In 2016, the People's Bank of China and the State Administration of Foreign Exchange (SAFE) built a macro-prudential management policy framework for full-scale cross-border financing while cancelling ex-ante approval for external debt, which has greatly facilitated cross-border financing by domestic institutions. In recent years, a legion of promising innovative companies with independent intellectual property rights and technologies as well as advanced processes have emerged as the new development concepts were implemented. But some of them, especially micro, small and medium innovative companies that have limited net assets at the early stage could hardly find enough financing due to the low ceiling of quotas for cross-border financing. To encourage innovation and support healthy development of micro, small and medium high-tech companies, the SAFE initiated piloting for external debt facilitation in the national independent innovation demonstration zone in Zhongguancun, Beijing in 2018, allowing eligible micro, small and medium high-tech companies to find access to external debt themselves within a certain limit. This policy has met the demands of some micro, small and medium high-tech companies in Zhongguancun for overseas financing and reduced their financial costs.

To meet the requirements raised at the 19 National People's Congress that efforts should be stepped up to accelerate the building of the new system for developing an open economy at a higher level to boost high-quality economic growth and to further facilitate full use of markets and resources, domestic and overseas, by micro, small and medium high-tech companies, the SAFE decides to expand the piloting scope to include Shanghai (China (Shanghai) Pilot Free Trade Zone), Hubei (China (Hubei) Pilot Free Trade Zone and Donghu New Technology Industrial Development Zone in Wuhan), Guangdong and Shenzhen (Guangdong-Hong Kong-Macao Greater Bay Area). In the meanwhile, further efforts will be made to strengthen external debt facilitation for Beijing Zhongguancun Science City Haidian Industry Park.

Next, guided by the decisions and plans of the CPC Central Committee and the State Council, the SAFE will keep foreign trade and investment stable, launch more foreign exchange facilitation initiatives, and optimize the business environment for foreign exchange to boost the stable and healthy development of the economy and society. Further, the SAFE will enhance the management framework of macro-prudence and micro regulation for the foreign exchange market to guard against cross-border capital flow risks and ensure the bottom line that no systematic financial risk will occur.