Promoting High-Quality BRI Development with High-Standard Opening-Up

Author:Research Team of SAFE’s Capital Account Management Department

Since the launch of the BRI in 2013，the SAFE has been working tirelessly to streamline administration and delegate power to promote the facilitation of cross-border investment and financing，aiming to create a favorable environment for domestic institutions to leverage domestic and international resources and markets. At the same time，the SAFE remained steadfast in the principle of preventing cross-border capital flow risks，curbing irrational overseas investment behavior，and safeguarding against illegal and irregular capital outflows，to ensure that overseas direct investment (ODI) becomes a "clean" channel for promoting the Belt and Road Initiative (BRI) development.

Streamlining Administration and Delegating Power to Improve Cross-Border Investment Facilitation

To begin with，the SAFE has made significant strides in simplifying foreign exchange management for direct investment，thereby promoting investment facilitation along the BRI. In February 2015，the SAFE issued the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Policies for the Foreign Exchange Administration of Direct Investment (Huifa [2015] No. 13)，which delegated the authority of foreign exchange registration for outbound direct investment to banks. This means that，when investing overseas，including outbound investment in countries and regions along the BRI，domestic institutions can now approach banks directly to handle relevant business under direct investment，such as foreign exchange registration，account opening，payment and settlement.

Next，reform of the discretionary settlement of foreign exchange receipts under the capital account has facilitated the enterprise management and fund operation. In June 2016，the SAFE issued the Circular of the SAFE on the Policies for Reforming and Standardizing Management of Foreign Exchange Settlement under the Capital Account (Huifa [2016] No. 16). This enables businesses to freely settle foreign exchange while facilitating inbound equity investment and other direct investment from overseas enterprises，especially those from countries and regions along the BRI.

Furthermore，efforts have been made to support eligible and capable enterprises to actively and prudently engage in the development of BRI. To this end，the SAFE has actively implemented the Circular of the General Office of the State Council on Transmitting and Issuing the Guiding Opinions of the National Development and Reform Commission，the Ministry of Commerce，the People’s Bank of China and the Ministry of Foreign Affairs on Further Guiding and Regulating the Direction of Overseas Investment (Guobanfa [2017] No. 74). This Notice encourages outbound direct investment that advances the BRI and the interconnectivity of surrounding infrastructure.

Finally，the registration and management of certain items in the capital account has been simplified，and therefore the cancellation registration of 12 overseas  and domestic guarantee loans has been delegated to banks. In April 2020，the SAFE issued the Circular of the State Administration of Foreign Exchange on Optimizing Foreign Exchange Administration to Support Foreign-Related Businesses Growth (Huifa [2020] No. 8). This regulatory document simplifies the registration and management of certain capital account items. The cancellation of registration of eligible overseas loans under domestic guarantees and overseas loans has been delegated to banks instead of being handled by the SAFE to better serve enterprises from countries and regions along the BRI and f