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To implement the gist of the 18th CPC National Congress, and the Third, Fourth, Fifth and Sixth Plenums of the 18th CPC Central Committee, and the Central Economic Work Conference, further deepen the foreign exchange administration reform, streamline administration and delegate powers, support the development of the real economy, and guard against the risks arising from cross-border capital flows, the State Administration of Foreign Exchange (SAFE) has recently released the Circular of the State Administration of Foreign Exchange on Further Advancing Foreign Exchange Administration Reform to Enhance Authenticity and Compliance Reviews (Huifa No. 3 [2017], hereinafter referred to as "Circular"). The Circular is focused on coordinating facilitation and risk prevention. On the one hand, the reform will continue, with policy measures implemented in favor of the balance of foreign exchange receipts and payments to support the development of the real economy. On the other hand, efforts will be made to urge banks and enterprises to comply with the existing foreign exchange administration provisions to perform their responsibilities for authenticity and compliance reviews, to intensify statistical analysis of retained earnings overseas, refine the integrated management of cross-border funds denominated in domestic and foreign currencies and guard against risks. Authentic cross-border receipts and payments and exchanges that are in compliance with regulations will not be affected. Specifically, the Circular covers 9 measures in three aspects: I. Deepening reform to enhance the level of trade and investment facilitation. First, expanding the scope of foreign exchange settlements for domestic foreign exchange loans; second, allowing funds for overseas loans under domestic guarantees to be transferred back for domestic use. Third, increasing the share of deposits absorbed by the international foreign exchange master account with domestic banks for domestic use. Fourth, allowing overseas institutions in pilot free trade zones to go through foreign exchange settlements through the non-resident account. II. Refining management to strengthen authenticity and compliance reviews. First, further standardizing foreign exchange administration for trade in goods and requiring exporters to collect foreign exchange in time. Second, continuing to implement and refine the outward remittance management policy for foreign exchange profits from direct investment, and clarifying the requirements on documents and endorsement for the outward remittance of foreign exchange profits of the equivalent of USD 50,000 (exclusive), and that the losses of the previous years should be duly made up for before remitting profits outward. Third, making sure that any domestic institution explains to the bank the sources of investment funds and the purposes (use plan) of the funds, and present to the bank the resolutions of the board of directors (or the resolutions of the partners), contracts and other authenticity evidencing materials, when going through ODI registration and remittance procedures. III. Stepping up efforts in statistics to coordinate management of domestic and foreign currencies. First, any domestic institution who has retained overseas its export revenues or revenues from trade in services due to various reasons, but fails to undergo registration and filing procedures or submit information for the administration of foreign exchange as planned shall report relevant information to the local foreign exchange authority within one month after the Circular is released. Second, the integrated macro-prudential management of domestic and foreign currencies will be adopted for the overseas lending business of domestic institutions. In the overseas lending business of a domestic institution, the sum of the balance of overseas loans denominated in domestic currency and the balance of overseas loans denominated in foreign currencies shall not exceed 30% of its owner's equity in the audited financial statements for the previous year. The Circular will take effect as of the date of promulgation. The SAFE will regularly assess the outcomes of policy implementation and make adjustments at a proper time in line with the BOP situations. 2017-01-26/en/2017/0126/1247.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' sales and settlements of foreign exchange and their foreign-related receipts and payments for customers for January 2017. The SAFE press spokesperson answered media questions on relevant issues to make further clarification. Q: Could you brief us on the new changes in China's cross-border capital flows since the beginning of the year 2017. A: Since the beginning of 2017, the pressure from cross-border capital outflows facing China has been relieved remarkably. First, the deficit in banks' sales and settlements of foreign exchange has contracted. In January 2017, a deficit of USD 19.2 billion was registered under banks' sales and settlements of foreign exchange, down by 59% month on month and 65% year on year. In particular, a deficit of USD 15.6 billion was recorded under sales and settlements of foreign exchange in the non-banking sector such as enterprises and individuals, down by 64% month on month and 77% year on year. Second, a declining deficit was recorded under foreign-related receipts and payments in the non-banking sector. In January, the non-banking sector posted a deficit of USD 9.7 billion under foreign-related receipts and payments, down by 21% month on month and 83% year on year. To be specific, a surplus of USD 1.7 billion in foreign exchange receipts and payments, and a deficit of USD 11.4 billion in RMB receipts and payments were posted. The recent positive changes in the supply and demand of foreign exchange in China are multifaceted. First, market participants prefer settling foreign exchange to buying foreign exchange. In January, the ratio of customers' foreign exchange settlements with banks to the banks' foreign-related foreign exchange receipts was 62%, up by 4 percentage points month on month, while the ratio of customers' foreign exchange purchases with banks to the banks' foreign-related foreign exchange payments was 71%, down by 3 percentage points. Second, enterprises' cross-border foreign exchange financing has risen stably, and their repayment of domestic foreign exchange loans has dropped further. In January, the balance of cross-border financing for imports such as refinancing and forward L/C went up by USD 4.1 billion month on month, marking growth for the 11th consecutive month; enterprises' purchases of foreign exchange to service domestic foreign exchange loans had hit rock bottom since March 2013, down by 45% month on month. Last but not least, domestic players' demand for purchasing foreign exchange has been further stabilized. In January, for example, enterprises' purchases of foreign exchange with ODI funds dropped by 8% month on month, and with ROI, by 20% month on month; and individuals' purchases of foreign exchange under travel for trips and study abroad fell by 28% month on month. China's overall cross-border capital flows are presenting a more remarkable feature of reaching an equilibrium. Despite the many uncertainties in the external environments that are easy to trigger short-term fluctuations in global financial markets, China's middle and long-term development trends of cross-border capital flows will remain unchanged, with the economic fundamentals still serving as the fundamental support. Since the beginning of 2017, China's economy has continued to operate within a reasonable range. In January, the official manufacturing PMI remained above the boom and bust line for the 6th consecutive month, and PPI rose positively for the 5th consecutive month. Moreover, China's import and export of goods secured rapid year-on-year growth. 2017-02-17/en/2017/0217/1249.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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To expand the opening up of the foreign exchange market and boost the liberalization of the interbank bond market, the State Administration of Foreign Exchange (SAFE) has recently released the Circular of the State Administration of Foreign Exchange on Foreign Exchange Risk Management for Foreign Institutional Investors in the Interbank Bond Market (Huifa No. 5 [2017], "Circular"). The Circular mainly includes the following: Firstly, any foreign institutional investor in the interbank bond market could handle the RMB-foreign exchange derivatives business with a qualified domestic financial institution to enhance the level of opening-up of the foreign exchange market. Secondly, under the principle of transaction for actual requirements, foreign institutional investors shall carry out the foreign exchange derivatives business only for the purpose of hedging against the foreign exchange risk exposure arising from the investments in the interbank bond market with funds remitted from abroad, so as to guarantee the order of the foreign exchange market. Thirdly, diverse trading tools and mechanisms will be provided for foreign institutional investors' foreign exchange derivatives business to facilitate foreign exchange risk management. The Circular shall come into force as of the date of issuance. 2017-02-27/en/2017/0227/1251.html
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Q: It has been recently reported that China, in order to crack down on capital flight, has introduced measures to constrain cross-border financing instruments and impact imports. What would you say about this? A: The State Administration of Foreign Exchange (SAFE) has not introduced recently any measures to intensify foreign exchange management with regard to import financing. For the authentic and legitimate foreign exchange receipts and payments under trade, relevant documents could be presented to a bank for direct handling. Cross-border guarantees such as overseas loans under domestic guarantees will continue to be handled in accordance with the Regulations on Foreign Exchange Administration for Cross-border Guarantees. The cross-border guarantees with authentic trade and investing backgrounds and relevant products will not be affected. 2017-01-25/en/2017/0125/1246.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 January 11, 2017, Pan Gongsheng, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange met with Axel A. Weber, chairman of the Board of Directors of UBS AG in Beijing. The two sides exchanged views on issues such as the development of China's bond markets, flows of cross-border capital and bilateral cooperation. 2017-01-11/en/2017/0111/1243.html
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FILE: Template on International Reserves аnd Foreign Currency Liquidity(аs аt Dec 31 2016) 2017-01-26/en/2017/0126/611.html
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FILE: Template on International Reserves аnd Foreign Currency Liquidity(аs аt Apr 30 2017).xls 2017-05-31/en/2017/0531/614.html
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FILE: Template on International Reserves аnd Foreign Currency Liquidity(аs аt Feb 28 2017) 2017-03-31/en/2017/0331/612.html