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In order to standardize the opening and use of domestic foreign exchange accounts by overseas institutions and other relevant operations, to prevent financial risks, and to further promote facilitation of trade and investment, the SAFE recently issued the Circular on Relevant Issues Concerning the Management of Domestic Foreign Exchange Accounts of Overseas Institutions (hereinafter referred to as the Circular). The Circular will take effect as of August 1, 2009. The content of the Circular mainly includes: First, the universal qualifications for banks to handle the relevant businesses are provided. The Circular specifies that all qualified Chinese-funded and foreign-funded banks within the territory of China can open domestic foreign exchange accounts and can provide financial services for overseas institutions according to the regulations. Second, the qualifications for the account opening, scope of use, and management principles for the domestic foreign exchange accounts of overseas institutions are clarified. Receipts and payments from/to domestic parties of the domestic foreign exchange accounts of overseas institutions are subject to cross-border transaction administration; unless otherwise specified, the balances in the domestic foreign exchange accounts of the overseas institutions shall be incorporated into the short-term external debt quota management. Third, statistical monitoring and risk prevention are strengthened. The Circular requires that banks utilize a uniform identification for the domestic foreign exchange accounts of overseas institutions, and incorporate these accounts into the foreign exchange account management information system for management purposes. When conducting relevant business related to the domestic foreign exchange accounts of overseas institutions, the domestic banks shall abide by the provisions of the anti-money laundering laws, the administrative regulations, and the departmental rules. During the course of drafting the Circular, the SAFE extensively solicited opinions from various sources, including from the general public via its official Web site. The relevant opinions and suggestions have been taken into full consideration. Implementation of the Circular will be conducive for banks to broaden the scope of their foreign exchange business, so as to give better play to the role of financing to bolster economic growth and to promote structural adjustments. It will also help increase the efficiency of fund use by both Chinese-funded and foreign-funded enterprises, guarantee fund security, and better promote facilitation of trade and investment. Furthermore, by standardizing management and strengthening risk prevention, the Circular is expected to effectively prevent abnormal inflows and outflows of foreign exchange funds via the domestic foreign exchange accounts of overseas institutions and to effectively safeguard national financial security. (End) 2009-07-13/en/2009/0713/894.html
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In order to further promote the facilitation of investment and trade and support the development of the real economy, the State Administration of Foreign Exchange (SAFE) recently released the Circular on adjusting the approval authority for certain foreign exchange businesses under the capital account (Huifa 2009No.21) in compliance with the economic work priorities of maintaining growth, expanding domestic demand, adjusting the economic structure, and attaching importance to the peoples livelihood as set out by the CPC Central Committee. According to the Circular, part of the approval authority for foreign exchange business under the capital account involving ten types of business will be delegated by the SAFE to its local branches, including inter-city opening of capital accounts, providing guarantees to foreign enterprises by domestic institutions, transfer of individual property abroad, and some cases of market exits under the securities account, etc. In compliance with the principle of clarifying authority and responsibility, making arrangements on a scientific basis, keeping risks under control, and facilitating the operations of the involved parties, the SAFE will formulate and perfect operational procedures and policy standards so as to enhance the post-supervision and inspection of issues related to the said approvals. The local branches can make relevant authorizations to the central sub-branches (sub-branches) under their jurisdiction according to the situations in the areas under their jurisdiction and in compliance with the relevant requirements of the internal control system. The decision to further delegate approval authority for foreign exchange business to the local branches is conducive to facilitating the business operations of enterprises, shortening the time needed for examination and approval, enhancing the efficiency of administration, as well as decreasing policy costs. The decision will also play a positive role in helping the foreign exchange authorities at all levels further clarify their work responsibilities and perfect their administration. (End) 2009-05-27/en/2009/0527/889.html
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In order to carry out the go-globaldevelopment strategy, further support the smooth and healthy development of overseas direct investment of domestic institutions, promote the facilitation of investment, take full advantage of markets and resources both at home and abroad, and promote the opening-up process of cross-border capital transactions in a steady and orderly manner, the SAFE recently issued the Regulations on Foreign Exchange Administration of Overseas Direct Investment of Domestic Institutions (hereinafter referred to as the Regulations), which will be implemented as of August 1, 2009. Based on the integration of the foreign exchange administration policies and measures for overseas direct investment issued during recent years, and in conjunction with the online operation of the foreign exchange management information system for direct investment of the SAFE, the Regulations streamline and standardize foreign exchange administration modes and procedures for overseas direct investment, mainly including: First, the examination and verification procedures have been streamlined. The examination and verification of foreign exchange fund sources for the overseas direct investment have been altered from ex ante examination to ex post registration, and the examination and approval of outward remittances of overseas direct investment funds have been cancelled. Second, the foreign exchange fund sources for overseas direct investment of domestic institutions have been expanded. Domestic institutions can make overseas direct investments by use of various sources of assets such as self-owned foreign exchange funds, domestic foreign exchange loans in line with the regulations, foreign exchange purchased with RMB or tangible assets, intangible assets, and profits retained overseas. Third, domestic institutions are allowed to remit outward the preceding expenses up to a certain proportion of the total amount of investment at the preparatory stage prior to the formal establishment of their overseas projects after obtaining approval from the SAFE. Fourth, a full aperture foreign exchange administration system for overseas direct investment has been established. The foreign exchange administration of overseas direct investment of domestic financial institutions has been clarified and standardized. Fifth, the statistical and monitoring mechanism for cross-border fund inflows and outflows under overseas direct investment has been improved and perfected. During the course of drafting the Regulations, the SAFE extensively solicited opinions from various sources, and sought opinions from the general public via its official Web site. Relevant opinions and suggestions have been taken into full consideration. The Regulations will help promote the standardization and systematization of foreign exchange administration of overseas direct investment, and are conducive for domestic institutions to timely grasp investment opportunities and increase the efficiency of overseas direct investment. In addition, the Regulations will play an active role in further perfecting the statistics and monitoring of overseas direct investment and promoting the basic equilibrium in the balance of payments. (End) 2009-07-15/en/2009/0715/896.html
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In order to carry out the six policy measures of the State Council for further stabilizing external demand, increasing the efficiency of fund use by domestic enterprises, and supporting the go global move of enterprises of diverse ownerships to stimulate exports, and based on the earnest efforts of drawing from previous experience in the trial reform for providing overseas lending, the SAFE recently issued the Circular on Related Issues Regarding Foreign Exchange Administration of Overseas Lending Granted by Domestic Enterprises (hereinafter referred to as the Circular). The Circular will take effect as of August 1, 2009. The content of the Circular mainly consists of the following: First, the scope of the lenders for overseas loans is expanded from the qualified Chinese and foreign-funded transnational companies currently in force to qualified enterprises of diverse ownerships. Second, the fund sources for overseas lending are expanded. Domestic enterprises are allowed to provide overseas lending through the use of diverse forms of fund sources within certain limitations, such as self-owned foreign exchange and foreign exchange purchased with the home currency. Third, the ratification and exchange procedures for overseas lending are streamlined. Matters concerning the opening of special foreign exchange accounts for overseas lending, fund transfers within China, and the purchase of foreign exchange etc. will all be directly handled by the designated foreign exchange banks. Fourth, the statistical monitoring and risk prevention mechanism for overseas lending has been improved. The administrative system for ratification of the qualifications and quota for overseas lending has been perfected, the valid term for overseas lending has been clarified, and a sound statistical monitoring mechanism for the inflows and outflows of foreign exchange funds for overseas lending has been established. Implementation of the Circular will facilitate efforts by domestic enterprises to take full advantage of two markets, two sources of funds, enhancing international economic and technological cooperation, and to ease enterprise financing difficulties in making direct overseas investments due to insufficient liquid funds, and will bolster the go-globalefforts of enterprises of diverse ownerships as a way to stimulate exports and further promote the development and expansion of enterprises making direct investments abroad. (End) 2009-06-09/en/2009/0609/891.html
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Several days ago, Premier Wen Jiabao of the State Council signed a State Council decree, promulgating the revised Regulations of the People's Republic of China on Foreign Exchange Administration, which came into force as of the date of promulgation. Officials in charge of the Legislative Affairs Office of the State Council, the People's Bank of China, and the State Administration of Foreign Exchange (SAFE) held an interview with reporters on relevant issues concerning the Regulations. Q: What is the main background to the revision to the Regulations? Answer: It is common practice in the world to timely adjust financial regulations in line with changing situations. The original Regulations of Peoples Republic of China on Foreign Exchange Administration played an important role in promoting an equilibrium in the balance of payments and preventing financial risks since their promulgation on January 29, 1996 and their revision on January 14, 1997. In recent years, with the rapid economic development of China and the profound changes in the international economic situation, the foreign exchange administration in China has confronted some new situations and problems, which the system must resolve. First, with the deepening of the reform of foreign exchange administration, full convertibility of the current account has been realized, foreign exchange income under the current account can be discretionarily retained by enterprises, the demand for personal foreign exchange is basically satisfied, the convertibility of the capital account is improving constantly, and the RMB exchange rate formation mechanism has been further perfected, so the Regulations need to be revised to consolidate the reform achievements and to allow room for further reform. Second, the situation in the balance of payments in China has changed fundamentally, from a foreign exchange shortage to excessive growth of foreign exchange reserves, but the original Regulations only focus on administration of foreign exchange outflows, so the Regulations needed to be revised for the balanced and standard administration of both capital inflows and outflows of foreign exchange. Third, as Chinas economy has become increasingly globalized and international capital flows have accelerated, the monitoring system for cross-border capital flows needed to be further perfected and a sound balance of payments emergency response and guarantee system needed to be established to effectively prevent risks and to improve the open economy. The revised draft of the Regulations of Peoples Republic of China on Foreign Exchange Administration, jointly drafted by the Peoples Bank of China and the SAFE on the basis of in-depth studies and seeking broad views and opinions, was submitted to the State Council for review. After soliciting opinions of the relevant departments of the State Council, various banks, and enterprises, the Legislative Affairs Office of the State Council, together with the Peoples Bank of China , the SAFE, and other departments, conducted repeated studies and modifications of the revised draft, and then submitted the final draft to the executive meeting of the State Council for review. The final Regulations were announced in a decree of the Decree of the State Council with the approval of the executive meeting of the State Council. Q: What principles were followed in revising the Regulations? A: First, adhering to the policy of reform and opening up, we drew on the reform achievements with respect to the current account, capital account, foreign exchange market, and RMB exchange rate formation mechanism in recent years, and reserved policy space for further reform. Second, centering on macro control and focusing on promoting an equilibrium in the balance of payments, we carried out balanced and standard administration of the capital inflows and outflows of foreign exchange. Third, we focused on creating a fair competitive environment to abolish the differential treatment between domestic enterprises and foreign enterprises, state-owned enterprises and private enterprises, institutions and individuals, and to exercise supervision according to the nature of the transaction. Fourth, in line with the requirements of the administrative system reform and the legal administration, we further perfected the regulations regarding the content and modes of foreign exchange administration, promoted trade and investment facilitation, and strengthened supervision and limits over administrative power. Q: Compared with the original Regulations, what contents have been revised in the new Regulations? A: The new Regulations, composed of 54 articles, represent a comprehensive revision of the original Regulations. They further facilitate trade and investment activities, improve the RMB exchange rate formation mechanism and the foreign exchange control system of financial institutions, establish a balance of payments emergency response and guarantee system, strengthen the monitoring of cross-border capital flows, perfect foreign exchange supervisory means and measures, and correspondingly clarify relevant legal liabilities. First, they pursue balanced administration of capital inflows and outflows of foreign exchange. They require that foreign exchange income and expenditure under the current account be made on the basis of authentic and lawful trade; they abolish the requirement for compulsory repatriation of foreign exchange income; and they allow foreign exchange income to be transferred back to China or deposited overseas in line with the prescribed conditions and terms; they standardize administration of the settlement of foreign exchange income under the capital account, and require that the foreign exchange and funds from sales of foreign exchange under the capital account be used for purposes approved by the relevant authorities, and impose penalties on illegal activities, such as illegal inflows of foreign exchange, illegal sales of foreign exchange, violations of the administration of the flow of funds from sales of foreign exchange; and they clarify the authority of the foreign exchange administrative organs in supervising and inspecting capital inflows and outflows, and specify administrative powers and procedures. Second, they improve the RMB exchange rate formation mechanism and the foreign exchange administration of financial institutions. They stipulate that the RMB exchange rate be subject to a floating exchange rate regime based on market supply and demand, and require the financial institutions operating foreign exchange sale and purchase business and other institutions satisfying the requirements to conduct foreign exchange transactions in the inter-bank foreign exchange market be in line with the stipulations of the foreign exchange administrative departments of the State Council; they regulate the administrative modes of the foreign exchange position, and carry out comprehensive position management of the foreign exchange business of financial institutions. Third, they strengthen the monitoring of cross-border capital flows and establish a balance of payment emergency response and guarantee system. They perfect the balance of payment statistics and reporting system, improve the collection of foreign exchange income and expenditure data, and strengthen statistics, analysis, and monitoring of cross-border capital flows; in accordance with WTO rules, they stipulate that the state may take necessary protection and control measures over the balance of payments when the balance of payments becomes or may become seriously unbalanced, or when the national economy confronts or may confront a serious crisis. Fourth, they perfect the foreign exchange supervisory means and measures. In order to guarantee the legal and effective fulfillment of the duties of the foreign exchange administrative organs, they stipulate the supervisory means and measures of the foreign exchange administrative organs and prescribe the supervisory and inspection procedures for the foreign exchange administrative organs. Q: How is the administration of foreign exchange under the current account prescribed in the Regulations? A: Chapter 5 and Article 2 in the general provisions of the Regulations contain the main stipulations for the administration of foreign exchange under the current account. Compared with the original Regulations, the new Regulations greatly simplify the content and procedures for the administration of foreign exchange income and expenditure under the current account. The Regulations stipulate that international payments of foreign exchange or the transfer of foreign exchange under the current account are not subject to any state control or restrictions, thus further facilitating foreign exchange income and expenditure under the current account; they require that the compulsory settlement of foreign exchange income under the current account be abolished, and foreign exchange income under the current account may be reserved or sold to financial institutions in accordance with the regulations; they stipulate that the foreign exchange expenditure under the current account be paid by an institution with its own foreign exchange or with foreign exchange purchased from financial institutions based on valid documents in accordance with the administrative provisions for the payment and purchase of foreign exchange. In order to guarantee that the foreign exchange income and expenditure under the current account be made on the basis of authentic and lawful trade, the Regulations require that the financial institutions that operate foreign exchange businesses conduct reasonable examinations of the authenticity of the transaction documents and of the consistency between the transaction documents and the foreign exchange income and expenditure; at the same time, they stipulate that the foreign exchange administrative organs have the right to supervise and inspect these issues through verifications and cancellations, write-offs, off-site data checking, on-site checking, etc. Q: How is the administration of foreign exchange under the capital account standardized in the new Regulations? A: The stipulations on the administration of foreign exchange under the capital account are mainly described in Chapter 3 of the Regulations, which are among the key content of the revisions to the Regulations. First, they reserve policy space for widening capital outflow channels. They simplify the administrative examination and approval process for foreign exchange administration of direct investments overseas, establish the administrative principles for transactions, such as overseas institutions raising funds within the territory of China, domestic institutions engaging in overseas securities investment and derivative products transactions, and domestic institutions providing commercial loans to overseas parties. Second, they reform the modes of the administration of foreign exchange under the capital account. Reserves and settlement of foreign exchange income under the capital account, shall require the approval of the foreign exchange administrative organs; with respect to the foreign exchange expenditure under the capital account, if the state provisions do not require it to be subject to the approval of the foreign exchange administrative organs in advance, in principle it can be directly handled at the financial institutions based on valid documents; and if the state provisions require that it be subject to the approval of the foreign exchange administrative organs, the approval procedures shall be handled prior to the payment of foreign exchange, unless it is otherwise provided by state provision. Third, they strengthen administration of the usage of capital inflows. They require that the foreign exchange and RMB funds from sales of foreign exchange under the capital account be used for purposes approved only by the relevant departments and the foreign exchange administrative organs, and they authorize the foreign exchange administrative organs to supervise and inspect the use of foreign exchange and RMB funds from sales of foreign exchange under the capital account and the changes in foreign exchange accounts. Q: What stipulations are there in the Regulations to perfect cross-border capital flows? A: Perfecting the monitoring of cross-border capital flows has important significance to grasp the situation in the income and expenditure of foreign exchange and to prevent international financial risks. On the one hand the Regulations clearly require in the general provisions that the foreign exchange administration department of the State Council collect statistical data and monitor the balance of international payments, and publish the balance of payments on a regular basis; on the other hand, they require the financial institutions handle the foreign exchange business through foreign exchange accounts and send the foreign exchange income and expenditure and the changes in the accounts of their clients to the foreign exchange administration organs according to the law. Domestic institutions that engage in foreign exchange operations shall submit financial accounting reports, statistical reports, and other data to the foreign exchange administration department of the State Council according to the relevant previsions. Based on these provisions of the Regulations, the foreign exchange administration organs can comprehensively monitor cross-border capital flows. At the same time, a supervisory information reporting system of the foreign exchange administration departments, relevant departments of the State Council, and the institutions is established. Q: How are the foreign exchange inspection means and legal responsibilities perfected in the Regulations? A: In order to carry out administration according to the law, guarantee effective implementation of the foreign exchange administration policies, and realistically prevent international financial risks, the Regulations clearly detail the inspection means and measures of the foreign exchange administration organs. According to the Regulations, when foreign exchange administration organs legally perform their duties, they have authority to take the following measures: to conduct on-site inspections, to enter places where illegal acts of foreign exchange are suspected to have occurred for investigation and collection of evidence, to make inquiries of the parties related to cases under investigation, to consult and photocopy relevant transaction documents and financial accounting data, to seal any documents and data that may have been transferred, concealed, or damaged, to inspect the accounts of an institution or an individual related to a case under investigation for illegal foreign exchange activities (excluding individual savings deposit accounts), to file an application with the peoples court to freeze or seal any property or important evidence involved, etc. However, the foreign exchange administration organs must carry out the relevant inspections in line with the procedures prescribed in the Regulations so as to safeguard the legal rights of the parties concerned. Meanwhile, in order to adapt to the demand to crack down on illegal foreign exchange activities under the new situation, the Regulations newly establish penalty provisions for illegal activities, such as for the illegal inflow of capital, illegal foreign exchange sales, violation of the administration of the flow of settlement funds, the illegal carrying of foreign exchange in or out of China, and the illegal introduction, purchase, and sale of foreign exchange, etc. Several days ago, Premier Wen Jiabao of the State Council signed a State Council decree, promulgating the revised Regulations of the Peoples Republic of China on Foreign Exchange Administration, which came into force as of the date of promulgation. Officials in charge of the Legislative Affairs Office of the State Council, the Peoples Bank of China , and the State Administration of Foreign Exchange (SAFE) held an interview with reporters on relevant issues concerning the Regulations. Q: What is the main background to the revision to the Regulations? Answer: It is common practice in the world to timely adjust financial regulations in line with changing situations. The original Regulations of Peoples Republic of China on Foreign Exchange Administration played an important role in promoting an equilibrium in the balance of payments and preventing financial risks since their promulgation on January 29, 1996 and their revision on January 14, 1997. In recent years, with the rapid economic development of China and the profound changes in the international economic situation, the foreign exchange administration in China has confronted some new situations and problems, which the system must resolve. First, with the deepening of the reform of foreign exchange administration, full convertibility of the current account has been realized, foreign exchange income under the current account can be discretionarily retained by enterprises, the demand for personal foreign exchange is basically satisfied, the convertibility of the capital account is improving constantly, and the RMB exchange rate formation mechanism has been further perfected, so the Regulations need to be revised to consolidate the reform achievements and to allow room for further reform. Second, the situation in the balance of payments in China has changed fundamentally, from a foreign exchange shortage to excessive growth of foreign exchange reserves, but the original Regulations only focus on administration of foreign exchange outflows, so the Regulations needed to be revised for the balanced and standard administration of both capital inflows and outflows of foreign exchange. Third, as Chinas economy has become increasingly globalized and international capital flows have accelerated, the monitoring system for cross-border capital flows needed to be further perfected and a sound balance of payments emergency response and guarantee system needed to be established to effectively prevent risks and to improve the open economy. The revised draft of the Regulations of Peoples Republic of China on Foreign Exchange Administration, jointly drafted by the Peoples Bank of China and the SAFE on the basis of in-depth studies and seeking broad views and opinions, was submitted to the State Council for review. After soliciting opinions of the relevant departments of the State Council, various banks, and enterprises, the Legislative Affairs Office of the State Council, together with the Peoples Bank of China , the SAFE, and other departments, conducted repeated studies and modifications of the revised draft, and then submitted the final draft to the executive meeting of the State Council for review. The final Regulations were announced in a decree of the Decree of the State Council with the approval of the executive meeting of the State Council. Q: What principles were followed in revising the Regulations? A: First, adhering to the policy of reform and opening up, we drew on the reform achievements with respect to the current account, capital account, foreign exchange market, and RMB exchange rate formation mechanism in recent years, and reserved policy space for further reform. Second, centering on macro control and focusing on promoting an equilibrium in the balance of payments, we carried out balanced and standard administration of the capital inflows and outflows of foreign exchange. Third, we focused on creating a fair competitive environment to abolish the differential treatment between domestic enterprises and foreign enterprises, state-owned enterprises and private enterprises, institutions and individuals, and to exercise supervision according to the nature of the transaction. Fourth, in line with the requirements of the administrative system reform and the legal administration, we further perfected the regulations regarding the content and modes of foreign exchange administration, promoted trade and investment facilitation, and strengthened supervision and limits over administrative power. Q: Compared with the original Regulations, what contents have been revised in the new Regulations? A: The new Regulations, composed of 54 articles, represent a comprehensive revision of the original Regulations. They further facilitate trade and investment activities, improve the RMB exchange rate formation mechanism and the foreign exchange control system of financial institutions, establish a balance of payments emergency response and guarantee system, strengthen the monitoring of cross-border capital flows, perfect foreign exchange supervisory means and measures, and correspondingly clarify relevant legal liabilities. First, they pursue balanced administration of capital inflows and outflows of foreign exchange. They require that foreign exchange income and expenditure under the current account be made on the basis of authentic and lawful trade; they abolish the requirement for compulsory repatriation of foreign exchange income; and they allow foreign exchange income to be transferred back to China or deposited overseas in line with the prescribed conditions and terms; they standardize administration of the settlement of foreign exchange income under the capital account, and require that the foreign exchange and funds from sales of foreign exchange under the capital account be used for purposes approved by the relevant authorities, and impose penalties on illegal activities, such as illegal inflows of foreign exchange, illegal sales of foreign exchange, violations of the administration of the flow of funds from sales of foreign exchange; and they clarify the authority of the foreign exchange administrative organs in supervising and inspecting capital inflows and outflows, and specify administrative powers and procedures. Second, they improve the RMB exchange rate formation mechanism and the foreign exchange administration of financial institutions. They stipulate that the RMB exchange rate be subject to a floating exchange rate regime based on market supply and demand, and require the financial institutions operating foreign exchange sale and purchase business and other institutions satisfying the requirements to conduct foreign exchange transactions in the inter-bank foreign exchange market be in line with the stipulations of the foreign exchange administrative departments of the State Council; they regulate the administrative modes of the foreign exchange position, and carry out comprehensive position management of the foreign exchange business of financial institutions. Third, they strengthen the monitoring of cross-border capital flows and establish a balance of payment emergency response and guarantee system. They perfect the balance of payment statistics and reporting system, improve the collection of foreign exchange income and expenditure data, and strengthen statistics, analysis, and monitoring of cross-border capital flows; in accordance with WTO rules, they stipulate that the state may take necessary protection and control measures over the balance of payments when the balance of payments becomes or may become seriously unbalanced, or when the national economy confronts or may confront a serious crisis. Fourth, they perfect the foreign exchange supervisory means and measures. In order to guarantee the legal and effective fulfillment of the duties of the foreign exchange administrative organs, they stipulate the supervisory means and measures of the foreign exchange administrative organs and prescribe the supervisory and inspection procedures for the foreign exchange administrative organs. Q: How is the administration of foreign exchange under the current account prescribed in the Regulations? A: Chapter 5 and Article 2 in the general provisions of the Regulations contain the main stipulations for the administration of foreign exchange under the current account. Compared with the original Regulations, the new Regulations greatly simplify the content and procedures for the administration of foreign exchange income and expenditure under the current account. The Regulations stipulate that international payments of foreign exchange or the transfer of foreign exchange under the current account are not subject to any state control or restrictions, thus further facilitating foreign exchange income and expenditure under the current account; they require that the compulsory settlement of foreign exchange income under the current account be abolished, and foreign exchange income under the current account may be reserved or sold to financial institutions in accordance with the regulations; they stipulate that the foreign exchange expenditure under the current account be paid by an institution with its own foreign exchange or with foreign exchange purchased from financial institutions based on valid documents in accordance with the administrative provisions for the payment and purchase of foreign exchange. In order to guarantee that the foreign exchange income and expenditure under the current account be made on the basis of authentic and lawful trade, the Regulations require that the financial institutions that operate foreign exchange businesses conduct reasonable examinations of the authenticity of the transaction documents and of the consistency between the transaction documents and the foreign exchange income and expenditure; at the same time, they stipulate that the foreign exchange administrative organs have the right to supervise and inspect these issues through verifications and cancellations, write-offs, off-site data checking, on-site checking, etc. Q: How is the administration of foreign exchange under the capital account standardized in the new Regulations? A: The stipulations on the administration of foreign exchange under the capital account are mainly described in Chapter 3 of the Regulations, which are among the key content of the revisions to the Regulations. First, they reserve policy space for widening capital outflow channels. They simplify the administrative examination and approval process for foreign exchange administration of direct investments overseas, establish the administrative principles for transactions, such as overseas institutions raising funds within the territory of China, domestic institutions engaging in overseas securities investment and derivative products transactions, and domestic institutions providing commercial loans to overseas parties. Second, they reform the modes of the administration of foreign exchange under the capital account. Reserves and settlement of foreign exchange income under the capital account, shall require the approval of the foreign exchange administrative organs; with respect to the foreign exchange expenditure under the capital account, if the state provisions do not require it to be subject to the approval of the foreign exchange administrative organs in advance, in principle it can be directly handled at the financial institutions based on valid documents; and if the state provisions require that it be subject to the approval of the foreign exchange administrative organs, the approval procedures shall be handled prior to the payment of foreign exchange, unless it is otherwise provided by state provision. Third, they strengthen administration of the usage of capital inflows. They require that the foreign exchange and RMB funds from sales of foreign exchange under the capital account be used for purposes approved only by the relevant departments and the foreign exchange administrative organs, and they authorize the foreign exchange administrative organs to supervise and inspect the use of foreign exchange and RMB funds from sales of foreign exchange under the capital account and the changes in foreign exchange accounts. Q: What stipulations are there in the Regulations to perfect cross-border capital flows? A: Perfecting the monitoring of cross-border capital flows has important significance to grasp the situation in the income and expenditure of foreign exchange and to prevent international financial risks. On the one hand the Regulations clearly require in the general provisions that the foreign exchange administration department of the State Council collect statistical data and monitor the balance of international payments, and publish the balance of payments on a regular basis; on the other hand, they require the financial institutions handle the foreign exchange business through foreign exchange accounts and send the foreign exchange income and expenditure and the changes in the accounts of their clients to the foreign exchange administration organs according to the law. Domestic institutions that engage in foreign exchange operations shall submit financial accounting reports, statistical reports, and other data to the foreign exchange administration department of the State Council according to the relevant previsions. Based on these provisions of the Regulations, the foreign exchange administration organs can comprehensively monitor cross-border capital flows. At the same time, a supervisory information reporting system of the foreign exchange administration departments, relevant departments of the State Council, and the institutions is established. Q: How are the foreign exchange inspection means and legal responsibilities perfected in the Regulations? A: In order to carry out administration according to the law, guarantee effective implementation of the foreign exchange administration policies, and realistically prevent international financial risks, the Regulations clearly detail the inspection means and measures of the foreign exchange administration organs. According to the Regulations, when foreign exchange administration organs legally perform their duties, they have authority to take the following measures: to conduct on-site inspections, to enter places where illegal acts of foreign exchange are suspected to have occurred for investigation and collection of evidence, to make inquiries of the parties related to cases under investigation, to consult and photocopy relevant transaction documents and financial accounting data, to seal any documents and data that may have been transferred, concealed, or damaged, to inspect the accounts of an institution or an individual related to a case under investigation for illegal foreign exchange activities (excluding individual savings deposit accounts), to file an application with the peoples court to freeze or seal any property or important evidence involved, etc. However, the foreign exchange administration organs must carry out the relevant inspections in line with the procedures prescribed in the Regulations so as to safeguard the legal rights of the parties concerned. Meanwhile, in order to adapt to the demand to crack down on illegal foreign exchange activities under the new situation, the Regulations newly establish penalty provisions for illegal activities, such as for the illegal inflow of capital, illegal foreign exchange sales, violation of the administration of the flow of settlement funds, the illegal carrying of foreign exchange in or out of China, and the illegal introduction, purchase, and sale of foreign exchange, etc. 2008-08-05/en/2008/0805/874.html
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January 21, 2007-The National Foreign Exchange Administration Conference was held in Beijing . Ms. Hu Xiaolian, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange, delivered a report on foreign exchange administration. Acting in the spirit of the Central Economic Work Conference and the National Financial Work Conference, Ms. Hu summarized the administration of foreign exchange in 2006, analyzed the current macro-economic and balance of payments situation, and arranged the work for 2007. The State Administration of Foreign Exchange (hereafter referred to as the SAFE) continued to follow the concept of scientific development as a guide to the overall economic situation, earnestly carried out the overall plan made by the Party Central Committee and the State Council, further deepened restructuring, improved administration, changed its way of thinking, and introduced new mechanisms. As a result, all work made progress in 2006. First, external financial investment and individual foreign exchange administration witnessed new breakthroughs. Vigorous support was provided to banks and securities and insurance institutions to invest in overseas financial markets. By the end of 2006, the SAFE had approved 15 commercial banks for quotas of foreign exchange purchases of as much as USD 13.4 billion for overseas wealth management on behalf of clients, 15 insurance companies for quotas of overseas investments of as much as USD 5.174 billion, and one fund management company for a quota in overseas investment of as much as USD 0.5 billion. The management of an annual quota for individual foreign exchange purchases was implemented in May 2006. The amount and number of transactions of exchange purchases by individuals increased by 2.2 and 2.6 times respectively year on year during May and December 2006. Policies on individual foreign exchange administration were modified at the end of the year to increase foreign exchange purchase limits and implement management of an annual quota. For the first time, permissible transactions under the capital accounts by individuals were specified and individual revenue and expenditures in foreign exchange were further facilitated and regulated. Second, trade and investment was made more convenient. The approval procedures for foreign exchange accounts opened for current account purposes were rescinded and the upper limit on these accounts were raised. Consequently, more and more enterprises opened accounts and the account balances increased by 32% year on year, satisfying demands for holding foreign exchange under the current accounts. Simplified vouchers and formalities facilitated the enterprises utilization of foreign exchange in the services trade. By lifting the limitations on foreign exchange purchases for overseas investment, enterprises were allowed to remit related early-phase expenses in advance and were encouraged to go global. The qualified foreign institutional investors (QFII) system was steadily improved. Forty-four institutions with a quota of USD 9.045 billion had been approved by the end of 2006. Third, the administration of foreign exchange inflows and sales was enhanced and improved trade-related foreign exchange collection and sales were subjected to enhanced management. Over 95% of the 170,000 enterprises registered with the national export verification and reporting system enjoyed greatly facilitated trade-related receipts and payments. The gap between trade and trade-related foreign exchange payments narrowed. The preliminary effects have already become apparent. The external debt and foreign exchange sales of foreign-funded real estate enterprises claimed enhanced administration and the principle of actual demands and self-use was applied to the purchase of domestic housing property with foreign capital. Fourth, vigorous efforts were made to cultivate and develop the foreign exchange market. The inquiry trading and market-maker system were introduced in the inter-bank foreign exchange market to enrich the trading types on the foreign exchange market and to improve general management over the sale and purchase of foreign exchange. At the end of 2006, there were 21 market makers in the inter-bank foreign exchange market, 77 financial institutions qualified for inter-bank forward transactions, and another 62 for swap transactions. The inter-bank business was obviously brisk, and transactions increased several-fold. Meanwhile, the electronic construction of foreign exchange administration was accelerated, and the operation and administration of foreign exchange reserves were continuously improved. Ms. Hu pointed out that we should objectively view the current disequilibrium in the balance of payments and accurately grasp its effects and trends. The balance of payments surplus indicates that our comprehensive national strength and global competitiveness are improving, promoting economic growth and employment, supporting the implementation of development strategies and reform in key fields, and maintaining financial stability. However, the continuous existence of a large surplus also complicates macro-control, imposes pressures for an appreciation of the RMB and increases trade frictions, thus impeding the transformation of economic growth patterns and the economic restructuring process. Therefore, an equilibrium in the balance of payments is critical to the reform and opening up as well as to rapid and sound economic development. Placing great emphasis on this issue, the Central Committee of the Party and the State Council proposed that we must treat the promotion of an equilibrium in the balance of payments as an important task for maintaining steady macro-economic development and have made important arrangements for achieving this goal. All levels of the SAFE must align their thinking with the spirit of the Central Government, fully recognize the significance of an equilibrium in the balance of payments to stabilize macro-economic development, and deeply understand the policies put forward by the Central Government regarding promoting an equilibrium in the balance of payments and thoroughly implement related policies and measures. Ms. Hu emphasized that 2007 is an important year for carrying out and implementing the concept of scientific development in an in-depth manner and for actively promoting the construction of a socialist harmonious society. This year, foreign exchange administration will follow Deng Xiaoping Theory and the important thought of the Three Represents as a guide, and will implement the overall concept of scientific development, earnestly carry out the strategic plans made by the Party Central Committee and the State Council since the 16th National Party Congress, closely follow the guidelines set out at the Central Economic Work Conference and the National Financial Work Conference, deepen the restructuring of the foreign exchange system, broaden capital outflow channels, vigorously develop the foreign exchange market, guard against the risk of foreign exchange reserves, tighten capital inflows and monitoring of sales, and promote an equilibrium in the balance of payments, thus promoting rapid and sound economic development and paving the way for the success of the 17th National Party Congress. The conference also made arrangements for foreign exchange administration in 2007. Ms. Hu emphasized that efforts should be concentrated on the following four tasks. First, the reform of foreign exchange administration will be deepened. It is planned that market-based development will be furthered and the reform of the foreign exchange management system will be pursued, loosening controls over foreign exchange holdings and use by enterprises and individuals will be continued in an orderly way, the development of the foreign exchange market will be accelerated, more favorable policies for the innovation of financial products will be introduced, products in the foreign exchange market will be enriched, the Renminbi exchange rate formation mechanism will be further improved, and the operation and administration of foreign exchange reserves will be strengthened, effectively guarding against risks and actively exploring and developing utilization channels and methods for the foreign exchange reserves. Second, foreign exchange outflows will be promoted. It is planned that the external investment channel will be further expanded, gradually loosening the limitations on the size and type of external financial investments by institutions and individuals and trying to make new progress in the increase of external financial investment. Meanwhile, it is planned that foreign exchange administration of direct investment abroad will be further improved, offering continual and vigorous support for competitive and powerful enterprises that sincerely wish to go global.Third, supervisory work will be reinforced. It is planned that effective monitoring of cross-border short-term capital flows, especially venture capital, will be strengthened. This year, efforts should be concentrated on improving the management methods over external debts, strictly controlling the overheated growth of foreign debts, continuing to implement and consolidate the three supervisory policies for trade-related foreign exchange collection and sales, individual foreign exchange and foreign capital access to the real estate market, and tightening the capital trade credit inflows and strictly monitoring abnormal capital inflows. Fourth, the methods of foreign exchange administration will be improved by adopting advanced technologies. Without effective measures, the administration will be just like a strawman and will have no effect. This year, efforts should be concentrated on keeping a close eye on abnormal cross-border fund flows and illegal foreign exchange transactions, further elevating the level of computerization, raising the efficiency of on-site and off-site inspections, and guaranteeing the actual effects of various policies. Ms. Hu stipulated that all cadres should strengthen the construction of their work style, improve their ability for administration of foreign exchange, carry out their work actively and innovatively according to the requirements of the new situations and tasks, and promote an equilibrium in the balance of payments with a down-to-earth approach. 2007-01-21/en/2007/0121/824.html
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A National Foreign Exchange Administration Conference has been held in Beijing . The participants earnestly studied the spirit of the Seventeenth National Congress of the CPC and China 's Central Economic Work Conference. A scientific concept of development was deeply implemented, foreign exchange administration work of prior periods reviewed and summarized, the current situation and tasks analyzed, and the main work for 2008 researched and arranged. Ms. Hu Xiaolian, deputy governor of the PBOC and administrator of the SAFE, attended the meeting and delivered a speech on foreign exchange administration. In 2007, according to the uniform plans set forth by the Party Central Committee and the State Council, the foreign exchange administrations continued to facilitate the holding and use of foreign exchange by domestic institutions and individuals, tightened supervision over capital inflows and sales of foreign exchange, and improved foreign exchange administration, thereby, making progress in various fields. First, a package of policies and measures on foreign exchange administration to promote a balance of payments equilibrium was promulgated. The SAFE abolished the quota limit on the foreign exchange account under the current account, integrated the foreign exchange administration policies for the customs special supervisory zone, and actively supported implementation of the Qualified Domestic Institutional Investors (QDII) system. Second, the SAFE further facilitated foreign exchange receipts and payments incurred to domestic institutions and individuals, and raised the total amount for individuals annual purchases of foreign exchange. Annual individual purchases of foreign exchange increased by almost 3 times, qualified finance companies were approved to deal with the trial operations of internal sales and purchases of foreign exchange, approvals of value-maintenance businesses under the debt accounts through overseas institutions, etc. were abolished, and enterprises were helped to enhance the efficiency of capital utilization. Third, the SAFE continued to broaden capital outflow channels. The annual outward remittances of FX capital under the overseas direct investment account totaled USD 10.82 billion, an increase of 32%. The outward remittances of foreign exchange investment with foreign exchange purchased by the QDII totaled USD 35.3 billion. Fourth, the SAFE continued to strengthen construction of the foreign exchange market. The SAFE introduced new institutions to the inter-bank foreign exchange market, enriched the trading categories and business scope, launched the swap business for the RMB and foreign currencies in the inter-bank market, and improved market access management for spot foreign exchange sales and purchases. Fifth, the SAFE tightened management of foreign exchange capital inflows and sales. It strictly monitored foreign exchange collection and payments under the goods trade of enterprises with much foreign exchange collection, reduced in phases the short-term external debt quota of financial institutions, strengthened management of foreign exchange registration and borrowing of external debt by foreign real estate enterprises, carried out a series of special inspections and investigations of key foreign exchange capital inflow links and areas, and intensified efforts to crack down on underground money houses and illegal foreign exchange trading, and other illegal and criminal activities, and constantly improved foreign exchange reserve management, while, at the same time, realizing the maintenance and appreciation of the national foreign exchange reserves, strengthening statistics and monitoring of the balance of payments, and boosting construction of IT applications for foreign exchange administration. Hu Xiaolian pointed out that, since the reform and opening up, China has been deepening its reform of the foreign exchange administration system and has made a series of breakthroughs. For example, the convertibility of RMB current accounts has proceeded gradually; the convertibility of capital accounts is increasing step by step; the formation of the RMB exchange rate is increasingly market-oriented; a foreign exchange market is gradually being established and has made considerable progress; the statistical and monitoring system for foreign exchange business is constantly improving and the management system for foreign exchange reserves is being perfected. Ms. Hu emphasized that the SAFE should continue to use the reform and development methods to solve future problems, devote more energy to institutional and mechanism innovations, and give better play to the basic role of the market in the allocation of foreign exchange resources, constantly improving the market mechanism and management system for the balance of payments and continuing to promote the convertibility of RMB capital accounts in a safe and orderly manner so as to guard against international economic risks. At present, the contradictions in the imbalance in Chinas balance of payments are still prominent; we still face many challenges to improve the situation in this regard. Generally, a twin surplus in the balance of payments will be maintained and various uncertainties will obviously emerge. This will increase the risk of volatility in Chinas balance of payments. Foreign exchange administration departments must always remain clear-headed, further enhance their sense of urgency, keep close track of the domestic and international situations, remain vigilant in peace time, take precautions in advance, and make good preparations to cope with all kinds of complex and difficult situations and emergencies. The conference also made arrangements for the major foreign exchange administration work for 2008. Hu Xiaolian stressed that the foreign exchange administration work in 2008 should fully implement the spirit of the Seventeenth National Congress of the Communist Party of China, hold high the great banner of socialism with Chinese characteristics, remain under the guidance of Deng Xiaoping Theory and the important thoughts of the Three Represents, and earnestly implement the scientific concept of development. Ms. Hu also emphasized deepening the reform of the foreign exchange administration system in accordance with the requirements of the Central Economic Work Conference and the specific arrangements of the work meetings of the Peoples Bank of China, to better meet the needs of domestic institutions and individuals to legitimately hold and use foreign exchange, and to strictly oversee and manage cross-border capital flows and strengthen foreign exchange reserve operations in a bid to improve the equilibrium in the balance of payments. Ms. Hu urged the SAFE to continue to follow and to do a better job in pushing forward the reform, promoting outflows, stressing supervision, and improving methods. First, innovative methods of foreign exchange administration under trade must be developed, vigorously promoting reform of the cancel-after-verification system for imports and exports, carrying out the reform of the foreign exchange administration of the services trade step by step, and formulating a unified set of regulations concerning foreign exchange administration of the services trade. Second, the foreign exchange market must be actively nurtured and developed, strengthening the infrastructure of the foreign exchange market and further improving currency exchange services. Third, the convertibility of the capital account should be promoted in an orderly way, actively supporting overseas direct investment conducted by domestic enterprises and individuals (namely, foreign industrial investment), and steadily pushing forward implementation of the qualified domestic institutional investor system to better satisfy the demands from individual residents for foreign exchange resulting from the growth of personal property income and diversified investment. Fourth, supervision over the foreign exchange business of financial institutions should be consolidated, intensifying supervision over banks implementing foreign currency policies and establishing and improving the bankssupervision and management system of their own foreign exchange revenue and expenditure. Fifth, management of foreign exchange capital collection and sales should be tightened, strengthening dynamic supervision and ex post verification of foreign exchange revenue and expenditures under the goods trade and services trade, further standardizing the administration of individual foreign exchange revenue and expenditures, continuing to strengthen the quota management of banksshort-term external debt, and conducting research on methods to improve external debt management in foreign-invested enterprises. Sixth, efforts should be made to intensify foreign exchange inspections of cross-border capital flows, carrying out a series of special inspections focusing on foreign exchange capital inflows and the flow direction of RMB capital after sales of foreign exchange, conducting special inspections on the compliance of banks in implementing foreign exchange policies and cracking down on underground money shops and illegal trading of foreign exchange, and other illegal and criminal activities together with the relevant departments, and, at the same time, further improving foreign exchange reserves management and promoting foreign exchange administration regulations and administrative capacity-building. 2008-01-29/en/2008/0129/864.html
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Hu Xiaolian, Deputy Governor of the People's Bank of China and Administrator of the State Administration of Foreign Exchange (SAFE), recently visited Dalian , Suzhou , and Wuhan to carry out onsite investigations on the current foreign exchange situation and on work to strengthen supervision over cross-border capital flows. Taking part in the investigations were comrades from the Ministry of Commerce, the General Administration of Customs, and other relevant departments. Ms.Hu held individual study meetings with the foreign exchange administrative departments in Northeast China, East China, and Central China . She also held informal discussions with import and export enterprises and conducted a field survey of foreign-related enterprises. Ms.Hu pointed out that although the domestic economy maintained rapid development this year, uncertainties are increasing and the macro-control situation remains serious, thus requiring adherence to the guideline of the "Two Preventions and One Tightening Measure," as set out by the central government to implement its instructions on strengthening supervision over cross-border capital inflows and outflows in foreign exchange administrative work and to improve the status of the balance of payments, thus ensuring China's economic and financial security. As a result of the aftermath of the U.S. subprime lending crisis and the impact of the currency adjustments in the major countries, the world economy witnessed a recession this year, with international financial markets becoming increasingly unstable. The changing exchange rates of the major currencies and prices of international energy and grain have had an extensive effect on the direction and scale of international capital flows. China 's efforts to avoid the impact of international short-term speculative capital and to safeguard the security of the national economy face greater challenges. In order to improve the performance of national macro-control, measures should be taken to strengthen the management of cross-border capital flows; one major action is to prevent speculative money from being transferred across borders through trade, commercial credits, and other channels. We should strengthen and improve verification of the authenticity and consistency of foreign exchange receipts and expenditures under the current account and actual trade deals and focus on enhancing control and management over short-term external debt by improving management of trade-related foreign exchange collection and sales and trade credits. Ms.Hu emphasized that improvements in the management of trade-related foreign exchange collection and sales and trade credits will promote convenient trade by adopting advanced information technology to fully achieve the effects of management, to simplify procedures, to raise efficiency, and to carry out various and proper measures for different industries and enterprises. She also pointed out that the policy adjustments according to the changing situations to ensure the authenticity of cross-border capital flows and its consistency with trade deals will help foster a good business environment for enterprises and will promote the smooth development of China 's economy and finance. During the investigation, Hu fully affirmed the efforts made by local foreign exchange administrations to carefully implement the requirements by the central government to strengthen supervision over cross-border capital flows. She added that the current work to facilitate the balance of payments equilibrium still faces great challenges and every foreign exchange administrative department at all levels should work hard to fulfill its duties and to enhance the overall level of foreign exchange administration. 2008-06-24/en/2008/0624/870.html
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To implement the newly revised Regulations on the Foreign Exchange System of the People's Republic of China (hereinafter referred to as the "Regulations"), the State Administration of Foreign Exchange (SAFE) recently held a system-wide teleconference, which was presided over by Hu Xiaolian, administrator of the SAFE, and was attended by Song Dahan, deputy director of the Legislative Affairs Office of the State Council, who gave a speech. Song Dahan first introduced the legislative background, principles, main content, and other items regarding the Regulations. He pointed out that aiming to facilitate trade and investment activities and to promote an equilibrium in the balance of payments and the healthy development of the national economy, the Regulations provide balanced management of capital inflows and outflows of foreign exchange, perfect the RMB exchange rate formation mechanism and the administrative systems for the foreign exchange business of financial institutions, establish an emergency security system for the balance of payments, intensify monitoring of cross-border capital flows, and improve exchange regulatory means and other measures and make clear the corresponding legal responsibilities. The revisions and implementation of the Regulations are specific measures to carry out the spirit of the 17th National Party Congress and the government work report and have great significance to facilitate trade and investment, strengthen and improve foreign exchange administration, promote an equilibrium in the balance of payments, maintain sustained, steady, and rapid economic development, and guard against international economic and financial risks. Hu Xiaolian made arrangements for the deployment of the next implementation-related work. She required that foreign exchange administrations at all levels unify their thinking, enhance understanding, and strengthen the initiative and consciousness to implement the Regulations. They should focus on the following points during studying and carrying out the Regulations: the first is to properly handle the relationship between promoting facilitation of trade and investment and intensification of management; the second is to advance with the times and focus on resolving the principal contradictions and main issues which currently affect the steady and rapid development of the national economy, macro-control effects, and the equilibrium in the balance of payments, especially with regard to settling the long-standing situation in the past of weak management of foreign exchange inflows so as to achieve balanced management; the third is all along to prevent international economic risks, in particular, to prevent those activities that harm the healthy development of Chinas national economy through exchange channels and BOP channels; and the fourth is to adhere to administration by law and inclusion of management of services according to the basic requirements of the administrative system reform. (End) 2008-08-11/en/2008/0811/875.html
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The State Administration of Foreign Exchange (SAFE), the Ministry of Commerce, and the General Administration of Customs recently jointly promulgated the Measures for the Online Inspection of Foreign Exchange Collection and Settlement of Export Proceeds for the purposes of strengthening supervision of cross-border capital flows and improving inspection of the authenticity and conformity of export transactions and the involved foreign exchange settlement. According to the Measures, the online inspection will be carried out on the foreign exchange collection and settlement of export proceeds beginning on July 14, and the registration management system for enterprises' trade credit will also become operational. At the beginning of the trial operation of the system, two deputy administrators of the SAFE, Li Dongrong and Deng Xianhong, respectively visited banks and enterprises in Beijing to investigate the trial run and onsite operations of the system, and they answered questions from banks and enterprises. It is known that on the whole so far the new system has functioned smoothly, and some enterprises have successfully carried out related business according to the new stipulations. As the director of the SAFE has pointed out, the Central Committee of the Party and the State Council attach great importance to strengthening supervision of cross-border capital flows, and on numerous occasions specific requirements have been proposed. The online inspection of foreign exchange collection and settlement of export proceeds and the registration management of enterprises' trade credit are of great significance for substantially preventing abnormal inflows of foreign exchange via trade, for maintaining normal trade order, and for safeguarding the economic and financial security of the state. Facing strict time limitations and a tough assignment, the banks are working on the frontline to enforce this policy, and are shouldering a huge responsibility to supervise the abnormal inflow of foreign exchange. The banks should maintain sound operations of the system, reinforcing the training of personnel, understanding the essence of the policy as soon as possible, mastering operations, and spreading the policy to enterprises as well as providing timely tracking and feedback on new issues and problems. The SAFE will pay close attention to implementation of the policy. Moreover, the leaders of the SAFE will visit various regions in the near future to investigate and to provide onsite instructions to banks and enterprises so as to discover and solve problems in a timely manner, and then to perfect the policy and to facilitate the legal operations of enterprises while restraining the abnormal inflows of foreign exchange. In order to further simplify the procedures and to facilitate operations by the enterprises, the foreign exchange administration is working with the taxation and other departments to study a way to carry out verification while also inspecting the foreign exchange collection of export proceeds. 2008-07-15/en/2008/0715/873.html