A national work conference on foreign exchange administration was recently held in Beijing. Following the spirit of the 18th CPC National Congress, the Third and Fourth Plenums of the 18th CPC Central Committee and the Central Economic Work Conference, the conference reviewed foreign exchange administration in 2014, analyzed the current economic, financial, and BOP situations, and made plans for foreign exchange administration in 2015. Yi Gang, SAFE administrator and PBC deputy governor, delivered a work report. Deputy administrators, discipline and inspection heads, chief accountants, heads of the SAFE branches (foreign exchange administration departments) and divisions of the SAFE participated in the conference.

The conference pointed out that following the plans of the CPC Central Committee and the State Council and under the direct guidance of the CPC Committee of the PBC, the foreign exchange administration departments have regarded the reform of foreign exchange administration as a top priority in 2014. Specifically, the conference promoted the "five shifts" in foreign exchange administration and reduced the administrative approval items in order to streamline administration, delegate power, and facilitate trade and investment. The conference also launched pilot reforms, such as centralized operations for the foreign exchange capital of MNCs and voluntary settlement of foreign exchange capital to promote development of the foreign exchange market and to further expand the capital utilization channels for "going global." The conference also improved the statistics and monitoring system for cross-border capital flows and stepped up foreign exchange inspections to strengthen capabilities for on-going and ex-post regulation. In addition, operations, management, and utilization of foreign exchange reserves were enhanced and capabilities were consistently improved to serve the economic restructuring, transformation, and upgrading. To sum up, the conference successfully completed the tasks established at the beginning of the year.

The conference stressed that 2015 will be key to deepening the reform and will mark the first year to advance the rule of law as well as the last year to complete the 12th Five-year Plan. During the year, following the spirit of the 18th CPC National Congress and the Third and Fourth Plenums of the 18th CPC Central Committee and the plans of the Central Economic Work Conference, the foreign exchange administration departments should adapt to the new normal in economic development and accelerate the "five shifts" in foreign exchange administration to achieve the goal of realizing a basic equilibrium in the BOP. Focusing on making breakthroughs in the reform, the convertibility of cross-border capital and financial trade should be increased in good order, the foreign exchange market should be further developed, risk-prevention controls should be intensified, and an external debt and management system for capital should be built and improved under a macro-prudential management framework, and the operations, management, and utilization of the foreign exchange reserves should be enhanced innovatively so as to promote stable and healthy economic development.

The conference also set the working priorities for foreign exchange administration in 2015. The foreign exchange authorities will be required to: first, adhere to law-based administration and continue to promote administrative streamlining and delegation of power in terms of foreign exchange administration; second, continue with the reform and opening up and accelerate capital account convertibility; third, maintain a bottom line for risks by intensifying monitoring, warnings, and risk responses with respect to cross-border capital flows; fourth, transform management by accelerating the building of an external debt and capital flow management system under a macro-prudential framework; fifth, put heavy pressure on those who break the laws and crack down on illegalities and foreign exchange violations; sixth, promote the development of the foreign exchange market under guidance of the market; seventh, promote innovative utilization of the foreign exchange reserves and further improve the operations and management of the foreign exchange reserves to serve the overall economic interests; eighth, step up efforts to accomplish basic tasks, such as news promotion and research based on the work priorities; and ninth, continue with strict management by enhancing CPC building, team building, and internal management, and stepping up efforts to clean up the work styles and to promote integrity among CPC officials.