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Outward portfolio investment quota of Huaan fund management company approved 2006-09-06/en/2006/0906/798.html
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QFII investment quota of AMP Capital Investors Limited approved 2006-08-10/en/2006/0810/797.html
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QFII investment quota of Goldman, Sachs & Co increased 2006-09-12/en/2006/0912/801.html
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January 5, 2007 - In order to implement the Measures for the Administration of Individual Foreign Exchange and to standardize and facilitate the operation of foreign exchange business by banks and individuals, the State Administration of Foreign Exchange (SAFE) recently formulated the Detailed Rules on Measures for the Administration of Individual Foreign Exchange (hereinafter referred to as the Detailed Rules). A SAFE spokesperson answered questions from reporters on issues of concern in various circles: Q: What ideas of the Administration Department have been embodied in the formulation of the Detailed Rules? A: When formulating the Detailed Rules, the following features have been mainly taken into account: first, to encourage foreign exchange held by the common people,to support the reasonable and lawful holding and use of foreign exchange by individuals, to realize balanced management, and to actively promote an equilibrium in the balance of payments; second, to maintain the principles of keeping pace with the times and management innovation so as to constantly adapt to the developments and changes in the market and to facilitate the operations of banks and individuals; third, to abide by the principle of due consideration to both public and private interests, to steadily strengthen and improve management of individual foreign exchange receipts and payments, and to perfect supervision of cross-border capital flows and transactions; fourth, to observe the principle of paying equal attention to being flexible and strict, to exercise effective supervision by relying on modern measures, and to implement practical policy and supervision adjustments. Q: It is stipulated in the recently promulgated Measures for the Administration of Individual Foreign Exchange that management of an annual quota shall be applicable to individual foreign exchange sales and domestic individual foreign exchange purchases, and it is specified in the Detailed Rules that the respective annual quota shall be USD 50,000. What are the main policy considerations behind this requirement? A: Management of an annual quota is an important aspect of the adjustment in the individual foreign exchange administration policy. The related formalities and vouchers for foreign exchange sales and purchases within the quota will be drastically simplified and facilitated, and examination of the authenticity of transactions exceeding the quota shall be strengthened. The Detailed Rules specify that the annual quota for individual foreign exchange purchases be drastically raised from USD 20,000 to USD 50,000, which can better serve the demands of domestic individuals for foreign exchange and the holding of foreign exchange by the common people. At the same time, the application of management of an annual quota on sales of foreign exchange for both domestic and foreign individuals changes the past administration mode of easy in and difficult out,and embodies the principle of balanced management of capital inflows and outflows. The annual quota of USD 50,000 for individual foreign exchange sales will basically satisfy the normal demands for individual foreign exchange sales and will contribute to controlling illegal capital inflows across the border through individual channels. To prevent acts of avoiding administration, such as repeated purchases of foreign exchange and foreign exchange sales in installments, and to ensure the effectiveness of the management of an annual quota, the SAFE has established a management information system connecting banks with the SAFE for individual sales and purchases of foreign exchange. Via this system, banks shall deal with the business of individual foreign exchange sales and purchases and verify the authenticity of the materials provided by individuals. In addition, this system provides a unified and standard operating platform for the banks to deal with such business, thus it is conducive to fair competition among banks, while individual foreign exchange sales and purchases will not be limited by regions or banks and the conduct of relevant business will become more convenient. Q: It is specified in the Detailed Rules that an individual engaging in foreign trade activities may open a foreign exchange settlement account. What additional conveniences will this policy bring to individual foreign trade? A: To embody the principle of giving full conveniences to business-based foreign exchange receipts and payments under the individual trade account, the Detailed Rules specify that individual trade businessmen and private businessmen may open foreign exchange settlement accounts, which shall be administrated as institutional accounts and may be used for foreign exchange sales and receipts and payments for imports and exports by direct trading or through agents. Unlike individual foreign exchange savings accounts and foreign exchange items under the capital account, the purchases and sales of foreign exchange under the foreign exchange settlement accounts are not subject to the limits of the annual quota, and the business shall be conducted with valid trading documents regardless of the amount. In addition, capital transfers for individual foreign exchange savings accounts shall only be conducted between accounts of the same nature held by the individual or his/her direct relatives, and any transfers of foreign exchange items under the capital account shall be subject to examination and verification. However, after opening a foreign exchange settlement account, private businessmen may carry out capital transfers with their entrusted agent enterprises which are not limited to the account openers. These regulations, while providing full support and conveniences to individual foreign trade, are beneficial to the statistics and monitoring of foreign exchange receipts and payments under individual trade and may promote the healthy and orderly development of individual trade activities. Q: While offering sufficient facilities to business-based foreign exchange activities under the current account, how is the concept of supervision reflected in the Detailed Rules for strengthening the authenticity of verification for non-business-based foreign exchange activities under the current account, such as individual donations and family maintenance remittances? A: Management of foreign exchange receipts and payments under individual current accounts according to their business-based and non-business-based nature is an important content of the adjustment in the individual foreign exchange administration policy at this time. The general principle in the administration of non-business-based foreign exchange receipts and payments under the individual current account is to exercise, on the basis of the convertibility of the items under the current account, management of an annual quota on purchases and sales of foreign exchange. Within the total annual quota, individuals can directly handle the formalities in the banks with their valid identity documents. There are specific requirements of authenticity and validity for foreign exchange receipts and payments beyond the quota for one-sided transfer items with concentrated foreign exchange inflows, such as individual donations, family maintenance remittances, and inheritances. Acceptance by individuals of overseas donations shall satisfy the relevant regulations of the State, and sales of foreign exchange shall be carried out only after notarized donation agreements or contracts are provided. Foreign exchange sales for family maintenance remittances can be carried out only after relevant certificates are provided, such as direct relative relationship certificates or notarized supporting relationship certificates, and relevant income certificates of the overseas payers such as bank deposit certificates and tax payment certificates for individual income. Foreign exchange sales for inheritances can be carried out only after presenting the relevant certificates such as legal documents or notarial deeds regarding the inheritance. Q: How do the Detailed Rules specifically regulate foreign exchange receipts and payments under the individual capital accounts? A: The following principles of administration on individual capital accounts are embodied in the Detailed Rules: first, in line with the overall requirement of the convertibility progress, the restrictions on foreign exchange transactions under individual capital accounts shall be lifted in an orderly, gradual, and in a controlled manner; second, an equilibrium in the balance of payments shall be promoted and individuals shall be supported to lawfully and reasonably participate in direct investments and investments in financial products such as securities, and current portfolio investments shall be dealt with through qualified domestic or foreign institutional investors; third, formalities shall be simplified, procedures standardized, transactions facilitated, and the transparency of supervision improved; fourth, transactions which have a substantial impact on the equilibrium in the balance of payments and the stability of the exchange rates shall be watched and the opening-up will be cautious to effectively guard against risks. Q: In the past, individual foreign exchange accounts were divided into note accounts and exchange accounts. It is now stipulated in the Detailed Rules that individuals may open foreign exchange savings accounts. Does this mean there will no longer be a distinction between note accounts and exchange accounts? A: This question can be understood in two ways. On the one hand, from the perspective of foreign exchange administration, individuals may open foreign exchange savings accounts in banks with valid identity documents for non-business-based individual foreign exchange receipts and payments, and there will not be any different foreign exchange administration policies for note accounts and exchange accounts, and unified supervision standards shall be applied for capital deposits, foreign exchange sales, outward remittances, domestic transfers, and cash withdrawals. On the other hand, from the perspective of bank operations, since the operational costs for foreign cash and spot exchange differ, the banks may differentiate depositors into cash depositors and exchange depositors, and adopt different charging standards or buying and selling rates for them; this pertains to the business operations of the banks themselves. Q: In various places in the Detailed Rules there are still many special supervisory requirements for the deposit, withdrawal, and remittance of foreign cash. What are the considerations behind these requirements? A: According to the related stipulations to oppose money laundering and the requirements to combat illegal foreign exchange transactions, the Detailed Rules further strengthen administration over the trading of foreign cash, which mainly includes: in cases where an individual deposits his/her foreign cash into his/her foreign exchange savings account, with a cumulative daily amount or equivalent exceeding USD 5,000, he/she shall handle it at a bank with relevant documents; in cases where an individual withdraws foreign cash with a cumulative daily amount or an equivalent exceeding USD 10,000, he/she shall file related documents in advance with the SAFE; in cases where an individual carries foreign cash abroad with a cumulative daily amount in excess of an amount equivalent to USD 10,000, he/she shall additionally provide relevant declaration forms signed and sealed by the customs or his/her bank forms for the withdrawal of the foreign cash from the original deposit bank. Because foreign currency pricing, settlement, and circulation are forbidden within the territory of the PRC, legitimate foreign cash resources and uses mainly include cross-border foreign exchange inward and outward remittances, domestic foreign currency transfers and withdrawals, as well as carrying foreign cash for persons entering and exiting the territory, which comply with the relevant provisions. From the perspective of international experience, the strengthening of administration of cash transactions is a principle commonly adopted by the supervision departments of the various countries, and it shall also be a key area of foreign exchange supervision in China . 2007-01-05/en/2007/0105/819.html
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January 21, 2007-The National Foreign Exchange Administration Conference was held in Beijing . Ms. Hu Xiaolian, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange, delivered a report on foreign exchange administration. Acting in the spirit of the Central Economic Work Conference and the National Financial Work Conference, Ms. Hu summarized the administration of foreign exchange in 2006, analyzed the current macro-economic and balance of payments situation, and arranged the work for 2007. The State Administration of Foreign Exchange (hereafter referred to as the SAFE) continued to follow the concept of scientific development as a guide to the overall economic situation, earnestly carried out the overall plan made by the Party Central Committee and the State Council, further deepened restructuring, improved administration, changed its way of thinking, and introduced new mechanisms. As a result, all work made progress in 2006. First, external financial investment and individual foreign exchange administration witnessed new breakthroughs. Vigorous support was provided to banks and securities and insurance institutions to invest in overseas financial markets. By the end of 2006, the SAFE had approved 15 commercial banks for quotas of foreign exchange purchases of as much as USD 13.4 billion for overseas wealth management on behalf of clients, 15 insurance companies for quotas of overseas investments of as much as USD 5.174 billion, and one fund management company for a quota in overseas investment of as much as USD 0.5 billion. The management of an annual quota for individual foreign exchange purchases was implemented in May 2006. The amount and number of transactions of exchange purchases by individuals increased by 2.2 and 2.6 times respectively year on year during May and December 2006. Policies on individual foreign exchange administration were modified at the end of the year to increase foreign exchange purchase limits and implement management of an annual quota. For the first time, permissible transactions under the capital accounts by individuals were specified and individual revenue and expenditures in foreign exchange were further facilitated and regulated. Second, trade and investment was made more convenient. The approval procedures for foreign exchange accounts opened for current account purposes were rescinded and the upper limit on these accounts were raised. Consequently, more and more enterprises opened accounts and the account balances increased by 32% year on year, satisfying demands for holding foreign exchange under the current accounts. Simplified vouchers and formalities facilitated the enterprises utilization of foreign exchange in the services trade. By lifting the limitations on foreign exchange purchases for overseas investment, enterprises were allowed to remit related early-phase expenses in advance and were encouraged to go global. The qualified foreign institutional investors (QFII) system was steadily improved. Forty-four institutions with a quota of USD 9.045 billion had been approved by the end of 2006. Third, the administration of foreign exchange inflows and sales was enhanced and improved trade-related foreign exchange collection and sales were subjected to enhanced management. Over 95% of the 170,000 enterprises registered with the national export verification and reporting system enjoyed greatly facilitated trade-related receipts and payments. The gap between trade and trade-related foreign exchange payments narrowed. The preliminary effects have already become apparent. The external debt and foreign exchange sales of foreign-funded real estate enterprises claimed enhanced administration and the principle of actual demands and self-use was applied to the purchase of domestic housing property with foreign capital. Fourth, vigorous efforts were made to cultivate and develop the foreign exchange market. The inquiry trading and market-maker system were introduced in the inter-bank foreign exchange market to enrich the trading types on the foreign exchange market and to improve general management over the sale and purchase of foreign exchange. At the end of 2006, there were 21 market makers in the inter-bank foreign exchange market, 77 financial institutions qualified for inter-bank forward transactions, and another 62 for swap transactions. The inter-bank business was obviously brisk, and transactions increased several-fold. Meanwhile, the electronic construction of foreign exchange administration was accelerated, and the operation and administration of foreign exchange reserves were continuously improved. Ms. Hu pointed out that we should objectively view the current disequilibrium in the balance of payments and accurately grasp its effects and trends. The balance of payments surplus indicates that our comprehensive national strength and global competitiveness are improving, promoting economic growth and employment, supporting the implementation of development strategies and reform in key fields, and maintaining financial stability. However, the continuous existence of a large surplus also complicates macro-control, imposes pressures for an appreciation of the RMB and increases trade frictions, thus impeding the transformation of economic growth patterns and the economic restructuring process. Therefore, an equilibrium in the balance of payments is critical to the reform and opening up as well as to rapid and sound economic development. Placing great emphasis on this issue, the Central Committee of the Party and the State Council proposed that we must treat the promotion of an equilibrium in the balance of payments as an important task for maintaining steady macro-economic development and have made important arrangements for achieving this goal. All levels of the SAFE must align their thinking with the spirit of the Central Government, fully recognize the significance of an equilibrium in the balance of payments to stabilize macro-economic development, and deeply understand the policies put forward by the Central Government regarding promoting an equilibrium in the balance of payments and thoroughly implement related policies and measures. Ms. Hu emphasized that 2007 is an important year for carrying out and implementing the concept of scientific development in an in-depth manner and for actively promoting the construction of a socialist harmonious society. This year, foreign exchange administration will follow Deng Xiaoping Theory and the important thought of the Three Represents as a guide, and will implement the overall concept of scientific development, earnestly carry out the strategic plans made by the Party Central Committee and the State Council since the 16th National Party Congress, closely follow the guidelines set out at the Central Economic Work Conference and the National Financial Work Conference, deepen the restructuring of the foreign exchange system, broaden capital outflow channels, vigorously develop the foreign exchange market, guard against the risk of foreign exchange reserves, tighten capital inflows and monitoring of sales, and promote an equilibrium in the balance of payments, thus promoting rapid and sound economic development and paving the way for the success of the 17th National Party Congress. The conference also made arrangements for foreign exchange administration in 2007. Ms. Hu emphasized that efforts should be concentrated on the following four tasks. First, the reform of foreign exchange administration will be deepened. It is planned that market-based development will be furthered and the reform of the foreign exchange management system will be pursued, loosening controls over foreign exchange holdings and use by enterprises and individuals will be continued in an orderly way, the development of the foreign exchange market will be accelerated, more favorable policies for the innovation of financial products will be introduced, products in the foreign exchange market will be enriched, the Renminbi exchange rate formation mechanism will be further improved, and the operation and administration of foreign exchange reserves will be strengthened, effectively guarding against risks and actively exploring and developing utilization channels and methods for the foreign exchange reserves. Second, foreign exchange outflows will be promoted. It is planned that the external investment channel will be further expanded, gradually loosening the limitations on the size and type of external financial investments by institutions and individuals and trying to make new progress in the increase of external financial investment. Meanwhile, it is planned that foreign exchange administration of direct investment abroad will be further improved, offering continual and vigorous support for competitive and powerful enterprises that sincerely wish to go global.Third, supervisory work will be reinforced. It is planned that effective monitoring of cross-border short-term capital flows, especially venture capital, will be strengthened. This year, efforts should be concentrated on improving the management methods over external debts, strictly controlling the overheated growth of foreign debts, continuing to implement and consolidate the three supervisory policies for trade-related foreign exchange collection and sales, individual foreign exchange and foreign capital access to the real estate market, and tightening the capital trade credit inflows and strictly monitoring abnormal capital inflows. Fourth, the methods of foreign exchange administration will be improved by adopting advanced technologies. Without effective measures, the administration will be just like a strawman and will have no effect. This year, efforts should be concentrated on keeping a close eye on abnormal cross-border fund flows and illegal foreign exchange transactions, further elevating the level of computerization, raising the efficiency of on-site and off-site inspections, and guaranteeing the actual effects of various policies. Ms. Hu stipulated that all cadres should strengthen the construction of their work style, improve their ability for administration of foreign exchange, carry out their work actively and innovatively according to the requirements of the new situations and tasks, and promote an equilibrium in the balance of payments with a down-to-earth approach. 2007-01-21/en/2007/0121/824.html
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May 18, 2007 - The SAFE recently held a symposium on the inspection of foreign exchange inflows and sales in Chongqing . During the symposium, the progress of the inspection work, which had been carried out in ten provinces and cities of China since early April of this year, was announced and summarized, and the relevant inspection work for next stage was arranged. Ms. Hu Xiaolian, deputy governor of the PBOC and administrator of the SAFE, was present and delivered a speech. The meeting was chaired by Mr. Deng Xianhong, deputy administrator of the SAFE. This activity constitutes a special inspection developed by the SAFE according to the situation of sustained foreign exchange inflows in recent years. Ten important coastal provinces and cities such as Guangdong were chosen to undergo this inspection, which covers foreign exchange collection and sales, as well as the use of RMB capital from foreign exchange sales of all FX-related entities from January 2006 to March 2007. The inspection focused on such behaviors as foreign exchange collection and sales under trade items of goods and services, capital inflows and foreign exchange sales of foreign-funded enterprises, inflows and foreign exchange sales of external debt and trade financing, capital inflows and foreign exchange sales under individual accounts, capital inflows and foreign exchange sales of round-tripping investments, and illegal capital inflows and foreign exchange sales through underground money shops. According to Ms. Hu, the ten provinces and cities undergoing the inspection are quite representative, as the amount of their foreign exchange collection and sales accounts for more than 60% of Chinas total amount. Therefore, the inspection in these key regions can provide a comprehensive picture of the capital inflows to China . So far, the SAFE branches that joined the inspection have attached great importance to this activity and have reached phased achievements through overall planning and thorough arrangements, as well as through concerted efforts. During the next stage, the branches will concentrate efforts on the following three tasks. First, the branches will consolidate the inspection achievements of the previous phase, carry out extended inspections of the revealed clues and issues, and seriously deal with the verified illegal foreign exchange activities while exposing the typical cases. Second, the branches will strengthen case analyses and in-depth investigations and research, and further adjust relevant policies and improve administrative approaches. Third, the branches will reinforce macro analysis, closely connect local conditions with the national situation, judge the overall situation of the balance of payments in a scientific manner, and further unify thoughts and improve the awareness and initiative to resolutely implement the macro-decision making of the Central Government. Ms. Hu emphasized that the Party Central Committee and the State Council have attached great importance to the situation of a sustained balance of payments surplus and clearly pointed out that the promotion of an equilibrium in the balance of payments must be treated as an important task for maintaining steady macro-economic development. Since this year, the trend in foreign exchange capital inflows has remained strong, and national foreign exchange reserves have been increasing continuously. Thus, the task of realizing an equilibrium in the balance of payments is still arduous. However, this task is the focus of foreign exchange administration and must be implemented in a down-to-earth manner. As one of the important approaches, foreign exchange inspections should be fully utilized. In addition, some other practices should be adopted. First, the SAFE shall further deepen the systemic reform of foreign exchange administration, facilitate trade and investment, steadily boost the convertibility of items under the capital account, and make a great effort to develop and improve the functions of the foreign exchange market. Second, the SAFE shall further adjust the foreign exchange management policy of easy in and difficult out and apply balanced management to capital inflows and outflows. The current focus is to reinforce management of capital inflows and foreign exchange sales. Third, the SAFE shall speed up the revision and promulgation of the Regulations on the Foreign Exchange System and improve the regulatory system for foreign exchange administration. Fourth, the SAFE shall establish a coordination mechanism for supervision and bring cooperative efforts into full play, realizing resource sharing and joint supervision. Fifth, the SAFE shall fully utilize modern science and technology as well as the available electronic system and data, thus strengthening the supervision and monitoring of foreign exchange receipts and payments. Sixth, the SAFE shall faithfully execute the laws, reinforce punishment, expose the various illegal cases, and enhance the dissemination of information on policies and regulations. 2007-05-18/en/2007/0518/840.html
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February 8, 2007 - The Ningbo branch of the State Administration of Foreign Exchange (SAFE), together with the local public security sectors, cracked several cases of illegal sales of export verification documents and destroyed three hideouts in December 2006. Eight suspects were captured on the spot, 279 seals (including company and financial seals) and 2,780 export verification forms were confiscated. The SAFE Ningbo Branch had noticed that since 2006 certain enterprises had frequently drawn a large amount of export verification documents. After four months of tracking and inspection, on December 1 the Branch, accompanied by the local public security sectors, ferreted out the gang, captured the chief suspect, and confiscated 238 company and financial seals and over 2,700 verification and declaration forms. On December 26, they raided another two enterprises, captured seven suspects, and seized 81 verification forms and 41 seals. Analysis shows that there are two reasons for the frequent occurrence of such crimes. On the one hand, enterprises or individuals who are not entitled to export and import need the forms for verification materials. On the other hand, some lawless persons, who disguisedly register as circulating foreign trade companies, draw more verification forms than necessary and sell them at higher prices. Meanwhile, many logistics companies even tout their business of selling verification forms. The SAFE will continue to cooperate with public security agencies to step up the campaign against reselling verification forms and further rectify economic order in the foreign exchange market. 2007-02-08/en/2007/0208/826.html
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Bank of China ( Hong Kong ) Limited's purchasing quota of foreign exchange for overseas investment services on behalf of its clients approved 2007-01-11/en/2007/0111/823.html
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Credit Suisse Shanghai Branch's purchasing quota of foreign exchange for overseas investment services on behalf of its clients approved. 2007-02-02/en/2007/0202/825.html
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QFII investment quota of UBS Global Asset Management ( Singapore ) Ltd approved 2007-01-11/en/2007/0111/822.html