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In the fourth quarter of 2024, China's current account registered a surplus of RMB 1171.9 billion, and the capital and financial accounts recorded a deficit of RMB 1339.4 billion. In 2024, China's current account registered a surplus of RMB 3021.3 billion, and the capital and financial accounts recorded a deficit of RMB 3093.2 billion. In the US dollar terms, in the fourth quarter, China's current account recorded a surplus of USD 163.8 billion, including a surplus of USD 249.8 billion under trade in goods, a deficit of USD 47.4 billion under trade in services, a deficit of USD 43.3 billion under primary income and a surplus of USD 4.7 billion under secondary income. The capital and financial accounts registered a deficit of USD 187.3 billion, including a surplus of USD 47.6 million under the capital account, and a deficit of USD 187.4 billion under the financial account. In the US dollar terms, in 2024, China's current account recorded a surplus of USD 423.9 billion, including a surplus of USD 768.0 billion under trade in goods, a deficit of USD 229.0 billion under trade in services, a deficit of USD 130.0 billion under primary income and a surplus of USD 15.0 billion under secondary income. The capital and financial accounts recorded a deficit of USD 434.0 billion, including a deficit of USD 109.1 million under the capital account, a deficit of USD 433.9 billion under the financial account. In SDR terms, in the fourth quarter, China posted a surplus of SDR 123.9 billion under the current account, and a deficit of SDR 141.5 billion under the capital and financial accounts. In SDR terms, in 2024, China posted a surplus of SDR 318.8 billion under the current account, and a deficit of SDR 326.2 billion under the capital and financial accounts. The SAFE has revised the BOP data for each quarter since 2023 according to the latest data, which can be found in the section of "Data and Statistics" at the official website of the SAFE. In addition, in order to facilitate understanding of the data of Balance of Payments and International Investment Position among all data users, the BOP Analysis Team of the SAFE released China’s Balance of Payments Report 2024. (End) Abridged Balance of Payments, Q4 2024 Item Line No. RMB 100 million USD 100 million SDR 100 million 1. Current Account 1 11719 1638 1239 Credit 2 81231 11349 8587 Debit 3 -69512 -9712 -7348 1. A Goods and Services 4 14486 2024 1531 Credit 5 74708 10438 7897 Debit 6 -60222 -8415 -6366 1.A.a Goods 7 17883 2498 1891 Credit 8 67020 9364 7085 Debit 9 -49137 -6866 -5194 1.A.b Services 10 -3397 -474 -359 Credit 11 7689 1074 813 Debit 12 -11085 -1548 -1172 1.B Primary Income 13 -3102 -433 -328 Credit 14 5778 807 611 Debit 15 -8880 -1240 -939 1.C Secondary Income 16 335 47 35 Credit 17 745 104 79 Debit 18 -410 -57 -43 2. Capital and Financial Account 19 -13394 -1873 -1415 2.1 Capital Account 20 3 0 0 Credit 21 6 1 1 Debit 22 -3 0 0 2.2 Financial Account 23 -13397 -1874 -1415 Assets 24 -8456 -1178 -895 Liabilities 25 -4941 -695 -520 2.2.1 Financial Account Excluding Reserve Assets 26 -15570 -2177 -1645 2.2.1.1 Direct Investment 27 345 48 37 Assets 28 -2096 -293 -222 Liabilities 29 2441 341 258 2.2.1.2 Portfolio Investment 30 -10693 -1495 -1130 Assets 31 -5836 -815 -617 Liabilities 32 -4857 -680 -513 2.2.1.3 Financial Derivatives (other than reserves) and Employee Stock Options 33 -120 -17 -13 Assets 34 -10 -1 -1 Liabilities 35 -110 -15 -12 2.2.1.4 Other Investment 36 -5102 -713 -540 Assets 37 -2687 -373 -285 Liabilities 38 -2414 -340 -254 2.2.2 Reserve Assets 39 2173 304 230 3. Net Errors and Omissions 40 1675 235 176 Notes: 1. The statement is compiled according to BPM6. Reserve assets are included in capital and financial accounts. 2."Credit" is presented as positive value while "debit" as negative value, and the difference is the sum of the "Credit" and the"Debit". All items herein refer to difference, unless marked with "Credit" or "Debit". 3. The RMB denominated quarterly BOP data is converted from the USD denominated BOP data for the quarter using the period average central parity rate of RMB against USD. The quarterly accumulated RMB denominated BOP data is derived from the sum total of the RMB denominated data for the quarters. 4. The SDR denominated quarterly BOP data is converted from the USD denominated BOP data for the quarter using the period average exchange rate of SDR against USD.The quarterly accumulated SDR denominated BOP data is derived from the sum total of the SDR denominated data for the quarters. 5. In the fourth quarter of 2024, the equity other than reinvestment of earnings under direct investment liabilities (credit) was USD 30.7 billion (RMB 220.1 billion). 6.This statement employs rounded-off numbers. 7. For detailed data, please see the section of “Data and Statistics” at the website of the SAFE. 8. The BOP data is revised regularly; please find the latest data in “Data and Statistics”. Abridged Balance of Payments, 2024 Item Line No. RMB 100 million USD 100 million SDR 100 million 1. Current Account 1 30213 4239 3188 Credit 2 294853 41401 31186 Debit 3 -264640 -37162 -27998 1. A Goods and Services 4 38414 5390 4057 Credit 5 270126 37930 28570 Debit 6 -231712 -32540 -24513 1.A.a Goods 7 54718 7680 5783 Credit 8 242778 34090 25678 Debit 9 -188061 -26410 -19895 1.A.b Services 10 -16304 -2290 -1725 Credit 11 27347 3840 2893 Debit 12 -43651 -6130 -4618 1.B Primary Income 13 -9269 -1300 -983 Credit 14 22025 3093 2330 Debit 15 -31294 -4393 -3312 1.C Secondary Income 16 1068 150 113 Credit 17 2702 379 286 Debit 18 -1634 -229 -173 2. Capital and Financial Account 19 -30932 -4340 -3262 2.1 Capital Account 20 -8 -1 -1 Credit 21 14 2 1 Debit 22 -22 -3 -2 2.2 Financial Account 23 -30924 -4339 -3261 Assets 24 -30031 -4215 -3175 Liabilities 25 -893 -124 -87 2.2.1 Financial Account Excluding Reserve Assets 26 -35371 -4962 -3733 2.2.1.1 Direct Investment 27 -10928 -1537 -1159 Assets 28 -12259 -1722 -1299 Liabilities 29 1330 186 140 2.2.1.2 Portfolio Investment 30 -13401 -1876 -1416 Assets 31 -15270 -2142 -1617 Liabilities 32 1869 266 200 2.2.1.3 Financial Derivatives (other than reserves) and Employee Stock Options 33 -364 -51 -39 Assets 34 -201 -28 -22 Liabilities 35 -164 -23 -18 2.2.1.4 Other Investment 36 -10678 -1498 -1119 Assets 37 -6749 -945 -709 Liabilities 38 -3929 -552 -410 2.2.2 Reserve Assets 39 4447 623 472 3. Net Errors and Omissions 40 719 101 75 Notes: 1. The statement is compiled according to BPM6. Reserve assets are included in capital and financial accounts. 2."Credit" is presented as positive value while "debit" as negative value, and the difference is the sum of the "Credit" and the "Debit". All items herein refer to difference, unless marked with"Credit" or "Debit". 3. The RMB denominated quarterly BOP data is converted from the USD denominated BOP data for the quarter using the period average central parity rate of RMB against USD. The quarterly accumulated RMB denominated BOP data is derived from the sum total of the RMB denominated data for the quarters. 4. The SDR denominated quarterly BOP data is converted from the USD denominated BOP data for the quarter using the period average exchange rate of SDR against USD. The quarterly accumulated SDR denominated BOP data is derived from the sum total of the SDR denominated data for the quarters. 5.In 2024, the equity other than reinvestment of earnings under direct investment liabilities (credit) was USD 90.9 billion (RMB 648.0 billion). 6.This statement employs rounded-off numbers. 7. For detailed data, please see the section of “Data and Statistics” at the website of the SAFE. 8. The BOP data is revised regularly; please find the latest data in “Data and Statistics”. 2025-03-28/en/2025/0328/2295.html
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In the first quarter of 2025, China's current account registered a surplus of RMB 1188.5 billion, including a surplus of RMB 1705.3 billion under trade in goods, a deficit of RMB 425.8 billion under trade in services, a deficit of RMB 110.4 billion under primary income and a surplus of RMB 19.4 billion under secondary income.The capital and financial accounts (including net errors and omissions for the quarter) recorded a deficit of RMB 1188.5 billion. Inward foreign direct investments (FDI) continued the net inflow. In the US dollar terms, in the first quarter of 2025, China's current account registered a surplus of USD 165.6 billion, including a surplus of USD 237.6 billion under trade in goods, a deficit of USD 59.3 billion under trade in services, a deficit of USD 15.4 billion under primary income and a surplus of USD 2.7 billion under secondary income. The capital and financial accounts (including net errors and omissions for the quarter) recorded a deficit of USD 165.6 billion. In SDR terms, in the first quarter of 2025, China's current account registered a surplus of SDR 126.2 billion, including a surplus of SDR 181.0 billion under trade in goods, a deficit of SDR 45.2 billion under trade in services, a deficit of SDR 11.7 billion under primary income and a surplus of SDR 2.1 billion under secondary income. The capital and financial accounts (including net errors and omissions for the quarter) recorded a deficit of SDR 126.2 billion. (End) China's Balance of Payments, Q1 2025 (Preliminary Data) Item Line No. RMB 100 million USD 100 million SDR 100 million 1. Current account 1 11885 1656 1262 Credit 2 72020 10036 7644 Debit 3 -60135 -8380 -6382 1. A Goods and Services 4 12794 1783 1358 Credit 5 66455 9261 7053 Debit 6 -53661 -7478 -5695 1.A.a Goods 7 17053 2376 1810 Credit 8 59267 8259 6290 Debit 9 -42214 -5883 -4480 1.A.b Services 10 -4258 -593 -452 Credit 11 7189 1002 763 Debit 12 -11447 -1595 -1215 1.A.b.1 Processing services 13 187 26 20 Credit 14 210 29 22 Debit 15 -23 -3 -2 1.A.b.2 Maintenance and Repair Services 16 108 15 12 Credit 17 225 31 24 Debit 18 -117 -16 -12 1.A.b.3 Transport 19 -791 -110 -84 Credit 20 2090 291 222 Debit 21 -2880 -401 -306 1.A.b.4 Travel 22 -4267 -595 -454 Credit 23 797 111 85 Debit 24 -5064 -706 -538 1.A.b.5 Construction 25 105 15 11 Credit 26 268 37 28 Debit 27 -163 -23 -17 1.A.b.6 Insurance and Pension Services 28 -329 -46 -35 Credit 29 67 9 7 Debit 30 -396 -55 -42 1.A.b.7 Financial Services 31 15 2 2 Credit 32 82 11 9 Debit 33 -67 -9 -7 1.A.b.8 Charges for the Use of Intellectual Property 34 -570 -80 -60 Credit 35 189 26 20 Debit 36 -760 -106 -81 1.A.b.9 Telecommunications, Computer, and Information Services 37 419 58 44 Credit 38 1196 167 127 Debit 39 -776 -108 -82 1.A.b.10 Other Business Services 40 910 127 97 Credit 41 1991 277 211 Debit 42 -1082 -151 -115 1.A.b.11 Personal, Cultural, and Recreational Services 43 -32 -4 -3 Credit 44 47 7 5 Debit 45 -78 -11 -8 1.A.b.12 Government Goods and Services n.i.e 46 -14 -2 -2 Credit 47 26 4 3 Debit 48 -40 -6 -4 1.B Primary Income 49 -1104 -154 -117 Credit 50 4946 689 525 Debit 51 -6050 -843 -642 1.C Secondary Income 52 194 27 21 Credit 53 619 86 66 Debit 54 -425 -59 -45 2. Capital and Financial Accounts (Including Net Errors and Omissions for the Quarter) 55 -11885 -1656 -1262 2.1 Capital Account 56 -5 -1 -1 Credit 57 2 0 0 Debit 58 -7 -1 -1 2.2. Financial Account (Including Net Errors and Omissions for the Quarter) 59 -11879 -1655 -1261 2.2.1 Financial Account (Excluding Reserve Assets, But Including Net Errors and Omissions for the Quarter) 60 -14114 -1966 -1499 Including: 2.2.1.1 Direct Investment 61 -2417 -337 -258 2.2.1.1.1 Assets 62 -3468 -483 -368 2.2.1.1.1.1 Equity and investment fund shares 63 -2309 -322 -245 2.2.1.1.1.2 Debt instruments 64 -1159 -162 -123 2.2.1.1.2 Liabilities 65 1052 147 110 2.2.1.1.2.1 Equity and investment fund shares 66 1535 214 162 2.2.1.1.2.2 Debt instruments 67 -484 -67 -52 2.2.2 Reserve Assets 68 2234 311 238 2.2.2.1 Monetary gold 69 0 0 0 2.2.2.2 Special drawing rights 70 -86 -12 -9 2.2.2.3 Reserve position in the IMF 71 -25 -4 -3 2.2.2.4 Foreign exchange reserves 72 2345 327 250 2.2.2.5 Other reserves 73 0 0 0 3. Net Errors and Omissions 74 / / / Note:1. The table is compiled according to BPM6. 2."Credit" is presented as positive value while "debit" as negative value, and the balance is the sum of the "Credit" and the "Debit". All items herein refer to balances, unless marked with "Credit" or "Debit". 3.The RMB denominated BOP statement is converted from the USD denominated BOP statement for the quarter using the period average central parity rate of RMB against USD. The SDR denominated quarterly BOP statement is converted from the USD denominated BOP statement for the quarter using the period average exchange rate of SDR against USD. 4.Since net errors and omissions are included, the amount of the capital and financial accounts is the opposite number of the difference in the current account. 5. According to preliminary statistics, in the first quarter of 2025, the equity other than reinvestment of earnings under direct investment liabilities (credit) was USD 19.1 billion (RMB 136.9 billion). 6.This table employs rounded-off numbers. 2025-05-09/en/2025/0509/2302.html
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As shown in the statistics of the State Administration of Foreign Exchange (SAFE), in April 2025, the amount of foreign exchange settlement and sales by banks was RMB 1540.8 billion and RMB 1571.5 billion, respectively. During January to April 2025, the accumulative amount of foreign exchange settlement and sales by banks was RMB 5337.3 billion and RMB 5781.5 billion, respectively. In the US dollar terms, in April 2025, the amount of foreign exchange settlement and sales by banks was USD 213.9 billion and USD 218.2 billion, respectively. During January to April 2025, the accumulative amount of foreign exchange settlement and sales by banks was USD 742.9 billion and USD 804.8 billion, respectively. In April 2025, the amount of cross-border receipts and payments by non-banking sectors was RMB 5064.4 billion and RMB 4940.2 billion, respectively. During January to April 2025, the accumulative amount of cross-border receipts and payments by non-banking sectors was RMB 18606.2 billion and RMB 18111.4 billion, respectively. In the US dollar terms, in April 2025, the amount of cross-border receipts and payments by non-banking sectors was USD 703.1 billion and USD 685.8 billion, respectively. During January to April 2025, the accumulative amount of cross-border receipts and payments by non-banking sectors was USD 2590.2 billion and USD 2521.2 billion, respectively. Addendum: Glossary and relevant definitions Balance of payments (BOP) refers to all economic transactions between residents and non-residents. Foreign exchange settlement and sales by banks refers to settlement and sale transaction that bank executes for customers and for the banks themselves, including statistic data on settlements of forward contracts for foreign exchange settlement and sales and the exercises of option, and excluding the transactions in the interbank foreign exchange market. The statistic reporting date of Foreign exchange settlement and sales by banks should be the trade day of the Foreign exchange settlement and sales transaction. By definition, foreign exchange settlement means that foreign exchange holders sell foreign exchange to banks, and foreign exchange sales means that banks sell foreign exchange to foreign exchange buyers. The newly signed contract amount of forward foreign exchange settlement and sales refers to the binding forward contract between a bank and its client that predetermines foreign exchange currency, amount, exchange rate and tenor which to be executed upon maturity. The unwind amount of forward foreign exchange settlement and sales refers to, where client is unable to perform the original forward contract due to change in its real demand, client to fully or partially close its forward position by executing another deal with opposite direction to the original contract. The rolling amount of forward foreign exchange settlement and sales refers to client to adjust the settlement date of original contract due to change in its real demand. The outstanding amount of forward foreign exchange settlement and sales by the end of the current period refers to the total amount of forward contracts accumulated from all non-matured forward contracts with client. The net Delta exposure of outstanding options refers to the implied foreign exchange spot risk exposure from outstanding option contracts that bank executed with client. The cross-border receipts and payments by non-banking sectors refers to the receipts and payments between domestic non-banking sectors (including institutional and individual residents) and non-residents through domestic banks, excluding receipts and payments in cash. In particular, the statistics includes cross-border receipts and payments between non-banking sectors and non-residents through domestic banks (including RMB and foreign currency), and domestic receipts and payments between non-banking sectors and non-residents through domestic banks (temporarily excluding domestic receipts and payments in RMB between individual residents and non-resident individuals). Data are collected when customers conduct receipts and payments with non-resident counterparties at domestic banks. Specifically, the receipts refer to the capital of non-banking sectors received from non-residents via domestic banks; the payments refer to the capital of non-banking sectors paid to non-residents via domestic banks. 2025-05-19/en/2025/0519/2303.html
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As shown in the statistics of the State Administration of Foreign Exchange (SAFE), in March 2025, the amount of foreign exchange settlement and sales by banks was RMB 1360.1 billion and RMB 1374.2 billion, respectively. During January to March 2025, the accumulative amount of foreign exchange settlement and sales by banks was RMB 3796.5 billion and RMB 4210.0 billion, respectively. In the US dollar terms, in March 2025, the amount of foreign exchange settlement and sales by banks was USD 189.6 billion and USD 191.6 billion, respectively. During January to March 2025, the accumulative amount of foreign exchange settlement and sales by banks was USD 529.0 billion and USD 586.6 billion, respectively. In March 2025, the amount of cross-border receipts and payments by non-banking sectors was RMB 4964.3 billion and RMB 4611.4 billion, respectively. During January to March 2025, the accumulative amount of cross-border receipts and payments by non-banking sectors was RMB 13541.8 billion and RMB 13171.3 billion, respectively. In the US dollar terms, in March 2025, the amount of cross-border receipts and payments by non-banking sectors was USD 692.0 billion and USD 642.8 billion, respectively. During January to March 2025, the accumulative amount of cross-border receipts and payments by non-banking sectors was USD 1887.1 billion and USD 1835.4 billion, respectively. Addendum: Glossary and relevant definitions Balance of payments (BOP) refers to all economic transactions between residents and non-residents. Foreign exchange settlement and sales by banks refers to settlement and sale transaction that bank executes for customers and for the banks themselves, including statistic data on settlements of forward contracts for foreign exchange settlement and sales and the exercises of option, and excluding the transactions in the interbank foreign exchange market. The statistic reporting date of Foreign exchange settlement and sales by banks should be the trade day of the Foreign exchange settlement and sales transaction. By definition, foreign exchange settlement means that foreign exchange holders sell foreign exchange to banks, and foreign exchange sales means that banks sell foreign exchange to foreign exchange buyers. The newly signed contract amount of forward foreign exchange settlement and sales refers to the binding forward contract between a bank and its client that predetermines foreign exchange currency, amount, exchange rate and tenor which to be executed upon maturity. The unwind amount of forward foreign exchange settlement and sales refers to, where client is unable to perform the original forward contract due to change in its real demand, client to fully or partially close its forward position by executing another deal with opposite direction to the original contract. The rolling amount of forward foreign exchange settlement and sales refers to client to adjust the settlement date of original contract due to change in its real demand. The outstanding amount of forward foreign exchange settlement and sales by the end of the current period refers to the total amount of forward contracts accumulated from all non-matured forward contracts with client. The net Delta exposure of outstanding options refers to the implied foreign exchange spot risk exposure from outstanding option contracts that bank executed with client. The cross-border receipts and payments by non-banking sectors refers to the receipts and payments between domestic non-banking sectors (including institutional and individual residents) and non-residents through domestic banks, excluding receipts and payments in cash. In particular, the statistics includes cross-border receipts and payments between non-banking sectors and non-residents through domestic banks (including RMB and foreign currency), and domestic receipts and payments between non-banking sectors and non-residents through domestic banks (temporarily excluding domestic receipts and payments in RMB between individual residents and non-resident individuals). Data are collected when customers conduct receipts and payments with non-resident counterparties at domestic banks. Specifically, the receipts refer to the capital of non-banking sectors received from non-residents via domestic banks; the payments refer to the capital of non-banking sectors paid to non-residents via domestic banks. 2025-04-22/en/2025/0422/2299.html
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According to the statistics of the State Administration of Foreign Exchange (SAFE), the Chinese foreign exchange market (excluding foreign currency pairs, the same below) recorded total transactions of RMB 21.90 trillion (equivalent to USD 3.05 trillion) in February 2025. In terms of markets, the transactions volume of client market was RMB 3.08 trillion (equivalent to USD 0.43 trillion), and the transactions volume of interbank market was RMB 18.82 trillion (equivalent to USD 2.62 trillion).In terms of products, the cumulative transactions volume of the spot market was RMB 7.71 trillion (equivalent to USD 1.08 trillion), and that of the derivatives market was RMB 14.19 trillion (equivalent to USD 1.98 trillion). From January to February 2025, a total of RMB 44.25 trillion (equivalent to USD 6.16 trillion) was traded in the Chinese foreign exchange market. 2025-03-28/en/2025/0328/2296.html
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According to the statistics of the State Administration of Foreign Exchange (SAFE), the Chinese foreign exchange market (excluding foreign currency pairs, the same below) recorded total transactions of RMB 26.99 trillion (equivalent to USD 3.76 trillion) in March 2025. In terms of markets, the transactions volume of client market was RMB 3.77 trillion (equivalent to USD 0.53 trillion), and the transactions volume of interbank market was RMB 23.21 trillion (equivalent to USD 3.24 trillion). In terms of products, the cumulative transactions volume of the spot market was RMB 9.50 trillion (equivalent to USD 1.32 trillion), and that of the derivatives market was RMB 17.49 trillion (equivalent to USD 2.44 trillion). From January to March 2025, a total of RMB 71.23 trillion (equivalent to USD 9.93 trillion) was traded in the Chinese foreign exchange market. 2025-04-25/en/2025/0425/2301.html
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The State Administration of Foreign Exchange (SAFE) recently issued the Regulations on Foreign Exchange Administration of the Overseas Direct Investment of Domestic Institutions (hereinafter referred to as the Regulations). The responsible person of the SAFE was interviewed on the relevant content of the Regulations. Q: What are the context and significance of issuing the Regulations? A: In the context that the world economy and finance are progressively becoming globalized and integrated, there has been a growing demand of domestic enterprises, including private enterprises, to make overseas direct investments, in parallel with a louder voice for streamlining the existing examination and approval procedures for overseas direct investment as well as for providing financing support for enterprises under overseas direct investment. In order to promote the development and expansion of the overseas direct investment of domestic institutions, on the premise of fulfilling the needs for the balanced management of the balance of payments, the SAFE issued successively over the past several years a series of policies and measures with respect to the reform and standardization of foreign exchange administration approaches to overseas direct investment. To systematically straighten out the separate regulatory documents regarding overseas direct investment issued during recent years and to work out a new set of foreign exchange administration regulations that fits with the needs of the current foreign exchange receipt and payment situation as well as with overseas direct investment administration practices, the SAFE has drawn up the Regulations on Foreign Exchange Administration of the Overseas Direct Investment of Domestic Institutions, and has extensively solicited opinions from overseas investment authorities, relevant industry authorities, and all circles of society. The Regulations were formally promulgated on July 13, 2009, and will be implemented as of August 1, 2009. China is currently at the critical stage of coping with the global financial crisis. The overall economic situation is favorable and promising. Further streamlining the foreign exchange administration of overseas direct investment and the launching of foreign exchange administration policy aimed at encouraging the go-global move of enterprises will be conducive for enterprises to better grasp the opportunities of overseas direct investment, to reduce the costs of overseas investment, to promote the facilitation of trade and investment, to promote the opening-up process of cross-border capital transactions in a steady and orderly manner, and to promote a basic equilibrium in the balance of payments of our country. Q: What reform measures are specified in the Regulations? A: First, the sources of foreign exchange funds for overseas direct investment have been expanded. Domestic institutions can make overseas direct investments by use of various fund sources, such as self-owned foreign exchange funds, domestic foreign exchange loans in line with the regulations, foreign exchange purchased with RMB or tangible assets, intangible assets, or profits retained overseas. Second, the examination and verification of foreign exchange fund sources for overseas direct investment have been altered from ex ante examination to ex post registration. Third, domestic institutions are allowed to provide support for follow-up financing of enterprises under overseas direct investment by means of commercial loans and financing guarantees. Fourth, the SAFEs administration of outward remittances of overseas investment funds by domestic institutions has been adjusted from the previous examination and approval system to a registration system. Foreign exchange designated banks can handle the outward remittances of investment funds for domestic institutions after conducting authenticity examinations and verifications of the relevant documents presented by the domestic institutions. Fifth, domestic institutions are allowed to remit outward preceding expenses of a certain proportion of the total amount of investment at the preparatory stage prior to the formal establishment of their overseas projects after obtaining approval from the SAFE. Sixth, the disposal and administration principle for overseas retention or inward remittances of profits of enterprises under overseas investment and earnings from capital variations such as capital reductions, equity transfers, liquidations, and so forth have been clarified. Seventh, a full aperture exchange administration system for overseas direct investment has been established. Besides the traditional domestic non-financial institutions, the foreign exchange administration and applicability of regulations of overseas direct investment of domestic financial institutions have been clarified and standardized. Eighth, by making full use of the foreign exchange management information system for direct investment, a statistical and monitoring mechanism for cross-border fund inflows and outflows under overseas direct investment has been established. Q: What possible risks might occur in terms of foreign exchange administration of overseas direct investment after implementation of the said Regulations? How can we guard against such risks? A: As specified by the Regulations, the previous examination of foreign exchange fund sources for overseas direct investment has been altered to ex post recording for file and registration. In order to guard against possible risks when there are marked changes in the situation of the national balance of payments, the Regulations have made it clear that the SAFE can make adjustments to the relevant policies concerning the scope of the sources and the management modes of the foreign exchange funds for the overseas direct investment of domestic institutions and the overseas retention of profits generated from overseas direct investments of domestic institutions. In practice, the foreign exchange designated banks are required to first examine the situation of the foreign exchange fund sources for overseas direct investments of domestic institutions which are registered with the SAFE, and to handle the outward remittances of overseas investments for the domestic institutions. All in all, risks arising from the change in the examination of the foreign exchange fund sources for overseas investment are limited, and can be prevented through collaboration with other departments as well as through the registration procedures of the SAFE. Q: Which kinds of investment do the overseas direct investments made by banks and non-bank financial institutions belong to? A: The overseas direct investment stated herein refers to acts by banks and non-bank financial institutions through which the said banks and non-bank financial institutions establish subordinate or affiliated institutions outside the territory of China, or make equity acquisitions of overseas banks or non-bank financial institutions so as to acquire the rights and interests of such overseas institutions, including ownership, rights of control, or business management rights. For example, as banks and non-bank financial institutions set up subsidiaries or branches outside the territory of China, they may purchase the equity of former shareholders of overseas banks or non-bank financial institutions and the like. Such kinds of investment are different from the indirect investment made by banks and non-bank financial institutions outside the territory of China, i.e., purchases made by banks and non-bank financial institutions of overseas assets such as products on the overseas capital market or currency market tools after obtaining approval from the relevant authorities of China. Q: What are the foreign exchange administration principles for overseas direct investment by banks and non-bank financial institutions? A: The regulations clarify the legal basis for foreign exchange administration of overseas direct investment of domestic financial institutions, which implement full aperture administration of overseas direct investment of domestic institutions, i.e., both financial institutions and non-financial institutions, if ready to make overseas direct investment, shall complete the foreign exchange registration and exchange procedures in accordance with the Regulations. Currently, the procedures for overseas direct investment of domestic institutions are completed via the foreign exchange management information system for direct investment of the SAFE. Thus, to facilitate the smooth operation of overseas direct investment, financial institutions shall make sure the following tasks are completed after the promulgation of the Regulations: 1. Given that the foreign exchange management information system for direct investment has already been put online, for the purpose of ensuring the completeness and accuracy of the statistical data on cross-border fund inflows and outflows under overseas direct investment as well as guaranteeing the smooth operation of the foreign exchange registration and foreign exchange business for overseas direct investment, financial institutions that have already made overseas direct investments shall, prior to the formal implementation of the Regulations, complete the procedures for additional input of relevant information about their overseas investments at the Foreign Exchange Administrations in their localities, which shall be completed before December 31, 2009. 2. The examination of the foreign exchange fund sources for overseas direct investments of financial institutions has been altered to ex post registration, which requires these financial institutions to complete the procedures for foreign exchange registration for overseas investment at the Foreign Exchange Administrations in their localities and to demonstrate the sources of their foreign exchange funds after obtaining approval from the relevant departments. Q: What are the differences in the administration of outward remittances between preceding expenses and overseas investment funds? A: If domestic institutions need to remit outward a certain amount of preceding expenses prior to the establishment of projects or enterprises under overseas direct investment, the said institutions shall file an application with the Foreign Exchange Administrations in their localities, and shall go through the procedures for outward remittances at the banks by presenting the examination and approval documents issued by the Foreign Exchange Administrations. If the domestic institutions need to remit outward overseas investment funds other than the preceding expenses, the banks shall only ask that the domestic institutions present the approval documents issued by the overseas direct investment authorities and the foreign exchange registration certificate for overseas direct investment, and shall handle the relevant procedures after querying the relevant information in the foreign exchange management information system for direct investment. Q: Do domestic institutions still need to receive a paper-copy foreign exchange registration certificate after the foreign exchange management information system for direct investment is put online? A: The online operation of the foreign exchange management information system for direct investment means that all businesses under direct investment will be processed via the system, thus realizing electronic informational management over overseas direct investment of domestic institutions. As a result, the previous paper copy foreign exchange registration certificate issued by the Foreign Exchange Administrations will be replaced with the IC card for foreign exchange registration, which will facilitate electronic operations and management of the relevant business. 2009-07-15/en/2009/0715/897.html
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Q11: Will China use its foreign exchange reserves as a trump card or as an atomic weapon? A: We have always emphasized our role as a responsible long-term investor. During the investment and operations of our foreign exchange reserves, we will strictly follow the rules of the market and the laws and regulations of the country concerned. Meanwhile, we will use the reserves as a financial investor and will not seek control over those investments. The investment and operations of foreign exchange reserves must be mutually beneficial; therefore, we let things run their natural course, so to speak, which means we will actively cooperate with those countries that welcome our investment. But if any country is doubtful, we will slow down and try to reach agreement through communications. As has been proven by the facts, the above concerns and worries are completely ungrounded. Q12: We know that the US fiscal deficit is surging, but what does that mean for the US dollar? A: Any prediction on trends for the US dollar must be based on the economic situation not only in the US, but also that in other countries. In the wake of the financial crisis, the US launched massive financial bailout initiatives, resulting in a mounting fiscal deficit and worries about a further depreciation of the dollar. However, we must bear in mind that the weakening of the dollar is also related to the currencies of other countries and regions, which have their own problems. Countries in Europe, for example, are deep in debt. As can be seen from recent developments, the US dollar is strengthening against some currencies, including the euro. From the end of 2009 to May 2010, for instance, the US dollar rose 20 percent against the euro. Going forward, whether the dollar will go up or down will depend on the prospects for an economic recovery in the US and the entire world, as well as on the economic policies of the major economies including those of the US. We hope that major global issuers of currency, the US in particular, will adopt responsible policy measures, fully take into account fiscal deficit pressures and threats of inflation, appropriately arrange an exit mechanism for the loose monetary policies, reduce reliance on debt expansionary policies, shoulder the responsibility and obligation to maintain currency stability, and protect the interests of investors. Q13: Will more or less of Chinas foreign exchange reserves go into US treasuries? A: The US treasury market is the largest of its kind in the world. Given its safety, liquidity, large market volume, and comparatively low transaction costs, for a long time it has been favored not by only domestic investors (over 50 percent of government debt is bought within the US), but also by international investors, including the major central banks throughout the world. As Chinas management of its foreign exchange reserves emphasizes safety, liquidity, as well as maintenance and added value, based on our needs and judgments, we tend to diversify our allocation of assets on international financial markets and the US treasury market is an important market. For a long time, there has been speculation whether China will buy more or less US treasuries with her foreign exchange reserves. It has even been stated that Chinas massive holdings of US dollar assets constitute a threat to the US. The truth is that using foreign exchange reserves to buy American treasury bonds is an investment behavior on the market, and the same is true for an increase or decrease in holdings. Fluctuations in economic cycles and changes in supply and demand, among other factors, can lead to ups and downs in treasury debt prices, and changes in other asset prices can also affect the comparative attractiveness of treasuries. Based on these observations, we have been closely following and analyzing various changes in the market and constantly making dynamic optimization and operational adjustments. This should not be interpreted politically. The outbreak of the recent financial crisis prompted the US to adopt monetary and fiscal stimulus policies, resulting in a sharp increase in the fiscal deficit and a greater share of outstanding national debt in GDP, hence producing worries about the safety of assets in the US. Chinas foreign exchange reserves are engaged in long-term diversified investment, with dynamic changes among different assets, in order to effectively control the overall risks, to allow sufficient liquidity, and to achieve overall stability of value. Meanwhile, China has been calling on the US to act as a responsible power by taking concrete measures to safeguard US and global economic sustainability, to protect the interests of investors, and to uphold their confidence. Q14: Are foreign exchange reserves mainly invested in relatively high-grade treasury bond assets? A: Foreign exchange reserves are mainly invested in financial products with relatively stable investment income and low risks, which mainly include assets related to governments, institutions, international organizations, and corporations in the developed and major developing countries, and mutual funds and various other products such as inflation-protected bonds and asset-backed securities. We need to take into consideration many factors in the allocation of our foreign exchange reserves and we do not merely buy products with high-grade investments. China now has more than two trillion dollars of foreign exchange reserves. With so much capital, many factors are taken into consideration when purchasing financial products, such as the market capacity of the invested products. If the treasury bonds of a nation enjoy high credibility and repayment capability, but are only several hundred million or several billion US dollars, and are traded mainly on the domestic market and are seldom available on the international financial market, then such products can hardly satisfy our investment demands. In addition, whether the assets risk-return characteristics and related functions can meet our portfolio investment needs and requirements for risk diversification, and efficiently withstand inflation are all important factors that need to be considered. Our foreign exchange reserves are a stable, responsible, and long-term investment in the international financial market and we never engage in speculation. Active speculators in the international financial market go after arbitrage opportunities, and some of them even take the initiative to create them. In contrast, foreign exchange reserves seek to maintain or increase the value of assets, putting the safety of the reserve assets at top of the agenda. All of these operational ideas are conducive to the stability of the international financial market. Q15: Are foreign exchange reserves invested in higher-risk financial products such as stocks and private equity? What is the size of such investments? A: We have strict investment standards and risk management procedures for the various assets that can be invested with foreign exchange reserves. When choosing varieties of investment, it is imperative to consider their safety, liquidity, long-term and short-term returns on investment, and other characteristics. Meanwhile, it is also necessary to take into account the correlations with other assets. Putting low correlated or negative correlated assets in the same portfolio can offset each other at different stages of the economic cycle, which is conducive to reducing the overall risk and to enhancing the flexibility of asset allocation and risk management. We do not rule out any investment products. But strict risk assessment and control are needed to decide upon which product we should invest in. In other words, according to the above-mentioned standards, it is necessary to determine whether the products are in line with the principles of safety, liquidity, and maintenance and increments of value of the foreign exchange reserves, and whether they can achieve the effect of risk diversification. As soon as they meet these standards, they will be included in our decision-making and risk management procedures. Q16: Is China considering further increasing its gold holdings? And when? A: Gold has many advantages, such as high international recognition, a good capability to maintain value, and an ability to make emergency payments. Meanwhile, investment in gold is subject to certain restrictions, which makes it impossible for gold to become our main channel for foreign exchange reserve investment. First, gold has a very limited market capacity. Annual global gold output is only 2,400 tons, and current demand and supply is basically balanced. If we buy gold on a large scale, the international price of gold will definitely be pushed up. When Chinese people go shopping malls to buy commodities like gold jewelry, they would be faced with rising prices, which would end up hurting the interests of our domestic consumers. Chinas gold price is generally in line with that of the world market. Second, gold prices fluctuate considerably. As the international price of gold is subject to the impact of the geopolitics of interest rates, supply-demand relations, and speculation, they often fluctuate sharply. In addition, gold does not bring interest income and bears the costs of storage, transportation insurance, and so forth. Based on the history of the past thirty years, the risk-return characteristics of gold are not that good. Gold is protected from inflation, but many other assets have this characteristic as well. Last, increasing gold holdings does not have a notable overall effect on the diversification of foreign exchange reserves. During the past several years, China has increased its holdings of gold reserves by over 400 tons, reaching total holdings of 1,054 tons. Even if this were to be doubled, it would only disperse thirty to forty billion US dollars of our foreign exchange reserves, raising the proportion of gold reserves by merely one to two percentage points. In general, we will take a prudent approach when considering whether to increase or decrease our gold reserves according to demand and the market. (To be continued) 2010-07-07/en/2010/0707/939.html
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In order to prevent and crack down on hot money and other kinds of cross-border fund inflows in violation of the regulations, to maintain the healthy and steady operation of the foreign exchange market, and to ensure the economic and financial security of the state, since the latter half of February 2010, the State Administration of Foreign Exchange (SAFE) has launched special campaigns to struggle against hot money and other kinds of fund inflows in violation of the regulations in some provinces (regions and cities) with massive inflows of foreign exchange funds. To date, 197 cases of foreign exchange transactions in violation of the regulations have been disclosed, involving a total amount of USD7.34 billion. At the beginning of October 2010, the SAFE launched a new round of special inspections to combat foreign exchange fund inflows in violation of the laws and regulations. In total, 3 head offices of commercial banks, 33 branches of Chinese-funded banks, and 9 branches of foreign-funded banks have been inspected, covering areas such as foreign exchange settlement and sales, short-term external debt, offshore financing, sources and utilization of foreign exchange funds, and so on. The inspections show that with constant efforts to improve financial services, the majority of the banks have enhanced their awareness of business compliance, and as a result overall compliance has improved. However, it was also found that some banks had operated in violation of the relevant regulations. The major forms of violations include: the amount of the short-term debt exceeding the quota, illegal foreign exchange settlement of capital and settlement and sale of foreign exchange by individuals, fund collections and payments under the current account and the capital account in violation of the regulations on the administration of foreign exchange accounts, failure to conduct authenticity examinations when offering foreign exchange transaction services for clients, and so forth. By complying with the relevant laws, the SAFE has dealt with the said cases in a centralized manner and has imposed severe punishments. Since October 2010, the SAFE has imposed penalties on banks conducting business in violation of the regulations in 20 regions, including Guangdong, Jiangsu, Beijing, Shanghai, and so forth. The entities involved include 79 branches of 16 incorporated banks, such as the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), the Bank of China (BOC), China Construction Bank (CCB), China CITIC Bank, Shanghai Pudong Development Bank (SPDB), Xiamen International Bank, and Yamaguchi Bank. Penalties have been imposed in the form of fines, suspensions of certain kinds of foreign exchange businesses, punishment of senior management, and so forth. In order to warn and educate the banks and their branches, to further enhance the banks awareness of business compliance, and to create social synergy to struggle against the hot money,the SAFE circulated information about the cases of non-compliance in various batches. The first batch of typical cases, involving banks that illegally conducted foreign exchange business and were penalized, was announced on October 28, 2010. Now information about the second batch of cases is being circulated as follows according to the progress of the relevant inspections: In January 2009, the sub-branch of the ICBC in Yanbu county of Foshan city failed to scrutinize the vouchers for foreign exchange settlement and handled a foreign exchange settlement deal involving capital totaling USD26.32 million for a real estate company in Foshan, which violated the regulations on the administration of foreign exchange settlement of capital. According to the Regulations of the Peoples Republic of China on Foreign Exchange Administration (hereinafter referred to as the Regulations), the SAFE imposed fines on the said sub-branch and suspended its capital settlement business for 3 months. Meanwhile, fines were imposed on two senior managers in the said sub-branch. During the period from January to December 2009, the sub-branch of the ICBC in Hanjiang county of Yangzhou city failed to scrutinize the vouchers for the settlement of foreign exchange and concluded 22 deals of foreign exchange settlement of capital for three foreign-invested enterprises, including a textile company in Yangzhou, involving a total amount of USD19.174 million. Such behavior was deemed to be in breach of the relevant regulations on the administration of foreign exchange settlement of capital. Therefore, the SAFE imposed fines on the said sub-branch and suspended its capital settlement business for 3 months pursuant to the regulations. In November 2009, the Liuli sub-branch of the CCB in Shanghai failed to scrutinize the vouchers for the settlement of foreign exchange and completed one deal of foreign exchange settlement of capital totaling HKD63.1166 million for a shopping company. Furthermore, the inspection revealed that no vouchers were issued for HKD26.7212 million of the total amount. This violated the regulations on the administration of foreign exchange settlement of capital. In light of this, the SAFE imposed fines on the sub-branch and suspended its capital settlement business for 3 months pursuant to the regulations. In September 2009, the Sanyuan sub-branch of the CCB Beijing branch failed to examine vouchers in the amount of USD1.73 million for foreign exchange settlement when handling foreign exchange settlement business for individuals in excess of the annual total limit. Such behavior was deemed to be in violation of the relevant regulations on the administration of foreign exchange settlement of capital. The SAFE thereby imposed fines on the said sub-branch and suspended its foreign exchange settlement and sale business for 6 months pursuant to the regulations. In April 2009, the Baoan sub-branch of the CCB Shenzhen branch settled USD2.3 million-worth of short-term loans in foreign exchange for an instrument company in Shenzhen. Such behavior was deemed to be in violation of the relevant regulations on the administration of foreign exchange settlement under the capital account. The SAFE thereby imposed fines on the sub-branch and suspended its foreign exchange settlement business for capital projects for 3 months according to the regulations. During the period from March 2008 to May 2010, the Fuzhou branch of the Xiamen International Bank handled 33 foreign exchange settlement deals without using the information system for the administration of foreign exchange settlement and sale for individuals, involving a total amount of HKD 17.2842 million. This violated the relevant regulations on the administration of individual foreign exchange. The SAFE thereby imposed fines on the said branch and suspended its foreign exchange settlement business for individuals for 6 months according to the regulations. During the period from February to October 2009, the Zhongxing sub-branch of the SPDB in Ningbo city handled 56 foreign exchange settlement deals for a person surnamed Dong and 55 other domestic individuals by splitting large sums of foreign exchange into smaller parts, involving a total amount of USD2.7659 million. In accordance with the regulations, the SAFE imposed fines on the said sub-branch. In May, July, and August 2010, the business department of the Dalian branch of the China CITIC Bank had USD1.3779 million-worth of capital settled through 3 petty cash deals for a real estate company in Dalian. The department failed to scrutinize the vouchers for the foreign exchange settlement, resulting in a violation of the relevant regulations on the administration of capital settlement business. The SAFE thereby imposed fines on the department and suspended its capital settlement business for 3 months pursuant to the regulations. In December 2009, the Jiangnan Sub-Branch of the ICBC in Yulin city completed 14 foreign exchange settlement deals in cash for individuals by splitting large sums of money into smaller parts, involving a total amount of USD67, 000. In May 2010, the business department of the ICBC Yulin branch concluded 5 deals of spot exchange settlement for individuals by splitting large sums of money into smaller parts, totaling HKD 2.3 million. Such behavior was deemed to be in violation of the relevant regulations on the administration of individual foreign exchange, and the SAFE thereby imposed fines on the said sub-branch and branch and suspended their foreign exchange settlement and sale business for 3 months pursuant to the regulations. The designated foreign exchange banks, as the major channels for conducting foreign exchange business, should firmly embrace the philosophy of scientific development and fulfill their social responsibilities in an earnest manner and in strict compliance with the regulations on foreign exchange administration. The banks referred to in this circular should attach great importance to their violations, examine their business operations, and rectify any acts of non-compliance. Other banking institutions should draw lessons from the above-mentioned cases so as to strengthen their internal management and to operate their businesses according to the laws and regulations. The foreign exchange authorities will continue to improve financial services to facilitate the operation of market entities; meanwhile, they will intensify supervision of the foreign exchange business of banks, enhance the approaches for foreign exchange inspections, and crack down severely on hot money and other kinds of cross-border fund flows that do not comply with the law, thus promoting the healthy development of the foreign-related economy and finance. 2010-12-29/en/2010/1229/973.html
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To ensure the economic and financial security of the state, crack down strongly on the cross-border flow of hot money, and maintain order in the foreign exchange market, on November 1, 2010 the State Administration of Foreign Exchange (hereinafter referred to as the SAFE) announced a first batch of cases involving some enterprises and individuals that carried out illegal foreign exchange transactions and were subjected to penalty. Now a second batch of such cases, based on the progress in the relevant inspections, is announced as follows: From early 2009 to March 2010, Xinya Electronic Technology Co., Ltd. in Dongguan city, Guangdong province, collected 65 advance payments worth USD4.8313 million but the verification and writing-off formalities were six months overdue, which violated the relevant provisions on the administration of the verification and writing-off of export proceeds in foreign exchange. In light of this, the SAFE rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations on the Administration of the Foreign Exchange System of the Peoples Republic of China (hereinafter referred to as the Regulations). In September 2009, Dading Handbags Co., Ltd. in Zengcheng city, Guangdong province, was found holding 2 payments totaling USD1.05 million in foreign exchange for the processing of imported materials, but the verification and writing-off formalities were six months overdue, which violated the relevant provisions on administration of the verification and writing-off of export proceeds in foreign exchange. In addition, the said company overcharged in foreign currency for the processing of imported materials and used some amounts of Renminbi settled thereof for stocks and securities investments. In light of this, the SAFE rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations. In May 2009, Feihua Textiles Co., Ltd. in Haimen city, Jiangsu province, due to a fake purchase and sales contract signed with Meidan Construction Materials Trading Co., Ltd. in Haimen city, had USD3.0679 million-worth of foreign exchange from foreign investors settled through 11 transactions, and Meidan Construction Materials Trading Co., Ltd. in Haimen city transferred the settled capital in the amount of RMB20.9103 million via online banking to the account of a personal debit card. This case was deemed to be in violation of the relevant provisions on the administration of settlement of foreign exchange, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations. From February to May 2008, Wanrong (Liaocheng) Gardening Engineering Co., Ltd. in Shandong province handled the settlement of USD63.32 million-worth of foreign exchange from foreign investors in payment for a construction project. Of the Renminbi resulting therefrom, the said company transferred RMB147.89 million to the account of its wholly-owned property subsidiary through different channels, used RMB15 million to purchase real estate outside of Shandong province, and lent RMB279.5 million to other domestic enterprises. Such behavior was deemed to be in violation of the relevant regulations on the administration of settlement of foreign exchange, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations. From September to December, 2009, Qian An VV Lan Shan Building Materials Company in Tangshan city, Hebei province, settled EUR614,400-worth of foreign investment capital based on invalid documents, and then transferred the RMB6 million resulting therefrom to the Renminbi account of Qian An Lanshan Cement Co., Ltd., a shareholder in the Chinese party thereof. Such behavior was deemed to be in violation of the relevant provisions on administration of the settlement of foreign exchange capital, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations. From November to December 2008, a person surnamed Huang, a local citizen of Jinhua city, Zhejiang province, based on 18 cargo declarations for export, for which the verification and writing-off of the export proceeds in foreign exchange had been completed, handled a settlement of USD1.7485 million through a personal foreign exchange account thereof. Such behavior was deemed to be in violation of the Regulations. According to the Regulations, the SAFE rendered a decision to impose a fine on Huang as an administrative penalty. In December 2006, after having had USD7.5 million worth of capital settled through two transactions, Guangdong Credit Orienwise Guarantee Ltd. used RMB58.6365 million resulting therefrom to purchase funds. Such behavior was deemed to be in violation of the relevant provisions on the administration of settlement of foreign exchange, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations. In June, 2010, Tianming (Shenyang) Alcohol Co., Ltd. in Liaoning province owed overseas institution(s) SGD37.6 million resulting from the performance of an external guarantee under the item of a domestic loan, but failed to register the foreign debt with the foreign exchange authorities within the prescribed time limit. Such behavior was deemed to be violation of the relevant provisions on the administration of foreign debts, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations. From February to June 2007, Yestock Technology (Shenzhen) Co., Ltd., based on a fake purchase and sales contract for GPS terminals signed with Shenzhen Chuangtou Electronic Information Technology Co., Ltd., settled HKD10.6495 million through three transactions and injected RMB9.9 million resulting therefrom into the stock market. The companys behavior was deemed to be in violation of the relevant provisions on the administration of settlement of foreign exchange, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations. On August 13, 2007, Qingmao Paper Industry Co., Ltd. in Shaxian county, Fujian province, settled HKD14.075 million based on a purchase and sales contract for machinery and equipment signed with Fujian Changfa Trading Co., Ltd. Thereafter, the said company required Fujian Changfa Trading Co., Ltd. to remit RMB13.6 million resulting therefrom to Fuzhou Huicheng Real Estate Co., Ltd. under the pretext that it was unable to start up the project immediately. The said companys behavior was deemed to be in violation of the relevant provisions on the administration of settlement of foreign exchange, and the SAFE thereby rendered a decision to impose a fine as an administrative penalty upon said company pursuant to the Regulations. When conducting economic activities, all market entities shall foster an awareness of their social responsibilities and develop their business in a sound and scientific manner in strict compliance with all policies concerning the administration of foreign exchange. The penalized enterprises and individuals shall regard this as a warning and shall firmly establish an awareness of law-abiding operations. All other enterprises and individuals shall also draw lessons from the above-mentioned cases to strengthen their self-discipline, and to operate their businesses in strict accordance with the law. The SAFE shall step up efforts to facilitate the process of trade and investment and to enhance a service-oriented awareness so as to meet the legitimate demands of enterprises and individuals for foreign exchange; meanwhile, it shall strengthen supervision and inspection of the compliance of the foreign exchange business conducted by market entities and continue to crack down on hot moneywith intensified efforts, thereby effectively maintaining the safety of China's foreign-related economy and finance. December 10, 2010 2010-12-10/en/2010/1210/970.html