State Administration of Foreign Exchange: Strengthen the two-in-one management of "macro-prudential + micro-supervision" in the foreign exchange market

On November 1, Chen Zhiwei, editor-in-chief of the Foreign Exchange Research Center of the State Administration of Foreign Exchange, introduced the work done by the State Administration of Foreign Exchange in improving the facilitation of cross-border trade and investment and financing at the press conference of the 2023 Financial Street Forum Annual Meeting.

According to Chen Zhiwei, this year, the State Administration of Foreign Exchange has mainly promoted relevant work in three areas:

First, continue to promote cross-border trade and investment and financing facilitation reform, to benefit more business entities. First, high-quality enterprises trade foreign exchange revenue and expenditure facilitation policy to achieve national coverage, promote the formation of "the more honest the more convenient, the more compliance the more independent" policy orientation, the first three quarters of the new facilitation business scale of more than 730 billion US dollars, of which Beijing's new facilitation business scale of more than 900 billion yuan. Second, smooth new forms of foreign trade, new models of capital collection and payment, for cross-border e-commerce and other new trade formats of high-frequency, small, electronic settlement characteristics, allowing banks and payment institutions to take the transaction based on electronic information flexible review method. The third is to continue to promote cross-border investment facilitation, especially for enterprises with small net assets such as high-tech and "specialized and special new" enterprises, carry out cross-border financing facilitation pilots, and allow them to operate foreign exchange within the equivalent value of US $10 million or US $5 million according to their own circumstances. At present, the pilot area has been expanded to 17 provinces and cities, covering about 80% of the country, and 280,000 high-tech and "specialized and special new" enterprises.

Second, focus on small and medium-sized enterprises, and constantly optimize the quality and efficiency of foreign exchange management services. Chen Zhiwei said that first, service enterprises improve exchange rate risk management capabilities, compile exchange rate risk scenarios and foreign exchange derivatives application cases to help enterprises establish effective exchange rate risk management mechanisms. Second, promote the construction of cross-border financial service platforms. As of the end of October, the platform has launched 8 financing application scenarios and 3 foreign exchange policy facilitation scenarios. Nearly 100,000 foreign-related enterprises, mainly small and medium-sized enterprises, have received a cumulative amount of financing exceeding 290 billion US dollars, and the payment amount exceeds 1.20 trillion US dollars.

Third, actively serve regional opening up and innovation, and explore the reform of foreign exchange management to be tried first. Chen Zhiwei pointed out that in Shanghai, Guangdong and other four provinces and cities, high-level opening up pilots for cross-border trade and investment have been carried out. As of the end of September 2023, a total of 158,000 pilot businesses have occurred in various banks and enterprises, with a business scale of 140.60 billion US dollars. A number of national firsts and the first batch of reform and innovation pilot policies have been launched around the construction of Beijing's "two zones" to help the capital's high-level opening up and high-quality economic development. Among them, a number of foreign exchange pilots such as multinational companies' local and foreign currency integrated capital pools and qualified overseas limited partners' foreign exchange management pilots have been listed as "two zones" breakthrough policies and

Chen Zhiwei said that in the next step, SAFE will adhere to the path of financial development with Chinese characteristics, coordinate development and security, deepen reform in the field of foreign exchange in an orderly manner, steadily expand institutional opening up, and continue to promoteforeign exchange marketDevelopment, focus on improving the convenience of cross-border trade and investment and financing, strengthen the "macro-prudential + micro-supervision" of the foreign exchange market, prevent and resolve the risk of external shocks, and better serve the high-quality development of the real economy.