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E-mail China.org.cn, February 28, 2025
Economic Daily:
The 2025 National Foreign Exchange Administration Work Conference emphasized implementing more proactive and effective forex management policies. Mr. Li also addressed this in his opening remarks. What specific plans and measures are being considered for the next phase? Thank you.
Li Bin:
Thank you for the question. Let me address this. In 2025, the SAFE will better coordinate high-quality development with high-level security, building forex management systems that are "more convenient, more open and safer." While adhering to reform and opening up amid a complex environment, we will manage financial risks effectively, better support stable foreign trade and investment, and help sustain economic recovery. We will focus on the following four aspects.
First, we will introduce more forex facilitation measures. We will continue to promote policies facilitating trade foreign exchange receipts and payments for high-quality enterprises, focusing on expanding to regions and small and medium-sized banks that previously benefited less. This will help more high-quality small- and medium-sized enterprises enjoy the convenience of reduced paperwork and simplified procedures. Considering the characteristics of new trade formats such as e-commerce platforms and comprehensive foreign trade service enterprises, we will better support export proceeds collection, simplify forex payment procedures for logistics, warehousing and returns, and enhance the convenience of forex settlement. We will also respond actively to project contractors' needs, supporting their unified management and independent allocation of funds for cross-national and cross-regional projects, thereby improving fund management efficiency.
Second, we will promote forex management reform for foreign direct investment. At present, China's cross-border direct investment has achieved basic convertibility. We are studying the elimination of registration requirements for preliminary foreign direct investment expenses and domestic reinvestment. This will further enhance forex convenience for foreign direct investment funds and create a better environment for foreign enterprises operating in China.
Third, we will further promote opening up in the forex sector. We will optimize fund management for domestic enterprises seeking overseas listings and simplify forex registration for overseas IPOs. We will increase financing facilitation quotas for tech companies when appropriate, helping innovative enterprises reduce their financing costs. We will improve multinational companies' fund pool policies, facilitating fund allocation between domestic and overseas units, enhancing cross-border fund efficiency and reducing corporate financial costs. We will support the strategy of enhancing pilot free trade zones, facilitate forex management innovation in the Hainan Free Trade Port and the Guangdong-Hong Kong-Macao Greater Bay Area, and bolster the development of international financial centers in Shanghai and Hong Kong
Fourth, we will focus on strengthening regulatory capabilities and risk management while promoting opening up. On the one hand, we will improve the monitoring and early warning system for cross-border capital flows. Together with the PBC, we will strengthen counter-cyclical adjustments and expectations management in the forex market, firmly correct pro-cyclical behavior, decisively crack down on behaviors that disrupt market order, resolutely prevent exchange rate overshooting risks, maintain the RMB's basic stability at reasonable levels, and preserve balance-of-payments equilibrium. On the other hand, we will build a more refined and effective forex regulatory system, maintain strong enforcement against illegal foreign exchange activities, and preserve orderly forex market operations. Thank you.
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