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Q: According to the latest data on foreign exchange reserves released by the People’s Bank of China, as of the end of October, China’s foreign exchange reserves decreased by USD33.9 billion from the end of September. Could you tell us why the change occurred? What’s the trend of foreign exchange reserves in the future? A: By the end of October 2018, China’s foreign exchange reserves stood at USD3,053.1 billion, down by USD33.9 billion or 1.1% from the end of September. In October, China’s cross-border capital flows were generally stable and the balance of payments basically maintained equilibrium. Affected by monetary policies of major countries, global trade situations, geopolitical situations, among others, fluctuations on the international financial market have intensified. The US dollar index has risen by over 2 percent, and asset prices in major countries witnessed adjustment. Due to the combined impact of exchange rate translation and asset price changes etc, the foreign exchange reserves declined slightly. Since the beginning of this year, the international environment has been complex, with apparent rising of uncertainty in the global economic and financial market. China’s economy has maintained overall stability and steady progress, continued to remain within the reasonable range, and the foreign exchangemarket has been running smoothly. According to preliminary statistics, banks showed a small deficit of about USD3 billion in foreign exchange settlement and sales in October, narrowing by over 80% from September. Specifically, net purchase of foreign exchange by individuals was stable with a slight decline, both on a year-on-year basis and month-on-month basis. Looking ahead, although there are many uncertain external factors, China's economic fundamentals are still robust, with strong resilience and adaptability. Meanwhile, with China’s economic transformation and upgrade as well as further opening-up, there are still adequate conditions which are conductive to steady operation of cross-border capital flow, and China’s foreign exchange reserves are expected to stay stable amid fluctuations. 2018-11-07/en/2018/1107/1479.html
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Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China show that China's foreign exchange reserves by the end of November 2018 rose by USD 8.6 billion month on month. My question is what caused such changes in foreign exchange reserves and how the foreign exchange reserves will change in the future? A: By the end of November 2018, China's foreign exchange reserves stood at USD 3,061.7 billion, up by USD 8.6 billion or 0.3% from the end of October. In November, China's balance of payments continued to maintain steady operation. Affected by change in expectation of US monetary policies and fluctuations of international oil prices, bond prices of major countries rose slightly on the whole, while the US dollar index increased marginally amid fluctuations. Due to the combined impact of exchange rate translation and asset price changes etc., the foreign exchange reserves witnessed an increase. Since the beginning of this year, the instabilities and uncertainties in the external environment have increased remarkably. However, China's economy has maintained overall stability and made steady progress. The RMB exchange rate has showed an increased two-way floating elasticity, supply and demand in the foreign exchange market has maintained basic equilibrium, and cross-border capital flows have been stable on the whole. Looking ahead, although there are many uncertainties in the global economy and finance, the long-term positive fundamentals of China's economy has remained unchanged. As China continues to expand reform and opening-up, the impetus and momentum for China's economic development will be further strengthened, thus laying a solid foundation for the overall stability of the foreign exchange market. Under the combined impact of internal and external factors, China's foreign exchange reserves are expected to remain stable amid fluctuations. 2018-12-07/en/2018/1207/1477.html
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The State Administration of Foreign Exchange (SAFE) has recently released the data on external debt as at the end of September 2018. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues. Q: Could you brief us on China's external debt for the third quarter of 2018? A: China witnessed growth in external debt for the third quarter of 2018. As at the end of September, China's full-scale outstanding external debt (including foreign currencies) amounted to USD 1.9132 trillion, up by USD 42.7 billion or 2.3% from the end of June, mainly due to the growth of the balance of trade credit and prepayment and of debt securities. Q: What are the main reasons for the growth of China’s outstanding external debt in the third quarter? A: First, the scale of China’s import and export trade increased steadily in the third quarter. In particular, the import trade increased by nearly 19% from the same period last year, and the balance of trade financing increased accordingly. Second, in recent years, with the gradual acceleration of China’s bond market opening to the outside world, foreign investors have continued to increase their holdings of domestic bonds, and the proportion of debt securities in China’s full-scale external debt has been rising steadily. As of the end of September 2018, the proportion of debt securities was 22.4%. As the global economic situation faces many uncertainties in the future, the SAFE will continue to closely monitor changes in external debt situations, guard against risk of cross-border capital flows and safeguard national economic and financial security. 2018-12-28/en/2018/1228/1481.html
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To meet the requirements of foreign investors to expand investment in China’s capital market, the total quota for qualified foreign institutional investors (QFIIs) has been raised from USD 150 billion to USD 300 billion upon approval of the State Council. As the earliest and most important institutional arrangement for China's capital market to open to the outside world, QFII system serves as one of the major channels for foreign investors to make investment in China's domestic financial market. From 2016 to 2018, the State Administration of Foreign Exchange (SAFE) conducted a significant reform on QFII system-related foreign exchange administration, including improving prudent management, abolishing restrictions on proportion of outward remittance and canceling relevant provisions on lock-up period, allowing foreign exchange hedging of securities assets held by QFIIs in China, which has greatly facilitated foreign investors to invest in domestic financial market via QFII channels. 2019-01-14/en/2019/0118/1486.html
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Catalogue of Major Existing Laws and Regulations in Effect on Foreign Exchange Administration (as of June 30, 2018) 2018-07-31/en/2018/0731/1476.html
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In accordance with the Law of the People’s Republic of China on Anti-Money Laundering (Decree No. 56 of the President of the People’s Republic of China) and Regulations of the People’s Republic of China on Foreign Exchange Administration (Decree No. 532 of the State Council of the People’s Republic of China), the State Administration of Foreign Exchange (SAFE) has strengthened foreign exchange market regulation, and severely cracked down upon false and fraudulent foreign exchange transactions, in a bid to maintain the healthy and benign order in the foreign exchange market. In accordance with the Regulations of the People's Republic of China on the Disclosure of Government Information (Decree No. 711 of the State Council of the People's Republic of China) and other relevant regulations, a selection of typical cases involving violations of foreign exchange regulations are notified as follows: Case 1: Case of foreign exchange payment for false entrepot trade by Bank of Nanjing Shanghai Pudong Subbranch From February to March 2016, Bank of Nanjing Shanghai Pudong Subbranch handled foreign exchange payment for entrepot trade with false bills of lading of enterprises. The bank violated Article 12 of the Regulations of the People's Republic of China on Foreign Exchange Administration. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, it was fined RMB 800,000. Case 2: Case of foreign exchange payment for false entrepot trade by Agricultural Bank of China Ningbo Branch From September 2016 to September 2017, the Agricultural Bank Ningbo Branch handled the foreign exchange payment for entrepot trade with the invalid bills of lading or repeatedly used documents presented by the enterprises, and failed to handle foreign exchange receipts and payments under entrepot trade at the same bank outlet in accordance with regulations. The bank violated Article 12 of the Regulations on Foreign Exchange Administration and Article 5 of the Circular of the State Administration of Foreign Exchange on Further Promoting Trade and Investment Facilitation and Improving Authenticity Review. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, the bank was ordered to rectify and fined RMB 644,800. Case 3: Case of foreign exchange payment for false entrepot trade by ICBC Nanchang Beijingxilu Subbranch From September 2016 to October 2017, ICBC Nanchang Beijingxilu Subbranch handled foreign exchange payment for entrepot trade with false bills of lading of enterprises. The bank violated Article 12 of the Regulations on Foreign Exchange Administration. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, the bank was ordered to rectify and fined RMB 1,115,400. Case 4: Onshore guarantees by Industrial Bank Taizhou Branch for offshore loans against regulations From April 2015 to May 2016, Industrial Bank Taizhou Branch failed to fulfill verification responsibilities when handling contracting of onshore guarantees for offshore loans and performing foreign exchange payment, and failed to conduct due diligence and inspection as required, with regard to the purposes of the loans, expected sources of repayment, possibility of performing the contracts for onshore guarantees and relevant transaction background. The bank violated Article 12 and 28 of the Regulations on Foreign Exchange Administration for Cross-border Guarantees. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, the bank was ordered to rectify and fined RMB 953,100. Case 5: Split-up sales and payments of individual foreign exchange by China Merchants Bank Hangzhou Branch From January to November 2016, China Merchants Bank Hangzhou Branch used the annual quotas of 303 individuals in China to buy foreign exchange and split up sales and payments of foreign exchange for its clients in violation of regulations. The bank violated Article 7 of the Measures for the Administration of Individual Foreign Exchange. In accordance with Article 47 of the Regulations on Foreign Exchange Administration, the bank was ordered to rectify and fined RMB 1 million. Case 6: Evasion of foreign exchange by Shandong Qingyuan Group Co., Ltd. In May 2016, Shandong Qingyuan Group Co., Ltd. made external foreign exchange payment of USD 9.555 million by using false contracts, invoices and bills of lading, and fabricating trade background. The company violated Article 12 of the Regulations on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, the company was fined RMB 3,097,400. Relevant penalty information has been included in the credit information system of the People’s Bank of China. Case 7: Evasion of Foreign Exchange by Guangzhou Yangfan Trading Co., Ltd. From May 2016 to June 2017, Guangzhou Yangfan Trading Co., Ltd. made external foreign exchange payment of USD 92.858 million by using false bills of lading and fabricating trade background. The company violated Article 12 of the Regulations on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, the company was fined RMB 37.34 million. Relevant penalty information has been included in the credit information system of the People’s Bank of China. Case 8: Evasion of foreign exchange by Country Style Cooking (Chongqing) Investment Co., Ltd. From November 2016 to March 2017, the actual controller of Country Style Cooking (Chongqing) Investment Co., Ltd. did not handle the registration of foreign exchange and alteration registration for overseas investment in accordance with the regulations, and remitted profits to the overseas parent company in violation of the regulations, with a total amount of USD 8,859,900. The company violated Article 16 of the Regulations on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, the company was fined RMB 3.02 million. Relevant penalty information has been included in the credit information system of the People’s Bank of China. Case 9: Evasion of foreign exchange by Ningbo Huili International Trade Co., Ltd. From February 2017 to March 2018, Ningbo Huili International Trade Co., Ltd. made external foreign exchange payment of USD 15,656,200 by using false bills of lading and fabricating trade background. The company violated Article 12 of the Regulations on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, the company was fined RMB 5,098,400. Relevant penalty information has been included in the credit information system of the People’s Bank of China. Case 10: Evasion of foreign exchange by Beijing Xinhuayang Trade Co., Ltd. In May 2017, Beijing Xinhuayang Trade Co., Ltd. made external foreign exchange payment of USD 6.19 million by using invalid bills of lading and fabricating trade background. The company violated Article 12 of the Regulations on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, the company was fined RMB 2,136,500. Relevant penalty information has been included in the credit information system of the People’s Bank of China. Case 11: Evasion of foreign exchange by Tellhow Sci-Tech Co., Ltd. In May 2017, Tellhow Sci-Tech Co., Ltd. made external foreign exchange payment of EUR 2 million by using false bills of lading and fabricating trade background. The company violated Article 12 of the Regulations on Foreign Exchange Administration and was involved in foreign exchange evasion. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, the company was fined RMB 800,000. Relevant penalty information has been included in the credit information system of the People’s Bank of China. Case 12: Illegal trading of foreign exchange by Mr. Liu from Sichuan From June 2014 to August 2015, Mr. Liu remitted inward HK$ 7,671,700 in 12 deals through underground banks. He violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered breaking the laws on the purchases and sales of foreign exchange. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, he was fined RMB 491,400. The SAFE exercised the “Watch list” management on Mr. Liu, and included him into the credit information system of the People’s Bank of China. Case 13: Illegal trading of foreign exchange by Mr. Cao from Hubei From July 2015 to March 2016, Mr. Cao conducted 34 deals of illegal trading of Hong Kong dollars via underground banks, with a total amount of RMB 8,993,200. He violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered getting involved in the illegal trading of foreign exchange. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, he was fined RMB 719,500. The SAFE exercised the “Watch list” management on Mr. Cao, and included him into the credit information system of the People’s Bank of China. Case 14: Illegal trading of foreign exchange by Mr. Peng from Chongqing From September to December 2015, Mr. Peng purchased US dollars via underground banks in 16 deals to remit overseas, with a total amount of RMB 13,835,800. He violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered getting involved in the illegal trading of foreign exchange. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, he was fined RMB 968,500. The SAFE exercised the “Watch list” management on Mr. Peng, and included him into the credit information system of the People’s Bank of China. Case 15: Illegal trading of foreign exchange by Mr. Zhang from Anhui From January 2017 to April 2018, Mr. Zhang conducted illegal trading of Hong Kong dollars several times via underground banks, with a total amount of RMB 3,762,400. He violated Article 30 of the Measures for the Administration of Individual Foreign Exchange and was considered getting involved in the illegal trading of foreign exchange. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, he was fined RMB 452,000. The SAFE exercised the “Watch list” management on Mr. Zhang, and included him into the credit information system of the People’s Bank of China. Case 16: Purchases and sales of foreign exchange by Mr. Hong from Zhejiang, without permission From February 2011 to October 2015, Mr. Hong paid RMB 312 million to another people's account, and purchased foreign exchange privately for the overseas purchase of real estate. He violated Article 30 of the Measures for the Administration of Individual Foreign Exchange by getting involved in the purchases and sales of foreign exchange without permission. In accordance with Article 45 of the Regulations on Foreign Exchange Administration, he was fined RMB 24.97 million. The SAFE exercised the “Watch list” management on Mr. Hong, and included him into the credit information system of the People’s Bank of China. Case 17: Evasion of foreign exchange by Mr. Sun from Guangdong through split-up From January 2016 to July 2017, Mr. Sun split up his personal funds, used the annual quotas of 34 individuals in China to buy foreign exchange and transferred the foreign exchange into overseas account. The funds thus transferred illegally amounted to USD 2,446,200 in total, which is used for overseas investment. He violated Article 7 of the Measures for the Administration of Individual Foreign Exchange and was considered getting involved in the evasion of foreign exchange. In accordance with Article 39 of the Regulations on Foreign Exchange Administration, he was fined RMB 830,000. The SAFE exercised the “Watch list” management on Mr. Sun, and included him into the credit information system of the People’s Bank of China. 2019-05-20/en/2019/0520/1515.html
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The State Administration of Foreign Exchange (SAFE) has recently released the Balance of Payments (BOP) for the first quarter of 2019 and the International Investment Position (IIP) as of the end of March, 2019. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues. Q: Could you brief us on China's balance of payments for the first quarter of 2019? A: Based on the balance of payments, China's current account and financial account (excluding reserve assets) both registered surplus for the first quarter of 2019. The foreign reserves rose and the balance of payments maintained basic equilibrium. First, the surplus under the current account remained within a reasonable range, the surplus under trade in goods increased and the deficit under trade in services narrowed. In the first quarter of 2019, a surplus of USD 49 billion was recorded under the current account, and its ratio to GDP for the period was 1.5%. The surplus in trade in goods under balance of payments reached USD 94.7 billion, up by 83% year on year. The deficit under trade in service was USD 63.4 billion, down by 14% year on year. Specifically, tourism posted a deficit of USD 57.6 billion, down by 9%. Second, the financial account (excluding reserve assets) was in surplus, featuring net cross-border capital inflows. In the first quarter, the financial account (excluding reserve assets) registered a surplus of USD 48.8 billion, and the main net inflow items are direct investment and portfolio investment. Net inflows of foreign exchange by direct investment amounted to USD 26.5 billion. Specifically, the net inflows of inward foreign direct investment to China approached USD 47.6 billion; the net outflows of China’s outbound direct investment reached USD 21 billion. The net inflows of portfolio investment reached USD 19.5 billion. Specifically, the net increase of foreign portfolio investment in China reached USD 35.7 billion; China's external portfolio investment posted a net increase of USD 16.2 billion. Third, reserve assets rose. In the first quarter, China's reserve assets rose by USD 10 billion as a result of the BOP transactions (excluding the impact of non-transaction factors such as exchange rate and price), among which, foreign exchange reserves increased by USD 10 billion. In 2019, China will continue to promote high-quality economic development and all-round opening-up, which is conducive to consolidating the foundation for stable operation of the balance of payments. It is expected that China's balance of payments will continue the development pattern of basic balance of current account and overall stability of cross-border capital flows. Q: What would you say about China's International Investment Position as at the end of March 2019? A: According to the international investment position statement, China's international investment position remained robust at the end of March 2019. The main characteristics are as follows: Firstly, the total size of external financial assets increased. China's external assets reached USD 7.3817 trillion at the end of March, up by 0.8% over the end of 2018, mainly because China's ODI increased by USD 28.5 billion, or 1.5%; portfolio investment assets picked up by USD 47.6 billion or 9.6%; and reserve assets rose by USD 28.2 billion or 0.9%. Secondly, external liabilities continued to increase. China's external liabilities reached USD 5.4306 trillion at the end of March, up by 4.6% over the end of 2018. Specifically, FDI rose by USD 101.2 billion or 3.7%; Portfolio investment liabilities (foreign purchases of securities issued by China) rose by USD 159.3 billion, or up by 14.5%. Thirdly, the decline in net external assets mainly reflects the increase in the stock market capitalization of China's listed companies in the first quarter. At the end of March, China's net external assets (asset-liability) totaled USD 1.9511 trillion, down by 8.4% from the end of 2018, mainly affected by valuation factors such as asset price changes. In the first quarter, the domestic stock market and Hong Kong stock market witnessed a significant rise, and the market value of shares issued by Chinese enterprises held by non-residents increased, which belonged to China's external portfolio investment liabilities. The increase of market value led to the increase of liabilities, so the scale of China's net external assets decreased correspondingly. Overall, China sustained its No. 1 position worldwide by reserve assets. With orderly outbound investments and rising inbound investments, China's international investment position is still robust. 2019-06-27/en/2019/0627/1519.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 May 2019. SAFE Press Spokesperson and Chief Economist Wang Chunying answers media questions on foreign exchange receipts and payments for May 2019. Q: What changes occurred in China’s foreign exchange receipts and payments in May 2019? A: In May, China's foreign exchange receipts and payments remained stable with good momentum, and the operation of the foreign exchange market remained stable. Based on relevant data, firstly, banks’ settlement and sales of foreign exchange registered a surplus. In May, banks’ foreign exchange settlement rose 4% from April, while banks’ foreign exchange sales fell 7%, recording a surplus of USD 6.2 billion. Secondly, the deficit of banks’ foreign-related receipts and payments for customers narrowed. In May, enterprises, individuals and other non-banking sectors recorded a deficit of USD 6 billion in foreign-related receipts and payments, narrowing by 23% month on month. Thirdly, the balance of foreign exchange reserves rebounded to certain extent, reaching USD 3,101 billion at the end of May, an increase of USD 6.1 billion month on month. Market expectations have been stable as a whole since May, with positive changes in cross-border capital flows through major channels. In May, market players’ willingness to settle foreign exchange rose and their willingness to buy foreign exchange remained stable. In particular, the foreign exchange settlement rate 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 70%, up by 4 percentage points month on month. The foreign exchange sales rate 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 68%, basically the same month on month. The contracted surplus of forward settlement and sales of foreign exchange was USD 19.2 billion, up by33% month on month. In this context, cross-border capital flows through major channels remained stable and showed positive changes. First, banks maintained a certain scale of surplus in the settlement and sales of foreign exchange and foreign-related receipts and payments of trade in goods on behalf of clients, registering an increase from April. Second, the foreign exchange settlement of capital in foreign direct investment registered an increase, the foreign exchange purchases with capital in ODI were stale with a slight decline, and the surplus of foreign exchange settlement and sales of direct investment increased. Third, the purchase of foreign exchange with investment income by enterprises was normal and orderly, which registered a month-on-month increase due to seasonal factors but was lower than that of the same period last year. Fourth, net foreign exchange purchases by individuals continued to decrease in May, down by 28% year on year and 19% month on month respectively. Despite the complex and volatile external environment, China's economy has been running smoothly on the whole, showing strong resilience and great potential. The ongoing progress in reform and opening-up, ample macro policy space and high market confidence has provided strong fundamental support for the stability of the foreign exchange market. Meanwhile, in recent years, the RMB exchange rate formation mechanism has been constantly refined. As the bidirectional floating of foreign exchange rate has become more flexible, the risk management awareness and adaptability of market players have witnessed obvious improvement. The changes of foreign exchange receipts and payments data in May adequately reflect the increasing maturity and rationality of China’s foreign exchange market, which is expected to better stand all kinds of tests in the future. 2019-06-20/en/2019/0620/1517.html
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On May 19, Pan Gongsheng, Deputy Governor of the People’s Bank of China (the PBOC) and Administrator of the State Administration of Foreign Exchange (SAFE) received an interview by a reporter from the Financial News regarding the current operation of China’s financial and foreign exchange markets. Financial News: What would you say about the current operation of China’s financial and foreign exchange markets? Pan Gongsheng: First, China’s economy is running smoothly on the whole, the main indicators remain within a reasonable range, the shift from old drivers to new drivers is accelerating and the macroeconomic fundamentals are sound. In April, China’s manufacturing purchasing managers’ index (PMI) was 50.1%, continuing to be in the expansion range. The macro policies still have considerable operation space and there is a rich selection of policy instruments. Since the beginning of this year, counter-cyclical adjustment has been strengthened under the prudent monetary policy, which makes the policy more forward-looking and flexible, and maintains reasonable liquidity. Such efforts have promoted the rapid growth of social credit and resulted in moderately tight monetary and financial conditions. Meanwhile, financial sectors have stepped up their support for private enterprises as well as micro and small enterprises. At the end of April, the broad money supply (M2) increased by 8.5% year on year, 0.2 percentage point higher than the same period last year. China’s steady economic and financial operation lays a solid foundation for a reasonable and stable development pattern of the foreign exchange market and RMB exchange rate. Since the beginning of this year, China’s foreign exchange market has been running smoothly. The inflow of foreign capital has increased, the foreign exchange reserves have risen steadily, and the expectation of foreign exchange market has been stable on the whole. Second, we will, in accordance with the established guidelines, unswervingly promote the financial opening-up, maintain the continuity and stability of the financial reform and opening-up policy, resolutely implement the financial reform and opening-up policy which has been deployed, further facilitate the two-way opening-up of the financial market, deepen the foreign exchange administration reform, improve the liberalization and facilitation level for cross-border trade and investment, earnestly protect the legitimate rights and interests of foreign investors, and create more convenient and friendly investment environment for domestic and foreign investors. Third, in recent years, we have accumulated rich experience and sufficient policy instruments in dealing with fluctuations in the foreign exchange market, and adopted necessary counter-cyclical adjustment measures to strengthen macro-prudential management in light of the changing situations. We have cracked down upon irregularities on the foreign exchange market, to maintain the good order of the foreign exchange market. We have the solid foundation, confidence and capabilities to maintain the steady operation of China’s foreign exchange market and keep the RMB exchange rate basically stable at a rational and balanced level. 2019-05-19/en/2019/0604/1508.html
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In order to fully implement the spirit of the 19th CPC National Congress and the second and third plenary sessions of the 19th CPC Central Committee, effectively guard against and mitigate financial risks, the State Administration of Foreign Exchange (SAFE) has earnestly implemented the deployment of special rectification of Internet financial risks, and vigorously promoted the clean-up and rectification of illegal online foreign exchange speculation platforms. We hereby inform you of the recent investigation and punishment of relevant cases as follows: Upon investigation and verification, Shenzhen ThinkMarkets Consulting Co., Ltd. provided business promotion services for the online foreign exchange speculation platform operated by its overseas shareholders, solicited domestic investors to participate in overseas foreign exchange margin trading, and collected service fees in violation of regulations, which violates Article 12 of the Regulations of the People’s Republic of China on Foreign Exchange Administration, and constitutes a serious offense. The Shenzhen Branch of the SAFE, in accordance with Article 41 of the Regulations of the People’s Republic of China on Foreign Exchange Administration, gave a warning to the company, ordered it to make corrections and imposed a fine of RMB 1.18 million. Presently, the regulatory authorities in China haven’t approved any institutions to conduct foreign exchange margin trading either directly or on agency basis. In accordance with the Circular on Sternly Investigating and Punishing Illegal Foreign Exchange Futures Transactions and Foreign Exchange Margin Trading Activities (Zhengjianfazi No. 165 [1994], which was jointly released by China Securities Regulatory Commission, the State Administration of Foreign Exchange, the State Administration for Industry and Commerce, and the Ministry of Public Security), any unauthorized foreign exchange futures transaction and foreign exchange margin trading by an unapproved institution is illegal; it is also an offense for a client (organization or individual) to entrust an institution which is not approved and registered to conduct foreign exchange futures transaction and foreign exchange margin trading, whether in foreign currency or renminbi as security deposit. The SAFE and its branches will continue to earnestly implement the deployment requirements of guarding against and mitigating financial risks, carry out clean-up and rectification of illegal online foreign exchange speculation platforms in a steady and orderly manner, so as to safeguard the national financial security and stability. (The end) 2019-05-10/en/2019/0604/1514.html