Strengthen Facilitative Policies and Deepen Current Account Reform

China Forex: What is the overall strategy ofcurrent account management in 2021?

Liu Bin: The current account cross-border receipts and payments have long accounted for nearly 70% of the overall balance of payments in China,covering hundreds of millions of cross-border transactions and involving millions of market entities. It has played an essential role in resisting the impacts of cross-border capital flows,stabilizing the macro economy and people’s confidence in financial market,and improving social well-beings.

2021 is the first year of the “14th Five-Year Plan” period and also the year when the timeframes of the two centenary goals converge. Accordingly,thecurrent account management will also seek for reform and development in 2021 and in the “14th Five-Year Plan” period. Based on the new situation where the current account receipts and payments are basically balanced,the current accounts should be managed in a way that supports further high-quality development,like trade transformation and innovations,efficient allocation of factors and balanced internal and external macro economy and coordinates the relationships between promoting opening-up and preventing the impacts of current account imbalances. Specifically,we should seek to make steady progress,aim to promote safe,efficient and low-cost cross-border settlement of current account funds and high-quality development of trade,focus on the reform in current account authenticity and compliance management,take institutional innovations and scientific governance as the means,deepen the reforms to “streamline the government,delegate power,and improve government services” in the current account field,actively improve the foreign business environment,serve entities,facilitate people’s livelihood,further promote the coordinated development of domestic and external demands and imports and exports,and continuously stimulate the new vitalities of market players.

China Forex: What measures did the SAFE take in 2020 to regulate and optimize the processing of current account transactions? What will the SAFE do to further improve the effectiveness of policy transmission in 2021?

Liu Bin: 2020 was the year of institutional improvement for foreign exchange current account management. In this year,we issued six policies,respectively to ensure the needs of foreign exchange for epidemic prevention and control,support the re-opening of enterprises,facilitate trade innovations and development,streamline transaction handling procedures and materials,and enhance the autonomy of banks,and also revised the internal control system for current accounts. The Guidelines on Current Account Foreign Exchange Business (2020 Edition) (hereinafter referred to as the Guidelines) is the first integration of the current account foreign exchange system reforms,which has fully absorbed the results of previous reforms and innovations,system improvements and technological upgrades,and streamlined the regulations and reduced redundant clauses. With its issuance,29 regulations were abolished at the same time,and as a result,the foreign exchange policies for current accounts have become consistent,standardized,concise and transparent. What is more,the Guidelines is a further embodiment of the reforms “streamline the government,delegate power,and improve government services” – it has simplified and facilitated transaction handling,including optimizing the categorization of enterprises and directory management,streamlining non-essential processes and materials,removing the document sampling requirement,and increasing banks’ autonomy in authenticity review,so as to build a more scientific and flexible policy environment.

Effective policy transmission is a prerequisite for promoting the transformation of results and exerting the effects of policies. Taking the Guidelines as an opportunity,we strengthened policy promotion and training and supervised the effective implementation of facilitative policies through online and offline channels. At the SAFE level,we conducted training and presentations to all our branches,nearly 100 banks and more than 7,000 people across China,and at the same time collected more than 110 questions and suggestions from the branches,banks,and enterprises. We sorted out and classified these feedbacks and then issued five policy Q&A sessions to help them understand the Guidelines. Subsequently,our branches and sub-branches further promoted and popularized the Guidelines among banks,enterprises and citizens and answered their questions and address their requests about the policy one by one through various forms such as training seminars,field visits and investigation as well as news media. The Guidelines have received positive responses from the market entities since it took effect.

In 2021,we will further improve the effectiveness of policy transmission and implementation,continue the promotion,training and Q&A’s of the Guidelines and also the facilitative policies issued earlier,and track the follow-up implementation and effects of the policies. We will establish a full-chain supervision and performance assessment mechanism,urge branches to establish the transmission mechanism with banks,enterprises and local governments,etc.,assign the responsibilities for facilitative policy transmission,and collect feedbacks on market differentiation and complex businesses and give responses to ensure that the policies will be implemented in an accurate,timely and effective manner.

China Forex: A number of measures were taken in the current account management in the past year to support China’s major development strategies and opening-up,so what would be the main measures to take this year to serve this purpose?

Liu Bi