Mapping out High-Standard Two-Way Opening-Up to Enhance Risk Management in an Open Economy
CHINA FOREX: What specific measures did the Capital Account Management Department(hereinafter referred to as the Department) implement in 2025 to facilitate the high-standard opening-up of the capital account while better supporting the development of the real economy?
XIAO Sheng: The year 2025 marks the concluding year of the 14th Five-Year Plan period. The Department fully implemented the guiding principles of the 20th National Congress of the Communist Party of China (CPC), the plenary sessions of the 20th CPC Central Committee, as well as the Central Economic Work Conference and the Central Financial Work Conference. In accordance with the arrangements of the CPC Leadership Group of the State Administration of Foreign Exchange (SAFE), the Department better coordinated development and security, adhered to the principle of seeking progress while maintaining stability and promoting stability through progress, and solidly advanced robust regulation, risk prevention, and high-quality development under the capital account. These efforts have facilitated the coordinated progress of high-standard opening-up and high-level security. Key initiatives are outlined below.
The Department steadily promoted the high-standard opening-up of the capital account. Firstly, it further deepened the high-standard two-way opening-up of financial markets. The Qualified Domestic Institutional Investors (QDII) program was continuously improved, with quotas totaling US$3.08 billion granted to 82 QDII institutions. The institutional opening-up of the bond market was expanded. In collaboration with the People's Bank of China (PBOC), the Department introduced measures to support bond repurchase transactions by overseas investors to orderly meet their hedging needs for RMB-denominated bond investments. Additionally, we facilitated 42 overseas institutions to issue Panda bonds worth 361.6 billion yuan, representing a year-on-year increase of 87% in issuance volume. Together with the PBOC, the Department issued policies on fund management for domestic enterprises listing overseas, further enabling efficient financing for domestic enterprises in international financial markets. Secondly, the policies for the integrated domestic and foreign currency cash pool for multinational enterprises (MNEs) were further upgraded. The Department and the PBOC jointly released relevant policies, which to date have benefited more than 1,100 MNEs and 19,000 member enterprises, with cross-border receipts and payments totaling US$2.1 trillion. Thirdly, the Department actively supported major regional development strategies. It approved three cross-border investment and financing pilot policies for Xiong'an, aligning investment and financing facilitation policies between Beijing and Xiong'an. It launched four pilot programs across national pilot free trade zones,including bank-based foreign debt registration and the facilitated use of capital account settlement funds.
The Department actively improved the level of cross-border investment and financing facilitation. Firstly, it rolled out nine cross-border investment and financing facilitation policies, simplifying foreign exchange administration for foreign capital reinvestment, payments and settlements, and domestic property purchases by overseas individuals, to help stabilize markets, growth, and expectations. Secondly, it expanded and strengthened capital account services supporting the five key financial sectors. Green foreign debt pilots were launched in 16 provinces and municipalities including Shanghai, encouraging enterprises to use cross-border financing for green and low-carbon transition projects. By the end of 2025, the volume of corporate green foreign debt financing reached US$1.1 billion. The coverage of cross-border financing facilitation policies for tech-innovation enterprises was expanded, with the facilitation quota raised from US$5-10 million to US$10-20 million to support their development. Thirdly, the Department continued to ensure the effective implementation of facilitation policies. It streamlined procedures for banks to handle foreign debt registration to enhance the tangible benefits of facilitation policies. It further clarified review principles for outward investment remittances and cross-border direct lending by banks, better supporting domestic enterprises' orderly participation in the international industrial chain division and cooperation.
CHINA FOREX: What is the overall work approach of the Capital Account Management Department for 2026?
XIAO Sheng: The year 2026 marks the beginning of the 15th Five-Year Plan. The Department will adhere to the general principle of seeking progress while maintaining stability, with a focus on improving quality and efficiency. Greater efforts will be made to coordinate and advance the internationalization of the RMB and high-standard opening-up of the capital account. Centered on deepening reform and opening-up, supported by optimized services and strengthened regulation as two pillars, and driven by deep integration of Party building and core business, the Department will foster virtuous interaction between high-quality opening-up and high-level security. Efforts will focus on unlocking the synergies of existing and incremental policies, deepening foreign exchange administration reforms in direct investment, cross-border claims and liabilities, securities investment and other fields, and making systematic plans for high-standard two-way opening-up measures, so as to effectively enhance the quality and effectiveness of services for the real economy. The Department will improve the ongoing and ex-post regulation system for the capital account, strengthen the counter-cyclical adjustment mechanism under the capital account, and refine the regulatory framework in line with the opening-up of the capital account. This will help foster a new, higher-level open economic system and ensure a strong start to the 15th Five-Year Plan.