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The SAFE has recently released the Circular of the SAFE Announcing that Thirty-four Regulatory Foreign Exchange Administration Documents shall be abolished and declared invalid (Huifa No. 44 [2014], hereafter referred to as the “Circular”). According to the Circular, thirty-four regulatory documents on foreign exchange administration will be abolished or will expire, among whicheighteen will be abolished and sixteen will expire. A relevant responsible person from the SAFE answered questions from reporters on related issues. I. What is the background for streamlining the laws and regulations? What are the implications? To implement the requirements of the CPC Central Committee and the State Council to streamline administration and decentralization as well as administration by law, we have streamlined the effective foreign exchange administration regulations in a centralized manner in accordance with the Opinions of the State Council on Strengthening Construction of Government by Law (Guofa No. 33 [2010]). According to the Opinions, the regulatory documents will be streamlined biennially and the results shall be announced to the public. In recent years, the SAFE has announced that more than 700 regulatory documents have been annulled or declared invalid, reducing the number of regulatory documents by over 60 percent. First, regularly streamlining the laws and regulations is conducive to improving the transparency of the foreign exchange administration policies, making it easier for the public to understand the foreign exchange administration regulations and promoting trade and investment facilitation. Second, it is favorable for establishing a clear and concise legal framework for foreign exchange administration and for promoting the transformation of government functions to carry out their regulatory responsibilities according to the law. II. What is the priority in the streamlining efforts this time? The streamlining efforts this time focus on solving problems such as the mismatch between the regulatory documents and the difficulties in applying them accurately.To be specific, such problems include inconsistencies between previous and existing regulations due to the replacement of the relevant management content with subsequent regulations; the inability to adapt to new trends and developments and the inappropriatenessof the relevant management contentfor the transformation of government functions; the expiration of the application period forthe relevant regulations or the disappearance of the objects to be adjusted. III. What laws and regulations are being streamlined at this time? The regulatory documents repealed or declared invalid this time are divided into seven major groups categorized by business type: First, five comprehensive regulatory documents. They involve off-site supervision of foreign exchange receipts and payments, declaration and cancellation after verification of the BOP for cash settlements, strengthening foreign exchange emergency management, as well as foreign exchange administration regulations for rescue-and-relief operations in Ya’an, Sichuan, and so forth. Second, two regulatory documents on foreign exchange administration under the current account. These regulations involve foreign exchange administration for foreign trade denominated in RMB by domestic institutions and the reimbursed expenses of insurance companies. Third, nine regulatory documents on foreign exchange administration under the capital account. They cover operational processes of foreign exchange administration for processing and assembly projects with overseas-supplied materials and foreign aid projects, foreign exchange administration for projects ensuring fixed returns for foreign investors, external debt management for foreign-invested banks in China, external debt registration for foreign-funded real estate enterprises, overseas funding by foreign-funded MNCs in Pudong New Area, overseas financing of the security balance quota, and outward remittances of foreign exchange profits by foreign-invested enterprises. Fourth, ten regulatory documents on the supervision of the foreign exchange of financial institutions. These documents involve supplementingcapital for foreign exchange purchases by trust companies, remittances for personal advances for foreign exchange settlements, statistics on the use of Chinese mainland RMB cards in Hong Kong, management of special stamps for foreign exchange settlements and sales by banks, limits on cash withdrawals using UnionPay Cards at overseas ATMs, content and scoring standards for the assessment of banks in implementing the provisions of foreign exchange administration, and so forth. Fifth, three regulatory documents on the RMB exchange rate and the foreign exchange market. These documents involve the exchange of the Russian Ruble, the listed exchange of the KRW, the submission of daily reports on the listed exchange rate, and so forth. Six, two regulatory documents on the BOP and foreign exchange statistics. These documents involve BOP declarationsonthe transformation of foreign-invested banks, trade credit surveys, and so forth. Seventh, three regulatory documents on foreign exchange inspections and applicable laws and regulations. These documents involve the handling of illegitimate foreign exchange futures trading institutions, restituting settlement of the capital in the qualitativeirregularities in the RNB loans through the revised Regulations on Foreign Exchange Administration, and so forth. IV. How will the businesses involved in this clean-up be handled in the future? As the eighteen repealed laws and regulations have mainly been replaced by subsequent regulations, the relevant regulations currently in force will prevail. As for the sixteen laws and regulations that have been declared invalid, no further implementation is needed since they have expired or the objects of adjustment have disappeared. In particular, after the Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Some Bank Pilots to Handle Remittancesby Individuals with Pre-settled Foreign Exchange (Huifa No. 48 [2003] and the Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Further Improving the Bank Pilots to Handle Remittances by Individuals Pre-settled Foreign (Huifa No. 51 [2009]) are repealed, administrative approvals for market access for remittancesby individuals with pre-settled foreign exchange are cancelled. But the pre-settled foreign exchange format can remain, and the banks can decide at their own discretion whether to offer this business in accordance with the relevant regulations on personal foreign exchange administration based on the market situation. V. What arrangements will the SAFE make to further streamline the laws and regulations during the next step? Next, the SAFE will further implement a long-term mechanism for streamliningthe laws and regulations to facilitate understanding by banks, companies, and individuals to apply the laws and regulations for foreign exchange administration, to promote foreign exchange administration according to the law, and to promote trade and investment facilitation. First, we will continue to thoroughly streamline the foreign exchange administration regulations to achieve new results in the clean-up as soon as possible. Second, we will promote reform of the foreign exchange administration and transformation of the administrative patterns. By combining overall promotion and making breakthroughs in key respects, we will strengthen the top-down design of the overall plan for the reform of foreign exchange administrationand will build a new foreign exchange administration framework based on streamlining administration and decentralization to satisfy the requirements for trade and investment facilitation. Third, we will update the Catalogue of Effective Laws and Regulations on Foreign Exchange Administration The SAFE will update the catalogue by the end of 2014 in accordance with the laws and regulations that have beenrepealed or declared invalid at this time. Fourth, we will compile and publish a Collection of Laws and Regulations on Foreign Exchange Administration of the People’s Republic of China (2014 version). The Collection will include the regulations on foreign exchange administration in effect and will provide explanations about thosethat have expired. 2014-11-26/en/2014/1126/1129.html
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FILE: No. 1 of the Publicity Material Series on the Balance of Payments and International Investment Position Manual (Sixth Edition)——Overview of the Balance-of-Payments Statistics and the Revision of the Manual 2014-12-04/en/2014/1204/1136.html
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To implement the requirements of the CPC Central Committee and the State Council to streamline administration and decentralization, and the administration by law, to further improve the transparency of the foreign exchange administration policies, and to promote trade and investment facilitation, the State Administration of Foreign Exchange (SAFE) has recently released the Circular of the SAFE Announcing Thirty-four Repealed and Expired Regulatory Documents on Foreign Exchange Administration (Huifa No. 44 [2014]), based on ongoing efforts to streamline effective foreign exchange administration regulations in a centralized manner. According to the Circular, thirty-four regulatory documents on foreign exchange administration will be abolished or will expire, among whicheighteen will be abolished and sixteen will expire. Such documents include five comprehensive regulations, two regulations on foreign exchange administration under the current account, nine regulations on foreign exchange administration under the capital account, ten regulations on supervision of the foreign exchange business of financial institutions, three regulations on the RMB exchange rate and the foreign exchange market, two regulations on the balance of payments and foreign exchange statistics, and three regulations on foreign exchange inspections and application of the laws and regulations. The SAFE will next continue to engage in a long-term mechanism to clear up the laws and regulations, carry out such work on a regular basis so as to provide facilitation to banks, enterprises, and individuals to understand and utilize the laws and regulations on foreign exchange administration, carry forward foreign exchange administration according to law, and promote the facilitation of trade and investment. 2014-11-26/en/2014/1126/1128.html
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FILE: No. 2 of the Publicity Material Series on the Balance of Payments and International Investment Position Manual ( Sixth Edition)--Interpretation of the Changes in Balance of Payments Forms and Statistics 2014-12-04/en/2014/1204/1137.html
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Since the beginning of 2014, the SAFE has further intensified efforts to sort out the laws and regulations, based on which the directory of major laws and regulations on foreign exchange administration currently in effect was updated. The updated Directory of Major Laws and Regulations on Foreign Exchange Administration Currently in Effect (as of July 31, 2014, hereinafter referred to as “Directory”) has been posted on the official Web site of the SAFE. The Directory includes a total of 297 laws and regulations on foreign exchange administration. Grouped into eight major items, including general foreign exchange administration, foreign exchange administration under the current account, foreign exchange administration under the capital account, regulation of the foreign exchange business of financial institutions, the RMB exchange rate and the foreign exchange market, balance-of-payments statistics, foreign exchange administration statistics, foreign exchange inspections and application of the laws and regulations, and the scientific administration of foreign exchange, the policies and regulations are further divided into some sub-items based on the their specific types of business in order to facilitate public inquiries. The State Administration of Foreign Exchange will further establish and refine the long-term mechanism for sorting out the laws and regulations and will regularly update the Directory so as to increase knowledge and its use by banks, enterprises, and individuals in an effort to promote law-based foreign exchange administration. 2014-11-26/en/2014/1126/1130.html
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On June 22, 2017, Pan Gongsheng, administrator of the State Administration of Foreign Exchange (SAFE), headed a delegation to Shenzhen for Inspections and held a seminar there to listen to the ideas, opinons and suggestions of relevant institutions on the conditions of China's foreign exchange market and the foreign exchange administration policies. According to Pan, since the beginning of this year, along with the accelerated upgrading and transformation of the economic structural adjustment, and in-depth advances of the supply-side reform, China has borne witness to steady and promisig economic growth at a mid-to-high speed. The foreign exchange market has performed stably, market expectations have remained stable, while foreign exchange reserves and RMB exchange rate have stayed steady, and cross-border capital flows and supply and demand in the foreign exchange maket have found a basic equilibrium. The cross-border trade and investment facilitation shall be further enhanced to better serve the real economy and openign up, Pan emphasized. Under the principle of the current account convertibility, efforts shall be made to duly support and ensure authentic and complying international payments and transfers under the current account, in a bid to enhance cross-border trade facilitation. The two-way liberalization of the finanical market shall be boosted in a stable and orderly manner, and the capable enterprises who meet the conditions shall be supported to be invovled in autheitc outward investments in compliance with regulations, so as to support Chinese enterprises to go global. The sound foreign exchange administration policy environment shall be built to support Chinese enterprieses to participate in the Belt and Road Initiative. Foreign exchange authorities are required to further deepen the foreign exchange administration reform and strengthen the building of their regulatory capabilities, according to Pan. The macro-prudential administration of cross-border capital flows and micro-market regulatory system shall be established to intensify ongoing and ex-post regulation. The monitoring and early warning of cross-border capital flows shall be refined and irregularities such as underground banks shall be cracked down on to safeguard the health and stability of the foreign exchange market and China's economic and financial security. As the frontier of China's reform and opening up, Shenzhen boasts a vibrant market, with market participants sensitive to policies and market signs. It is Pan's wish that Shenzhen Branch of the SAFE and participants in the foreign exchange market could break new ground and make innovations to continue to play a leading role in the new round of the reform and openning up and deliver reproducible and promotable experience with regard to the deepening of foreign exchange administration reform and the optimization of services. 2017-06-22/en/2017/0622/1319.html
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The State Administration of Foreign Exchange (SAFE) has recently released the Balance of Payments (BOP) and the International Investment Position (IIP) for the first quarter of 2017. The press spokesperson of the SAFE answered media questions on relevant issues. Q: Could you brief us on China's BOP for the first quarter of 2017? A: In the first quarter of 2017, China's surplus under the current account in the BOP was within the reasonable range, and the non-reserve financial account was in surplus, indicating China's cross-border capital flows have been remarkably improved. The surplus in trade in goods remained the major source of the surplus under the current account, with the import and export of goods registering year-on-year increases. In the first quarter of 2017, the current account recorded a surplus of USD 18.4 billion, accounting for 0.7% of GDP, which was still within the reasonable range. The trade in goods in the BOP registered a surplus of USD 82.3 billion, including USD 475 billion in exports and USD 392.7 billion in imports, which was up by 12% and 23% year-on-year respectively, a good sign of stable and rising foreign trade. But trade in services recorded a deficit of USD 60.7 billion, up by 12% year on year, as a result of an expansion of 36% in the deficit under transport due to the increases in imports as well as a rise of 5% in the deficit under travel. Non-reserve financial account registered a surplus. In the first quarter of 2017, non-reserve financial account recorded a surplus of USD 36.8 billion, compared with a deficit of USD 126.3 billion for the same period last year. On the one hand, domestic market participants became more sensible in making outbound investments. In the first quarter, China witnessed a net increase of USD 54.7 billion in external financial assets from BOP transactions. To be specific, ODI rose by USD 20.5 billion net; external portfolio investment went up by USD 14.7 billion net and other external investments climbed by USD 19.4 billion net. On the other hand, foreign investors continued to increase their investments in China. In the first quarter, external debt rose by USD 91.5 billion net, versus a net decrease of USD 13.5 billion for the same period last year. To be specific, FDI jumped by USD 33.1 billion net, which was high; portfolio investment in China rose by USD 6.8 billion net, compared with a net decrease of USD 18.9 billion for the same period last year; other investments in China surged by USD 51.6 billion net as a result of the increases in non-resident deposits, compared with a net decrease of USD 38.5 billion for the same period last year. The reserve assets dropped by a slight margin due to the BOP transactions, which contracted remarkably. In the first quarter, China's reserve assets fell by USD 2.6 billion due to the BOP transactions (excluding non-transaction factors such as foreign exchange rates and prices), or 98% both year on year and quarter on quarter. In particular, foreign exchange reserves dropped by USD 2.5 billion, and the reserve position in the IMF went down by USD 100 million. Q: Could you tell us about China's international investment position (IIB) as at the end of March 2017? A: As at the end of March, China had witnessed double quarter-on-quarter increases in external financial assets and debt. As at the end of March, China's net external assets reached USD 1.7319 trillion. Specifically, China's external assets hit USD 6.4824 trillion, and external debt amounted to USD 4.7506 trillion, up by 0.2% and 2% quarter on quarter respectively (the same below). As for external assets, most assets rose slightly except the slight decreases in other investment assets and financial derivative tool assets. To be specific, the direct investment assets rose by USD 28.7 billion or 2%; portfolio investment went up by USD 27.2 billion or 7%, reserve assets increased by USD 4.9 billion, or 0.2%; financial derivative tool assets dropped by USD 500 million or 9%; and other investment assets fell by USD 44.4 billion, or 3%. As for external debt, most items continued to recover except falls in financial derivative tool debt. Specifically, direct investment debt rose by USD 37.8 billion or 1%; portfolio investment debt went up by USD 27.5 billion, or 3%; other investment debt increased by USD 21.2 billion, or 2%; while the financial derivative tool debt shrank by USD 1.9 billion, or 28%. With regard to the composition of assets and debts, the official reserve assets constituted the majority of external financial assets, and FDI, the external debt. To be specific, of external assets, reserve assets hit USD 3.1028 trillion, accounting for 48% of total assets; ODI amounted to USD 1.3459 trillion, representing 21% of total assets; portfolio investment reached USD 392.3 billion, 6% of total assets; the financial derivative tools were USD 4.7 billion, 0.1% of total assets; and other assets reached USD 1.6367 trillion, 25% of total assets. Of external debt, FDI hit USD 2.9037 trillion, accounting for 61% of total debt; portfolio investment was USD 836.1 billion, 18% of total debt; financial derivative tools were USD 4.7 billion, 0.1% of total debt, and other investments hit USD 1.006 trillion, 21% of total debt. Overall, China still took the top spot worldwide by foreign exchange reserves, with Chinese investors becoming increasingly sensible in making outbound investments. FDI continued growing and other foreign investments in China recovered, showing foreign investors are confident in China's economic outlook. All this indicates that China's international investment position is robust. 2017-06-29/en/2017/0629/1320.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 March 2017. An official from the SAFE answered media questions on the recent situations of China's external debt. Q: Could you brief us on China's external debt for the first quarter of 2017? A: China witnessed stable growth in external debt for the first quarter of 2017. As at the end of March, China's full-scale outstanding external debt (including foreign currencies) amounted to USD 1.4378 trillion, up by USD 17.2 billion or 1.2% from the end of 2016, representing 4th consecutive month of growth in total external debt. Q: What would you say about the external debt situation in China? A: As the deleveraging of external debt came to a halt, China has registered 4th consecutive month of steady recovery of China's total external debt since the second quarter of 2016. Many factors have impacted the changes of external debt, such as economic fundamentals, cross-border financing policy and domestic and foreign financing environment. At the beginning of 2017, the People's Bank of China (PBC), together with the SAFE, published the Circular of Macro-prudential Management of Full-scale Cross-border Financing, further refining the macro-prudential management policy for cross-border financing, and expanding the room for funding abroad by banks and enterprises, which will be favorable for facilitating normal flows of external debt in compliance with regulations and serving the development of the real economy. As the domestic macro economy and cross-border capital flows recover with a good momentum for growth, and external debt reform and facilitation measures are implemented, it is anticipated that China's external debt will continue growing. Next, the PBC and the SAFE will endeavor to improve the system for external debt and capital flow management under the framework of macro-prudential management. While promoting cross-border financing and investment facilitation, they will enhance ongoing and ex-post monitoring and analysis to guard against external debt risks and safeguard the country's economic and financial security. 2017-06-30/en/2017/0630/1321.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the Balance of Payments and International Investment Position for the second quarter and the first half of 2017, and the press spokesperson of the SAFE answered media questions on relevant issues. Q: Could you brief us on China's balance of payments for the first half? A: The first half witnessed a twin surplus under the current account and the financial account (excluding reserve assets) and rising reserve assets. The surplus under the current account was within a reasonable range. In the first half, the current account registered a surplus of USD 69.3 billion, accounting for 1.2% of China's GDP and staying within the reasonable range. In particular, trade in goods in the Balance of Payments recorded a surplus of USD 214.4 billion. The export of goods was USD 1.0269 trillion and the import was USD 812.6 billion, rising by 12% and 18% year on year respectively, suggesting China's foreign trade is being stabilized, with a good momentum for growth. The financial account (excluding reserve assets) registered a surplus. In the first half, the financial account (excluding reserve assets) hit a surplus of USD 67.9 billion, compared with a deficit of USD 178.7 billion for the same period of the previous year. On the one hand, outbound investments stayed stable. In the first half, the net external financial assets derived from BOP transactions rose by USD 134.2 billion. To be specific, the net ODI assets grew by USD 41.1 billion, the net outbound portfolio investment assets, USD 40.1 billion, and other net investment assets including external deposits and loans, USD 53.6 billion. On the other hand, overseas investors increased their investments in China. In the first half, China's net external liabilities grew by USD 202.1 billion. Specifically, net FDI rose by USD 55 billion, net foreign portfolio investment, USD 20.6 billion, and other net investments such as non-residents' deposits and loans, USD 126.7 billion. Reserve assets kept rising. In the first half, China's reserve assets went up by USD 29 billion, which was attributed to the BOP transactions (excluding the impact from non-trading factors such as foreign exchange rates and prices), compared with a drop of USD 157.8 billion for the same period of the previous year. To be specific, foreign exchange reserves grew by USD 29.4 billion, while the reserve position in the IMF wend down by USD 400 million. Looking ahead into the second half, along with the continuous recovery of the world economy, external demand will grow, commodity prices will be further stabilized, the domestic economy will remain within the reasonable range, and the financial market will be further liberalized, indicating China's balance of payments will hopefully find a basic equilibrium. Q: Could you tell us about China's International Investment Position as at the end of June 2017? A: As at the end of June 2017, China's external financial assets and liabilities increased from the end of the previous year. China posted USD 1.7515 trillion in net external assets as at the end of June 2017. To be specific, the external assets hit USD 6.6446 trillion, and the external liabilities, USD 4.8931 trillion, up by 2.8% and 4.9% respectively from the end of the previous year (the same below). All of the external assets were on a steady upward trend. Specifically, direct investment assets increased by USD 52.5 billion or 4.0%; portfolio investment assets went up by USD 49.2 billion or 13.5%; financial derivative assets climbed by USD 700 million or 13.9%; other investment assets increased by USD 23.1 billion or 1.4%; and reserve assets jumped by USD 52.5 billion or 1.7%. All of the external liabilities continued recovering. In particular, direct investment liabilities rose by USD 58.6 billion or 2.0%; portfolio investment liabilities increased by USD 49.6 billion or 6.1%; financial derivative liabilities fell by USD 1.7 billion or 25.5%; and other investment liabilities went up by USD 120.6 billion or 12.2%. Looking at the items, we found from external assets that the reserve assets hit USD 3.1504 trillion, 47% of total assets; direct investment assets reached USD 1.3697 trillion, 21% of total assets; portfolio investment assets were USD 414.3 billion, 6% of total assets; financial derivative assets amounted to USD 6 billion, 0.1% of total assets; and other investment assets reached USD 1.7042 trillion, 26% of total assets. In terms of external liabilities, direct investment liabilities hit USD 2.9245 trillion, accounting for 60% of total liabilities, which remained the highest among external liabilities; portfolio investment liabilities reached USD 858.3 billion, 18% of the total liabilities; financial derivative liabilities were USD 4.9 billion, 0.1% of total liabilities; and other investment liabilities amounted to USD 1.1054 trillion, 23% of total liabilities. Overall, China still takes the top spot worldwide by reserve assets. Its outbound investments are made in an orderly manner and foreign investments rise stably, indicting its international investment position is robust. 2017-09-28/en/2017/0928/1324.html
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Q: The latest foreign exchange reserves data released by the People's Bank of China (PBC) show that China's foreign exchange reserves as at the end of August 2017 went up by USD 10.8 billion month on month. Could you brief us on the causes behind such changes in foreign exchange reserves? A: As at the end of August 2017, China's foreign exchange reserves amounted to USD 3.0915 trillion, up by USD 10.8 billion or 0.4% month on month, recovering 7th-straight month. In August, China's cross-border capital flows and the supply and demand of its foreign exchange continued to remain balanced. In global financial markets, asset prices rose, driving foreign exchange reserves to grow. Since the beginning of this year, China's economy has been stable and improved, with deeper structural adjustments and better-than-expected indicators, suggesting the macro-economy has become more stable. The global financial markets have been relatively stable. Cross-border capital flows have been stabilized with a good momentum for growth, the demand and supply of foreign exchange have found an equilibrium, and the RMB exchange rate has remained stable. Looking ahead, as the supply-side structural reform is advanced, and transformation, upgrades and growth engine shift are further accelerated, positive factors that support the middle and high-speed economic growth and boost the economy to strive toward a medium and high-end level will be strengthened, indicating China's momentum for stable and stronger economic growth will gain ground. Alongside the deeper reform of the financial system, and deepened financial liberalization, the foundation for the stabilization of China's cross-border capital flows will be solidified, which will provide a further boost to maintain a moderate and reasonable size of foreign exchange reserves. 2017-09-07/en/2017/0907/1322.html