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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, the Central Economic Work Conference and the National Financial Work Conference, with a focus on deepening reform in key areas and working on legislation and files consolidation in key areas. To make it easier for the public to inquire and use, the SAFE has recently updated the Catalogue of Effective Laws and Regulations on Foreign Exchange Administration (Catalogue). The Catalogue classifies 220 policies, laws and regulations on foreign exchange administration released as of June 30, 2018 into eight major categories, namely, Comprehensive Foreign Exchange Administration, Foreign Exchange Administration under the Current Account, Foreign Exchange Administration under the Capital Account, Regulation of the Foreign Exchange Business of Financial Institutions, RMB Exchange Rate and Foreign Exchange Market, BOP and Foreign Exchange Statistics, Foreign Exchange Inspections and Applicable Regulations, and Foreign Exchange Technical Management, and into several sub-items further by type of business. The files added to the Catalogue this time around involve statistical survey of trade credit, domestic securities investments of qualified foreign institutional investors, onshore guarantees for offshore loans by insurance institutions, improvement of foreign exchange administration related to forward foreign exchange sales and settlements, statistical system of FDI, and assessment of the implementation of foreign exchange administration regulations among banks. Going forward, the SAFE will continue to carry out the arrangements of the CPC Central Committee and the State Council, with a focus on deepening the reform of foreign exchange administration, and advancing legislation and files consolidation in key areas, so as to facilitate the understanding and use of foreign exchange administration regulations by banks, companies and individuals, promote liberalization and facilitation of trade and investment and improve the service level for the real economy. 2018-07-31/en/2018/0731/1450.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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Document of People's Bank of China and State Administration of Foreign Exchange 2018-06-12/en/2018/0612/1454.html
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FILE：Annual Report of the State Administration of Foreign Exchange (2017) 2018-08-22/en/2018/0822/1451.html
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Recently, with the approval of the State Council, the State Administration of Foreign Exchange decided to cancel the investment quota restrictions for qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII) (hereinafter referred to as "qualified foreign investors").Wang Chunying, spokeswoman and chief economist of State Administration of Foreign Exchange, answered questions from reporters. Q:What is the background of abolishing the investment quota restrictions on qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII)? A: In 2002 and 2011, China launched Qualified Foreign Institutional Investor (QFII) and RMB Qualified Foreign Institutional Investor (RQFII) respectively. Qualified foreign investor scheme is one of the main channels for foreign investors to invest in domestic financial markets, an important institutional arrangement to enhance the convertibility of RMB under capital account, and has played a positive role in the steady opening up and further development of China's financial market. In recent years,State Administration of Foreign Exchange has earnestly implemented the deployment of the CPC Central Committee and the State Council on promoting the new pattern of comprehensive opening up, deepened the reform of the qualified foreign investor scheme, improved prudential management, abolished the restriction on repatriation of funds and the lock-in period requirements, and allowed qualified foreign investors to hedge their foreign exchange risks regarding their securities assets in China, which greatly facilitated foreign investors to invest in domestic financial markets. Subsequently, the investment demand of foreign investors in China's financial market has been on the rise,with China's stocks and bonds being included in main international indexes, such as MSCI, FTSE Russell, S&P Dow Jones and Bloomberg-Barclays index, and the weights being steadily increased. The abolition of the investment quota restriction for qualified foreign investors is a major reform of the State Administration of Foreign Exchange to deepen the reform and opening up of the financial market, and serve the new pattern of comprehensive opening up, as well as a reform measure to further meet the investment needs of foreign investors in China's financial market. Q:What are the legitimate foreign exchange procedures for qualified foreign investors to invest in the domestic securities market after the quota restrictions are lifted? A: Next, the State Administration of Foreign Exchange (SAFE) will immediately revise the Regulations on Foreign Exchange Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors (SAFE Announcement No.1 of 2018) and other relevant regulations, to make it clear that the investment quota of individual qualified foreign investor will no longer need to be approved. At that time, after obtaining relevant qualifications approved by the securities regulatory authorities, the foreign investors shall entrust a domestic custodian bank to gothrough relevant registration procedures, and open a special fund account in the custodian bank and handle the follow-up remittance of funds and exchange business, with the registration certificate issued by the State Administration of Foreign Exchange. Q:Will the restrictions on the pilot countries and regions of qualified foreign institutional investors (RQFII) be lifted? A: Yes, the limitations on the pilot countries and regions of RQFII will be lifted, together with the abolition of restrictions on the investment quota of qualified foreign investors. Qualified foreign institutions around the world are welcome to use overseas RMB to carryout domestic securities investment. The abolition of restrictions on RQFII pilot countries and regions will further facilitate foreign investors to invest in the domestic securities market and enhance the depth and breadth of China's financial market. 2019-09-10/en/2019/0910/1553.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange settlement and sales and banks' foreign-related receipts and payments for customers for July 2019. SAFE Spokesperson and Chief Economist Wang Chunying answers media questions on foreign exchange receipts and payments for July 2019. Q: What were the characteristics of China’s foreign exchange receipts and payments in July 2019? What changes have occurred recently? A: Banks' foreign exchange settlement and sales and foreign-related receipts and payments were further balanced in July, indicating stable performance of the foreign exchange market. First, the deficit in banks' settlement and sales of foreign exchange registered a remarkable contraction. Banks' foreign exchange settlement and sales recorded a deficit of USD 6.1 billion in the month, down by 68% month on month. Other supply and demand factors e.g. forward settlement and sales of foreign exchange as well as options transactions indicate that supply and demand were basically balanced in the foreign exchange market. Second, non-banking sectors posted a balance in foreign-related receipts and payments. Non-banking sectors like enterprises and individuals recorded a slight deficit of USD 2.1 billion in foreign-related receipts and payments in July, versus a deficit of USD 9.1 billion in June. Moreover, expectations in the foreign exchange market remained stable, and cross-border capital flows through major channels were stable and growing. On the one hand, market players were more willing to settle than to buy foreign exchange. The foreign exchange settlement ratio that measures the willingness to settle foreign exchange, or the foreign exchange sold by customers to banks as a percentage of their foreign-related foreign exchange income, was 67%, up by 5 percentage points month on month. The foreign exchange sales ratio that measures the willingness to buy foreign exchange, or the ratio of foreign exchange purchased by customers from banks to the customer's foreign-related foreign exchange payments was 69%, down by 1 percentage point from the previous month. On the other hand, ongoing net cross-border capital inflows were recorded under enterprises' trade in goods and direct investment, and foreign exchange purchases by individuals were further stabilized. In July, foreign-related receipts and payments and foreign exchange settlement and sales under trade in goods represented higher month-on-month surpluses, foreign-related receipts and payments and foreign exchange settlement and sales under direct investment and portfolio investment registered stable surpluses, while foreign exchange purchased by individuals fell by 8% year on year. China's foreign exchange market has been in good order since the beginning of August. After the US unexpectedly announced the tariff measures at the beginning of August, global financial markets have responded dramatically and the RMB exchange rate also has undergone short-term adjustments. The foreign-related transactions by Chinese market players including enterprises and individuals show that banks' foreign exchange settlement and sales have registered a slight surplus, and cross-border receipts and payments have stayed basically stable since the beginning of August. This suggests that domestic economic fundamentals have played a significant role in underpinning the stability of China's foreign exchange market, and also indicates that as it becomes more mature and rational, China's foreign exchange market can better respond and adapt to the changing external environment. China will continue to ensure the continuity and stability of its foreign exchange administration policies, and step up efforts to liberalize and facilitate cross-border trade and investment, so as to lay a more solid foundation for stable performance of its foreign exchange market to serve the development of the real economy and the new landscape of comprehensive opening up. 2019-08-19/en/2019/0819/1548.html
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The State Administration of Foreign Exchange (SAFE) has recently released the preliminary data on the balance of payments for the second quarter and the first half of 2019. SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues. Q: Could you brief us on the characteristics of the balance of payments for the first half of 2019? A: In the first half of 2019, a surplus of USD 106 billion was recorded under the current account, and its ratio to GDP was 1.6%. As initially estimated, net inflows were registered under the financial account excluding reserve assets, and direct investment and portfolio investment were in surplus. Specifically, First, under the current account, trade in goods remained in surplus, trade in service recorded a shrinking deficit, and primary and secondary income were in surplus. In the BOP, trade in goods registered a surplus of USD 222.8 billion in the first half; trade in service registered a deficit of USD 129.3 billion, down by 12% year on year. Deficits were recorded under travel and transportation but went down by 8% and 14% year on year respectively; primary income registered a surplus of USD 7.1 billion, versus a deficit of USD 30.3 billion the same period last year; secondary income represented a surplus of USD 5.4 billion, compared with a deficit of USD 6.5 billion the same period last year. Second, under the financial account excluding reserve assets, direct investment and portfolio investment remained in surplus. In the first half, direct investment registered a surplus of USD 33.6 billion. In particular, ODI, at USD 46.7 billion, stayed stable; FDI, at USD 80.3 billion, remained high. Under portfolio investment, foreign investors bought additional securities of USD 50-odd billion while China bought foreign securities of extra USD 30-plus billion, and two-way equity and bond investment increased, suggesting that the two-way opening of capital market in China has fueled capital transactions and cross-border capital flows to better satisfy the demands for cross-border asset allocation among domestic and foreign investors. Currently China sees stable economic expectations, deeper opening up, and deeper trade and investment liberalization and facilitation. It is expected that during the whole year, the current account will remain within the reasonable range and likely to continue with a slight surplus; and the financial account excluding reserve assets will remain stable. All this shows that the balance of payments will remain in an equilibrium. 2019-08-09/en/2019/0809/1547.html
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In order to implement the major policy decisions ofthe CPC Central Committee and the State Council on promoting the new pattern of comprehensive opening up and further expand the opening up of China's financial markets, with the approval of the State Council, the State Administration of Foreign Exchange has decided to cancel the investment quota limitations of qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII) (hereinafter referred to as "qualified foreigninvestors"). The qualified foreign investors scheme is one of the most important schemes for the opening-up of China's financial markets. Since the launch of QFII in 2002 and RQFII in 2011, more than 400 institutional investors from 31 countries and regions around the world have invested in China's financial markets through these channels, sharing the achievements of China's reform, opening up and economic growth, and also actively promoting the healthy development of China's financial markets. Over the years, the State Administration of Foreign Exchange has been adhering to the premise of effectively preventing risks, actively promoting the opening up of financial markets, and continuously deepening the reform of foreign exchange administration of qualified foreign investors scheme, which has abolished relevant exchange restrictions in 2018. The abolition of the investment quota for qualified foreign investors this time is another major reform measure taken by the State Administration of Foreign Exchange, in the field of foreign exchange administration of qualified foreign investors. In the future, foreign institutional investors with corresponding qualifications will only need to go through registration procedure, so as to remit funds independently to make securities investment in accordance with the regulations.Therefore, the convenience of foreign investors to participate in the domestic financial market will be greatly improved again, and China's bond and stock market will be better and more widely accepted by the international market. Looking forward, the State Administration of Foreign Exchange will continue to deepen the reform of foreign exchange administration, take effective measures to expand opening up, support foreign investors to invest in domestic financial markets, and enhance the facilitation ofcross-border investment and financing. At the same time, the SAFE will adapt tothe opening up, effectively prevent the risk of cross-border capital flows, and safeguard the national economic and financial security. 2019-09-10/en/2019/0910/1552.html
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Since the beginning of 2019, guided by Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era, and following the spirit of the 19th CPC National Congress and the 2nd and 3rd Plenary Sessions of the 19th CPC Central Committee, and the requirements of Central Economic Work Conference and the National Conference on Financial Work, the State Administration of Foreign Exchange (SAFE) has deepened foreign exchange reform in key areas, and been committed to legislation and files consolidation in key areas. For easy access and search by the public, the SAFE has recently updated the Catalogue of Major Effective Laws and Regulations on Foreign Exchange Administration (Catalogue), and released it in the "Policies & Regulations" section on its official website. The upgraded Catalogue contains 223 main laws and regulations on foreign exchange administration released as of June 30, 2019, which fall into eight categories including general foreign exchange administration, foreign exchange administration under the current account, foreign exchange administration under the capital account, regulation of the foreign exchange business of financial institutions, the RMB exchange rate and the foreign exchange market, balance-of-payments and foreign exchange statistics, foreign exchange inspections and application of the laws and regulations, and the scientific administration of foreign exchange, and several sub-categories by specific business type. The additions to the Catalogue this time revolve around foreign exchange administration for payment institutions, centralized operations and management of MNCs' cross-border capital, etc. The SAFE will continue to carry out the decisions and plans of the CPC Central Committee and the State Council, with a focus on deepening the reform of foreign exchange administration, and advancing legislation and files consolidation in key areas, so as to facilitate the understanding and use of foreign exchange administration regulations by market players including banks, companies and individuals, promote liberalization and facilitation of cross-border trade and investment and improve the service level for the real economy. (End) 2019-07-24/en/2019/0724/1550.html
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To implement the decisions and arrangements of the CPC Central Committee and the State Council on deepening the financial supply-side structural reform, drive the foreign exchange administration reform, and fuel the foreign exchange business growth in non-banking financial institutions, the State Administration of Foreign Exchange (SAFE) has recently approved of piloting in 3 securities companies for foreign exchange settlement and sales, including CITIC Securities Company Limited, Huatai Securities Company Limited and China Merchants Securities Co., Ltd., allowing them to conduct spot foreign exchange settlement and sales for themselves and their customers while keeping risks under control and to transact in the interbank foreign exchange market in compliance with rules and regulations. Such a pilot program will help drive balanced growth of both domestic and foreign currencies in domestic securities companies, speed up the fostering of world-class investment banks, and boost the high-quality growth of the financial industry. It will also contribute to expansion of players in the foreign exchange market and diversification of categories for foreign exchange transactions, and further fuel the growth of the foreign exchange market in depth, width and activeness and improve the market-based RMB exchange rate formation mechanism. The SAFE's next steps are to guide pilot companies to conduct foreign exchange sales and settlement in a good order and summarize their experience and learnings, and to attract more players into the foreign exchange market, so as to boost the healthy growth of foreign exchange businesses in non-banking financial institutions. 2019-09-05/en/2019/0905/1554.html