Facilitating Innovation to Improve the Quality and Efficiency of Foreign...
Title:Facilitating Innovation to Improve the Quality and Efficiency of Foreign Exchange Administration under the Current Account
China Forex: What is the overall direction of China's foreign exchange administration under the current account in 2024?
LIU Bin: In recent years, China's foreign trade structure has been continuously optimized, with new growth points constantly emerging. Foreign exchange administration under the current account always adheres to a people-centered development philosophy, and actively practices the concept of "benefiting enterprises and the people" when formulating administration policies and optimizing foreign exchange services. This helps ensure the genuine and compliant demand for foreign exchange by enterprises and individuals.
The year 2024 marks the 75th anniversary of the founding of the People's Republic of China and is a crucial year for achieving the goals and tasks of the 14th Five-Year Plan. Foreign exchange work under the current account will be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the guiding principles of the 20th CPC National Congress and the second plenary session of the 20th CPC Central Committee, and conscientiously implement the decisions and arrangements of the Central Economic Work Conference, the Central Financial Work Conference, and the National Foreign Exchange Administration Work Conference. We will uphold and strengthen the CPC's overarching leadership in financial work, and unswervingly follow the path of financial development with Chinese characteristics. We will continue to act on the principle of seeking progress while maintaining stability, promoting stability through progress, and establishing the new before abolishing the old. We will better coordinate high-quality development and high-level security, firmly grasp the two main themes of "benefiting people's livelihood" and "guarding against risks", and continue to deepen reforms in the foreign exchange sector under the current account as we focus on optimizing management and institutional innovation. We will take practical measures to serve people's livelihood, and support the high-quality development of the foreign-related economy with efficient, safe, and stable cross-border fund settlement.
China Forex: You have mentioned that foreign exchange administration under the current account should prioritize "bringing benefit to the people". What work has the State Administration of Foreign Exchange (SAFE) done to meet the needs of enterprises and the masses to facilitate the use of foreign exchange? In the new year, what are your thoughts on further promoting the reform of facilitating current account transactions?
LIU Bin: Towards the goal of serving the real economy and facilitating people's livelihood, in the past year, foreign exchange administration under the current account has adhered to China's new development philosophy and has promoted the building of a new pattern of opening-up through reform and innovation. We have continuously enriched the supply of facilitation policies, stimulating vitality and solving difficulties simultaneously, and continuously enhancing the sense of gain in facilitation for business entities.
Firstly, we have served the strategy of opening-up via effective reform and innovation. On the one hand, we steadily promoted the optimization and expansion of high-level opening-up trials. On the other hand, we strengthened the supply of facilitation policies for cross-border trade. Four policies were implemented to facilitate nationwide foreign exchange receipts and payments for trade, helping enterprises reduce costs, increase efficiency, and prevent risks in fund settlement by optimizing business processes and supporting the handling of special business. Secondly, we continued to optimize foreign exchange services to adapt to diversified and differentiated market demands. We facilitated individual foreign exchange transactions, and improved the level of electronic processing available for individual foreign exchange transactions. We supported banks in expanding their electronic channels to facilitate the handling of small-value cross-border remittances and settlements for current account transactions, and in response to the problem of small-value foreign currency withdrawals during peak travel seasons. We supervised banks to improve their services for non-reserved small-value cash withdrawals, in order to meet the needs of individuals demanding small-value foreign currency withdrawals. Another work was supporting several major events and international exhibitions. We supported the preparation work for important events and conferences such as the Asian Games, the FISU World University Games, the China International Fair for Trade in Services, and the China International Import Expo. Our strategy relied on the general structure, i.e. "large transactions via card, small transactions via mobile payment, and cash as a last resort". We collaboratively enlisted several banks and payment institutions to provide overseas individuals with the capability of linking their foreign cards to their accounts for secure and seamless payment processing. This has facilitated many overseas visitors to China to indulge in small-value consumption of clothing, food, accommodation, and transportation. During the Hangzhou Asian Games and the Chengdu 2021 FISU World University Games, a total of 16,000 foreign exchange transactions were processed using such special exchange facilitation measures, providing mobile payment services for 550,000 small-value visitor transactions.
A third measure was that we practiced the original intention of financial services for the people, and continuously improved levels of facilitation.
In 2024, foreign exchange administration under the current account will continue to deepen its reforms, and will aim to dynamically evaluate the expansion of high-level opening-up trials. We will accelerate the issuance of supporting documents, expand the coverage of facilitation policies, and support high-quality small and medium-sized enterprises (SMEs) such as those that use special and sophisticated technologies, and those involved in the Belt and Road Initiative. We will conduct structured assessments and risk monitoring of facilitation services, and promptly regulate entities and businesses that do not meet the requirements. At the same time, we will improve foreign exchange services for individuals coming to China and continuously enhance the convenience of mobile payment experiences. We will also work to improve foreign exchange service guarantees for overseas visitors to China, and constantly enhance the convenience and overall experience of mobile payments.
China Forex: In recent years, with the deepening of reform and innovation and the widespread application of digital technology, the scale and number of transactions of entities engaged in new forms of trade have grown massively. How is foreign exchange administration under the current account adapting to the requirements of high-quality development to support innovative and healthy development of new business forms and models?
LIU Bin: In recent years, the scale and number of transactions of entities engaged in cross-border e-commerce, market procurement, and other new forms of trade have experienced a continuous surge, and trade models have been constantly adapting and evolving. The SAFE is actively implementing the decisions and plans of the CPC Central Committee to support the development of new forms of trade, and as a rule takes the initiative to explore and improve management approaches and service systems for the development of new forms of trade, featuring "small-value, high-frequency and electronic", in accordance with the principle of "encouraging innovation and being inclusive yet prudent". In terms of promoting compliant and convenient new forms of trade, the SAFE has made the following efforts in foreign exchange administration under the current account.
Firstly, we have optimized cross-border e-commerce business settlement services. We have guided banks and payment institutions in fully leveraging their individual advantages, and on the premise of controllable risk, guided them in how to provide foreign exchange settlement and sales and related fund receipt and payment services, especially for entities engaged in cross-border e-commerce and other new forms of trade based on electronic tr