Innovating Foreign Exchange Management: A Proactive, Technology-Driven Approach

CHINA FOREX: In 2024, what initiatives did the Science and Technology Department of the State Administration of Foreign Exchange (SAFE) undertake to advance the reform and development of foreign exchange administration, while simultaneously fulfilling a dual role of supporting and leading technological innovation?

ZHANG Tiecheng: The year 2024 marks the 75th anniversary of the founding of the People's Republic of China and is a key year for achieving the goals and tasks outlined in the 14th Five-Year Plan. In the face of a complex international situation and the challenging tasks of domestic reform, development, and stability, the department, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, closely aligned its actions with the decisions and deployments of the Central Committee of the Communist Party of China (CPC), the State Council, and the SAFE CPC Leadership Group. It maintained a balance between development and security, and emphasized the work principles of upholding political guidance, serving the people through foreign exchange policies, and empowering through technology. It integrated Party building with the department business by enhancing the construction and application of cross-border financial service and digital foreign exchange administration platforms (ASOne). Firstly, our efforts focused on three scenarios: financing, facilitation, and exchange rate risk management services. We advanced the development of cross-border financial service platforms, enhanced application scenarios, and expanded the range of beneficiaries. In terms of financing, we introduced a new financing application scenario for port cloud warehouse and upgraded corporate cross-border credit information authorization and verification, bank-enterprise financing connections, and logistics financing and settlement of the New Western Land-Sea Corridor. In the facilitation scenario, we expanded the pilot program for domestic freight payment in foreign exchange to the Shaanxi region. Additionally, we launched a new corporate exchange rate risk management service, piloted in Beijing and 24 other provinces (municipalities). As of the end of 2024, we had launched a total of nine financing application scenarios and four facilitation application scenarios, assisting over 100,000 enterprises in securing financing exceeding US$380 billion and facilitating nearly US$2 trillion in corporate foreign exchange payments. These initiatives actively supported Belt and Road initiative and the construction of the New Western Land-Sea Corridor, addressing the financing needs of micro, small and medium-sized enterprises(MSMEs), and enhancing cross-border settlement facilitation, consistently injecting technological momentum into the development of foreign-related economic activities. Notably, the cross-border financial services platform was recognized as one of the first 50 exemplary cases in the nationwide Digital China initiative. Furthermore, we actively supported foreign exchange administration reform and continuously upgraded the ASOne platform to streamline online operations. For bank transactions processed through SAFE's business system, we provided online interface services, integrating foreign exchange administration processes into banks' internal workflows. This innovation simplified business handling for banks, improved the efficiency of foreign exchange transactions, and reinforced the sense of achievement for both banks and enterprises.

CHINA FOREX: In recent years, the SAFE has continuously expanded the application scenarios of cross-border financial service platforms, effectively addressing the financing challenges faced by MSMEs and achieving significant results in serving the real economy. Looking ahead to 2025, what innovative measures will SAFE implement to further enhance the construction of cross-border financial service platforms?

ZHANG Tiecheng: The cross-border financial service platform represents a strategic application of inclusive and digital finance principles. It is a key initiative by SAFE to implement the directives of the central government and the State Council on enhancing financial services for the real economy, with a focus on addressing three critical challenges: enterprise financing difficulties, bank risk management complexities, and regulatory hurdles for competent departments. In 2025, we will further enhance the platform's role in the following aspects to support the stable and sustainable development of foreign-related economies. Firstly, we will support Shanghai's positioning as an international financial center and the growth of businesses in pilot free trade zones, while advancing the construction of new offshore trade service scenarios. By integrating data on international cargo transportation, overseas port operations, and customs declarations, we will enable banks to verify the authenticity of shipping and maritime trade backgrounds, enhance their risk management capabilities in handling offshore trade, and support the development of offshore trade in the Shanghai Pilot Free Trade Zone and the broader Shanghai region. Secondly, we will facilitate the new service trade formats and explore innovative scenarios for service market procurement. By establishing connections between local market procurement platforms and financial institutions, we will consolidate data such as foreign exchange receipts and payments, and commodity details, providing reliable references for cross-verifying multi-source data. This will help banks streamline the review of transaction backgrounds and improve business processing efficiency for market procurement entities. Thirdly, we will actively support Chongqing in accelerating the construction of the New Western Land-Sea Corridor, and develop specialized scenarios. We will optimize scenarios of the New Western Land-Sea Corridor in Chongqing, the port-rail-sea integration at Beibu Gulf Port of Guangxi, and the China-Europe Chang'an Freight Train in Shaanxi, promoting the replication and sharing of dedicated applications across provinces and regions along the route. Fourthly, we will expand the scope of beneficiaries and continue optimizing existing application scenarios. This includes further expanding the types of insurance supported by export credit insurance policies, introducing new financing solutions for micro and small enterprises through credit insurance, and strengthening financing support for these ent