Foreign Exchange Administration in the Digital Trade Era

Emerging as a catalyst for international trade，digital trade has introduced numerous novel forms and models with its dynamic growth and development. Nevertheless，in the realm of digital trade management，authenticating transactions and precisely determining their value pose significant challenges. This raises issues to the current foreign exchange regulatory framework. Therefore，expediting the transformation of foreign exchange regulatory verification methods，refining quantitative assessment techniques，establishing robust rules for data market elements，and strengthening cross-departmental communication and coordination are imperative. These measures will foster the ongoing enhancement of foreign exchange management in the context of digital trade.

Main Challenges in Foreign Exchange Administration for Digital Trade

The first challenge lies in determining the authenticity of transactions. The intangible nature of digital trade distinguishes it from traditional trade in terms of verification methods. The digital nature of services and goods in digital trade makes it difficult to establish the authenticity of transactions using the conventional framework of “funds，subject，physical goods and production conditions”. Additionally，it is essential to examine the legality of product elements. In cross-border trade disputes，verifying the authenticity of successful transactions is crucial for ensuring the smooth flow of goods and funds. However，audiovisual products and publications purchased overseas did not meet domestic requirements. Factors like meeting the requirements for cross-border product label translation and classification labeling requirements directly impact the legality of cross-border trade. Determining the legality of digital trade solely from the perspective of foreign exchange administration poses a formidable challenge.

The second challenge is determining the true value of traded commodities. Digital services and goods often involve a higher degree of information technology and added value. However，the absence of pricing benchmarks for trade elements such as intellectual property rights and artistic value in the domestic market complicates the process. This makes it challenging to determine the true value of digital trade contracts，resulting in easier illicit financial flows by non-compliant entities manipulating prices.

The third challenge is the absence of universally applicable rules for the digital factor market across various departments. In traditional foreign trade regulation，information such as commodity price data from the customs department，transaction declarations from the banking sector，and special industry licenses play a pivotal role in the regulatory functions of the relevant departments. However，concerning rules governing the access of digital trading entities and the pricing of trading elements，there is currently a lack of unified opinions among the relevant regulatory departments. This poses significant challenges for individual departments in defining transaction authenticity and determining the true value of transactions，leaving them vulnerable to regulatory blind spots.

The final challenge involves improving the adaptability and long-term effectiveness of regulations for digital trade in services. Digital trade in services accounts for a significant share of digital trade. However，the current foreign exchange administration of trade in services lacks a comprehensive "listing system" for enterprise classification，akin to that present in trade in goods. As a result，it becomes challenging to implement targeted management measures for entities that have issues but do