fund and China-Africa Production Capacity Cooperation Fund. The Silk Road Fund boasts a total investment of USD 40 billion, with the first installment of USD 10 billion, while the latter has a total investment of USD 10 billion. Moreover, the SAFE has invested in CIC International, CNIC Corporation, China Development Bank and the Export-Import Bank of China and supported bilateral and multilateral funds in various ways such as China-Africa Development Fund, China-Eurasian Economic Cooperation Fund and China-Arab Investment Funds. Since their inception, these establishments have made explorations in functional positioning, investment concept, business practice and corporate governance and delivered a wealth of initial outcomes. Second, serving national strategies based on market orientation. Through commercial operation, the SAFE focuses on supporting projects under the Belt and Road Initiative such as infrastructure, resource development, industrial cooperation and financial cooperation so as to achieve mid and long-term financial sustainability and good returns on investment. It also has been committed to providing investment and financing support to the economic and trade cooperation between China and relevant countries and regions, and to bilateral and multilateral connectivity. Third, performing an investor's roles and responsibilities. The SAFE endeavors to guide investment institutions to conduct standardized and professional management in terms of corporate governance and the leadership of CPC. The SAFE strengthens the leadership of CPC and improves the systems and mechanism for CPC building, and makes full use of CPC's core role in corporate governance. The SAFE also devotes itself to improving corporate governance, and refining the incentive and constraint mechanisms, achieving significant progress in business expansion, company building, risk control and internal systems. Making Progress while Maintaining Stability in Foreign Exchange Administration to Further Support the Belt and Road Initiative The advancement of the Belt and Road Initiative will play a key role in creating the new pattern of comprehensive opening up, expanding China's development space, and safeguarding security and stability of neighboring countries and regions, and also creates significant opportunities for China and relevant countries to press ahead with connectivity, cooperation and common development. While adhering to the general work guideline of making progress while maintaining stability, foreign exchange authorities will continue to follow the relevant plans of the CPC Central Committee and the State Council to advance reform and opening up, build a new pattern of opening up for common development, inject new life into joint development, so as to systematically, effectively and forcefully advance the Initiative, play a due role of the facilitator, server and safeguard for the Initiative, and lend much momentum to an open world economy, so that the Initiative could better benefit different peoples. To this end, five aspects shall be ensured as follows: First, the Initiative follows market orientation. An open window will not be closed again. The SAFE shall continue to enhance trade and investment facilitation, and expand trade and investment areas, to improve the efficiency and quality of market participants in using domestic and international markets and resources. The SAFE shall also deepen the investment and financing linkage system and further study and implement the mutual benefit policies. It shall welcome foreign enterprises to invest in China and encourage domestic enterprises to participate in the infrastructure building and industrial investment in the countries along the Belt and Road, to promote connectivity under the Initiative. Second, the Initiative is open for cooperation. Efforts shall be made to further open up and facilitate domestic capital market, bond market and foreign exchange market. To achieve the current objective of balancing the supply-demand relationship of the foreign exchange market, and the long-term goal of boosting the opening up of the financial market, the SAFE shall boost the capital account convertibility in a prudential and systematic way. The SAFE shall also work to expand the liberalization of the bond market and facilitate foreign institution's entry into China's bond market to issue and invest in bonds and expand the funding sources for the Initiative. Efforts shall be made to refine the exchange rate formation mechanism, enhance exchange rate elasticity, enrich risk hedging tools in the foreign exchange market and build more friendly and convenient system environment to satisfy the needs of foreign investors for managing exchange rate risks. Third, the Initiative is balanced and robust to make good use of the intangible hand and the tangible hand. With the market laws and international rules under the Initiative observed, efforts shall be made to make full use of the market's decisive role in resource allocation and the roles of enterprises and the government to build a system for macro-prudential management of cross-border capital flows and micro market regulation to prevent the risks arising from unusual cross-border capital flows and build a healthy, stable, and benign order in the foreign exchange market for the Initiative. Fourth, the Initiative seeks mutual benefit to optimize the use of foreign exchange reserves. Under the philosophy of commercial operation, mutual benefit, openness and inclusiveness, the SAFE shall attempt new measures for diversified use while showing respect for the international economic and financial rules to invest in infrastructure, resource development, industrial cooperation, and financial cooperation under the Initiative, through a variety of financing and investment vehicles, especially equity investments to promote common development and prosperity of China and the countries along the Belt and Road. Fifth, policies are integrated to strengthen coordination and cooperation. The SAFE shall boost the policy communication with the countries and regions along the Belt and Road, strengthen connectivity and cross-border cooperation of market infrastructure, and enhance communication and exchanges with foreign investors to make the foreign exchange market more transparent. (The original text is available in the ninth issue of China Finance for 2017) 2017-05-05/en/2017/0505/1263.html
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The national foreign exchange administration work conference has been recently held in Beijing. By following the spirit of 18th CPC National Congress, the Third, Fourth, Fifth and Sixth Plenums of the 18th CPC Central Committee, and the Central Economic Work Conference, the conference reviewed foreign exchange administration in 2016, deeply analyzed the current state of the economy, finance and balance of payments, and discussed and made plans for foreign exchange administration for 2017. Pan Gongsheng, administrator and secretary of the Party Leadership Group of the State Administration of Foreign Exchange (SAFE), delivered a work report at the conference, with deputy administrators, and heads of the SAFE branches (including foreign exchange administration departments), and departments of the SAFE present. The meeting pointed out that, by following the work plans of the CPC Central Committee and the State Council, and the guidance of the CPC Committee of the People's Bank of China, foreign exchange authorities stuck to problem orientation and bottom-line thinking, coordinated the relationship between promoting trade and investment facilitation and guarding against cross-border capital flow risks, and deepened the reform of "delegation, centralization and services" in 2016. To be specific, foreign exchange authorities rolled out nationwide the macro-prudential management policy for full-scale cross-border financing, further liberalized interbank bond markets, and carried out the QFII foreign exchange administration reforms. Under the existing policy framework, foreign exchange authorities strengthened management and execution, worked with other departments for joint regulation, intensified authenticity and compliance reviews, and cracked down on foreign exchange irregularities, in a bid to safeguard the stability of foreign exchange markets. Foreign exchange authorities also enhanced operation and management of foreign exchange reserves, and improved diversified utilization of foreign exchange reserves to safeguard the equilibrium of balance of payments and the national economic and financial security. The meeting emphasized that the year 2017 is key to the implementation of the 13th Five-year Plan and to the deepening of the supply-side structural reform. In the year, foreign exchange authorities are required to implement the spirit of the Central Economic Work Conference and the work plans of the CPC Central Committee and the State Council, adhere to the general work guideline of making progress while maintaining stability and follow the guidance of the CPC Committee of the People's Bank of China to take bold steps to effectively enhance trade and investment facilitation, serve the development of the real economy, intensify authenticity and compliance reviews, and crack down on foreign exchange irregularities, and guard against risks arising from cross-border capital flows, so as to embrace the 19th CPC National Congress with excellent performance. The meeting made plans for the priorities of foreign exchange administration for 2017: first, continue to press ahead with administration streamlining and power delegation and reform in key areas, and further boost trade and investment facilitation to support the development of the real economy. Second, enhance authenticity and compliance reviews, intensify inspections and punishment with regard to foreign exchange irregularities, and maintain a tough stance on crimes such as underground banks and evasion and cheated purchases of foreign exchange, in a bid to safeguard the health and stability of foreign exchange markets. Third, strengthen ongoing and ex-post management, enhance the level of offsite monitoring, analysis and early warning in relation to cross-border capital flows, and refine the management framework for macro-prudential cross-border capital flows. Fourth, improve the operation and management of foreign exchange reserves, to safeguard the security, flows, value growth and maintenance of foreign exchange reserves. Fifth, implement the requirements for strengthening the Party's self-discipline, and continue to step up efforts to build the CPC, clean up undesirable work styles and uphold integrity, and enhance teambuilding and internal management. 2017-01-06/en/2017/0106/1241.html
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In 2016, the State Administration of Foreign Exchange (SAFE) received and processed 39 proposals and motions from the delegates to the NPC and the members of the CPPCC, which covered supporting enterprise going global, boosting RMB internationalization, providing financial support for the Belt and Road Initiative, RMB capital account convertibility and supporting the development of pilot FTZ. The SAFE attached great importance to the processing efforts, arranged relevant work, and made great efforts to carry out the related tasks. As a result, the processing of the relevant proposals and motions for 2016 was completed successfully, which can be attributable to the following aspects: first, close attention from the leadership and thoughtful arrangements. With the significance of the proposals and motions processing stressed by the SAFE's Party Leadership Group, the leaders in charge of this processing effort convened a special meeting to make arrangements and raise requirements for the processing. Second, improved systems and standardized processing. A special measure has been developed to make sure the processing is institutionalized and standardized. Third, good coordination and communication to enhance the processing level. The SAFE took various measures to communicate with the delegates and further listened to their opinions and suggestions to ensure the quality of the processing. Fourth, strengthened training and rigorous overseeing. Training was provided for the persons processing the proposals and motions and supervision was improved to make sure every proposal and motion was replied and every inquiry got response. After the completion of the processing, a wrap-up meeting was held to identify and summarize the experience gained and good practices in this processing effort. 2017 is a year of great importance in the 13th Five-year Plan period and a year when the supply-side structural reform will go deeper. The SAFE shall make the processing of proposals and motions from the 2017 NPC and CPPCC testimony to the implementation of the gist of the 18th CPC National Congress, the Third, Fourth, Fifth and Sixth Plenums of the 18th CPC Central Committee and the Central Economic Work Conference, and continue to improve its work styles and work hard to do well in the processing of the proposals and motions from the 2017 NPC and CPPCC, and embrace the 19th CPC National Congress with real actions. 2017-02-27/en/2017/0227/1250.html
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On December 21, 2016, Pan Gongsheng, Administrator of the State Administration of Foreign Exchange (SAFE), met with a delegation from China Banking Association Foreign Bank Working Committee in Beijing. A seminar was held with 15 foreign bank delegates. They exchanged ideas on the conditions of foreign exchange markets, regulation of foreign exchange markets, and banks' compliance and self-discipline. According to Administrator Pan Gongsheng, building healthy and orderly foreign exchange markets is the common pursuit of market players. Currently, the cross-border capital flow risk is within control and there are long-term fundamental factors that support the stability of foreign exchange markets. Adhering to the general work guideline of making progress while maintaining stability, foreign exchange authorities have been committed to achieving short-term targets through balancing foreign exchange receipts and payments, and guarding against cross-border capital flow risks, and also to making long-term achievements in boosting the liberalization of financial markets, by balancing facilitation and risk mitigation, strengthening regulation of foreign exchange markets and cracking down on foreign exchange irregularities. Commercial banks are required to follow the business principles and intensify authenticity and compliance reviews in handling foreign exchange business. They should perform their social responsibilities and promote the reform measures with regard to foreign exchange administration. They also should guide market players to rationally use the funds and immediately report problems once they are spotted, so as to jointly safeguard the stability of foreign exchange markets. 2016-12-22/en/2016/1222/1238.html
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On January 23, 2017, Pan Gongsheng, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange (SAFE) met with a delegation headed by Mr. Joerg Wuttke, president of the European Union Chamber of Commerce in China (EUCCC) in Beijing. The two sides exchanged ideas on the outlook for China's economic development, its cross-border capital flows and foreign exchange administration policies. According to Pan Gongsheng, China has sustained stable and healthy economic development. It was in the vanguard of the world for its GDP year-on-year growth of 6.7% in 2016, boasting fundamental factors in place that will support the equilibrium of the balance of payments in a long period to come. China has been committed to building a loose and orderly investment environment, in a bid to make its markets more transparent and standardized. Foreign exchange authorities will focus on ensuring the continuity and consistency of its foreign exchange administration policies. They will work to enhance trade and investment facilitation, ensure foreign-funded enterprises are not constrained in normal outward remittances of their profits, and support capable enterprises that meet certain conditions to engage in authentic ODI in compliance with regulations. Meanwhile, the authorities will make great efforts to intensify the authenticity and compliance reviews, with focus on preventing cross-border capital flow risks and safeguarding the health and stability of the foreign exchange markets. 2017-01-24/en/2017/0124/1245.html
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On December 20, 2016, Pan Gongsheng, Administrator of the State Administration of Foreign Exchange (SAFE), met with a delegation from the Hong Kong Association of Banks (HKAB) headed by Mr. Norman Chan, Chief Executive of the Hong Kong Monetary Authority (HKMA) and Ms. Chen Xiumei, Chairperson of the HKAB. The two sides exchanged ideas on issues of both concern such as foreign exchange situation, and foreign exchange administration policies. According to Administrator Pan Gongsheng, the cross-border capital flow risk is within control at the moment, and there are long-term fundamental factors that support the equilibrium of the balance of payments. The SAFE will be committed to trade and investment facilitation under the existing policy framework. What's more, the SAFE will also guard against cross-border capital flow risks, intensify regulation of foreign exchange markets, and crack down on foreign exchange irregularities, in a bid to sustain the health and stability of foreign exchange markets. 2016-12-20/en/2016/1220/1237.html
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To ramp up the administrative approval efficiency and improve law-based administration with regard to foreign exchange administration, so that the transparency of law-based administration could be ensured, the State Administration of Foreign Exchange (SAFE) has recently published the Statistical Table on Intermediary Services Involved in Administrative Approval and Entrusted to Relevant Institutions by Administrative Counterparts (Statistical Table). By making known the intermediary services, the SAFE aims to facilitate the general public's inquiries and understanding. The Statistical Table's highlights include 6 intermediary service items required in 3 administrative approval items under the capital account, such as financial audit report, capital verification report and power of attorney. This is another key move the SAFE has taken in recent years to implement the State Council's requirements on administration streamlining, power delegation and strengthening services to boost law-based administration and information transparency. For the details of the Statistical Table, please visit the SAFE's official website at "online services - administrative approval - administrative approval items". 2016-12-23/en/2016/1223/1239.html