Reforms in Capital Account Management

China Forex: A number of reform measures were launched by SAFE in the regulation of cross-border investment and financing. Could you share with us the progress made in this area over the past year? What measures will be introduced in 2019?

Ye Haisheng: SAFE has been actively promoting the facilitation of cross-border investment and financing. It unveiled a number of measures in 2018. From last year，the registration of the interest of foreign direct investment (FDI) stock has been incorporated into the joint annual report on the Ministry of Commerce's information platform. Upfront payments from FDI are no longer capped at US$300,000. Furthermore，FDI-related foreign exchange management was improved in line with the foreign investment administration model of national treatment prior to market entry coupled with the use of what is known as "negative list" treatment where activities are permitted unless specifically restricted or banned.

In 2019 SAFE will keep pace with the overall market openings and improve the new foreign investment administration model. Additionally，trade and investment will be facilitated by improved regulation of reinvestment using profits from foreign direct investment and the Qualified Domestic Limited Partner program.

China Forex: SAFE introduced a number of facilitation measures in 2018 to support the development of special economic zones. What new measures can we expect in 2019?

Ye Haisheng: SAFE launched several pilot projects on capital account management last year. These projects ranged from removing document examinations in foreign exchange settlements and payments for companies with a good track record to allowing eligible non-bank enterprises to register foreign borrowings without prior regulatory approval. The former program was piloted in 16 provinces and cities，including Jiangsu，Guangdong，Sichuan，Shandong，Shaanxi，Fujian and Zhejiang as well as the cities of Xiamen and Shenzhen. The latter covered Fujian，Guangdong and the capital Beijing among others.

In 2019 we will expand these projects，with the aim of supporting the construction of foreign trade zones，the Guangdong-Hong Kong-Macao area，the Hainan Free Trade Port and the Xiongan New Area. The facilitation of settlements and payments under capital accounts by high-quality companies is prioritizing foreign trade zones. In addition，reform measures of foreign debt registration and cancellation will be expanded to more areas.

China Forex: What steps were taken in the effort to reform the regulation of various kinds of eligible institutional investors?

Ye Haisheng: Reform measures focused on the regulation of foreign institutional investment in China and outbound institutional investment.

For the qualified foreign institutional investor (QFII) and renminbi qualified foreign institutional investor (RQFII) programs，SAFE has removed or eased some restrictions. In 2018 it removed the rule that restrict qualified foreign investors to a monthly fund remittance limit of 20% of their total domestic assets at the end of the previous year. It also scrapped the lock up period for investment principal