Improve Micro-Regulation of Foreign Exchange Market and Strengthen...

Title:Improve Micro-Regulation of Foreign Exchange Market and Strengthen the Barrier to Cross-Border Financial Security

HU Chunyu

Director-General of SAFE’s Supervision and Inspection Department

China Forex: Compared to 2022，what will the situation be like with regard to foreign exchange inspection work in 2023? What are the direction and key points of the corresponding work?

HU Chunyu: The Central Economic Work Conference pointed out that the current foundation for China’s economic recovery is not solid，and now China’s economy is still facing great pressure in terms of demand contraction，supply shock，and weakening expectations. Meanwhile，the turbulent international environment is also exerting a deeper influence on China’s economy. The foreign exchange inspection system will continue to prevent and mitigate major financial risks in the field of foreign exchange in 2023，while adhering to the guiding principle of ensuring stability and pursuing progress. It will focus on the major tasks as follows:

First，we will achieve qualitative improvement in strengthening capacity-building for off-site inspection and improve the ability to strike accurately in foreign exchange inspection. Taking into account the changes in the situation，we will carry out targeted special research to discover abnormal situations and clues promptly.

Second，we will maintain a high-pressure crackdown on illegal cross-border financial activities and strive to improve the effectiveness of our anti-illicit work. Notably，we will continue to vigorously combat illegal activities，such as underground banking，cross-border gambling，export tax fraud，illegal online foreign exchange speculation，etc. We will enhance cross-departmental coordination and explore cross-regional special actions，to promote comprehensive solutions to the root causes of illegal financial operations.

Third，we will conduct special inspections around key entities and strive to improve the compliance capabilities of foreign exchange trading institutions. We will continue to conduct inspections of banks’ foreign exchange operations to achieve the full coverage of bank types and “full coverage of foreign exchange services.

Fourth，we will make further efforts to exercise full and strict governance over the Party members. Meanwhile，we will further improve the administration in accordance with the law. More precisely，we will further our understanding of strict and complete governance over the Party by focusing on the “dual integration” of party building. Besides，we will strictly implement the internal control system for foreign exchange inspections and strictly carry out the arrangements for the recusal system.

China Forex: As you mentioned，in 2023，the foreign exchange inspection department will focus on promoting off-site capacity building and cracking down on illegal foreign exchange activities. What specific measures will be taken?

HU Chunyu: The foreign exchange inspection department will prioritize the development of off-site capabilities in 2023 and will concentrate on the following tasks:

In terms of off-site clues research and judgment，we will fully use the Data Research and Judgment Center of the SAFE to carry out concentrated analysis on key areas of illegal activities and abnormal ch