November 26, 2007 -- Ms. Hu Xiaolian, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange (SAFE), recently conducted research and investigation in Guangdong province on the implementation of the guiding principles of the Seventeenth National Congress of the CPC, the enhancement and improvement of foreign exchange management, and the promotion of an equilibrium in the balance of payments. During her research and investigation, Hu and her colleagues held symposia with the Guangdong branch and some central sub-branches of the SAFE, and paid visits to locally designated foreign exchange banks and enterprises.
Guangdong province, with its developed export-oriented economy, ranks top in China in terms of its foreign trade and utilization of foreign capital; in particular, its foreign exchange business accounts for one-third of the state's total. Hu listened carefully to analyses on the current situation of foreign trade, foreign capital, and foreign exchange receipts and payments, with a focus on the administration of foreign exchange in trade, foreign capital and external debts, and overseas investment, the attack on underground money shops, and so on.
In order to facilitate the production and operation of foreign trade enterprises and to effectively monitor the foreign trade activities and the authenticity of foreign exchange receipts and payments, foreign exchange administrative departments have carried out systematized administration over the import and export enterprises. Guangdong branch has employed a "Dynamic Monitoring and Managing System for Foreign Exchange Inflows" in regions under its governance, and has greatly enhanced the efficiency of systematized administration. While inspecting the results of the application of this system, Hu expressed great affirmation and appreciation for the innovative work of the Guangdong and Shenzhen branches. She pointed out that the introduction of this system can enable real-time tracking of the match between foreign exchange receipts and payments of enterprises and their foreign trade activities, as well as enhance monitoring efficiency. On this basis, follow-up monitoring work should be strengthened to urge enterprises to handle foreign exchange receipts and payments in accordance with the laws and regulations and to correct problems in a timely manner. Furthermore, those enterprises experiencing a serious conflict between capital flows and the actual situation of import and export activities should be listed as "highlighted enterprises" for intensified pre-supervision.
In recent years, the foreign exchange administrative departments of Guangdong province, in close cooperation with the public security agencies, have reinforced efforts to crack down on underground money shops and illegal foreign exchange transactions, and have destroyed many such shops and dens. Hu specified that cases of underground money shops should be treated with different measures according to the specific situations, and both guidance and punishment should be adopted. Cooperation with the public security agencies should be continuously promoted to strongly fight against those conducting illegal activities such as gambling, smuggling, tax evasion, and money laundering through underground money shops. The quality and level of financial services should be earnestly improved to enhance the competitiveness of business procedure fees, timeliness, and so on. Further reforms should be advanced in order to keep pace with the times, to meet demands for the holding and utilization of foreign exchange by domestic institutions and residents, and to loosen controls on individual foreign investments in an orderly, controllable, and moderate manner. Publicity and education should be strengthened so as to enhance the law-abiding consciousness of domestic institutions and residents to handle foreign exchange business through formal financial institutions.
When visiting the designated foreign exchange banks and enterprises, Hu expressed appreciation for their cooperation with the foreign exchange administration. Meanwhile, she pointed out that supervision of China's current foreign exchange administration is mainly carried out through subrogation by designated foreign exchange banks, so the banks should, while offering high- quality services to customers, adhere to the relevant regulations on foreign exchange administration, balance appropriately among management, competition, and profits, and thus contribute to the economic and financial security of the state.
Hu emphasized that the foreign exchange administrative departments at all levels should study and carry out the guiding principles of the Seventeenth National Congress of the CPC, earnestly unify their thoughts with the spirit of the CPC Central Committee, consider the actual situation of foreign exchange administration, fully implement the scientific development concept, and promote an equilibrium in the balance of payments.