On the morning of July 26, the State Administration of Foreign Exchange (SAFE) held a video conference on foreign exchange administration for the second half of 2021. The meeting conveyed the study and implementation of the essential arrangements of the CPC Central Committee and the State Council on economic and financial work. It reviewed the work in the first half of the year and analyzed the economic, financial, and foreign exchange situation at home and abroad. The meeting also carried out research and deployment on key tasks for the second half of the year. Pan Gongsheng, Secretary of the CPC Leadership and Administrator of the SAFE, delivered the work report. Members of the SAFE CPC Leadership and the Chief Accountant also attended the meeting.

The meeting believed that, in the year to date, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, SAFE has been earnestly implementing the decisions and arrangements of the CPC Central Committee and the State Council, ensuring “stability on the six fronts” and “security in the six areas.” It has continuously promoted reforms and opening-up in the foreign exchange sector. SAFE has also effectively maintained the basic stability of the foreign exchange market and China’s economic and financial security. This helped create a favorable foreign exchange market environment for the celebration of the 100th anniversary of the founding of the Communist Party of China (CPC). First, SAFE has promoted high-quality development of Party building. Through thorough study and implementation of the guiding principles in General Secretary Xi Jinping’s Keynote Speech at the Party History Study and Education Mobilization Conference, SAFE has made solid progress in party history study and education, and further promoted the practical activities of “I do practical work for the masses”. The Administration has also launched a series of activities to celebrate the 100th anniversary of the founding of the CPC. Led by the political building of the Party, the Administration will step up to further rigorous self-discipline of the Party. Second, SAFE has deepened the reform and opening-up in the foreign exchange sector and facilitated cross-border trade and investment. SAFE has promoted pilot projects to facilitate foreign exchange receipts and payments of trade, improved foreign exchange transactions for individuals, supported the healthy development of new forms of trade, carried out pilot projects to integrate local and foreign currency capital pools for multinational corporations, and enriched the application scenarios of cross-border financial blockchain service platforms. Third, SAFE has achieved positive results in preventing risks of cross-border capital flows. It has strengthened the macro-prudential management and expectation management, and provided guidance to enterprises in establishing the concept of “exchange rate risk neutrality”. SAFE has also effectively addressed breaches of laws and regulations in the foreign exchange field and maintained healthy order in the foreign exchange market. Fourth, SAFE has continuously improved the operation and management of foreign exchange reserves. Foreign exchange reserves have remained stable at around US$3.2 trillion.

The meeting stressed that, in the second half of 2021, SAFE should continue to base themselves on the new development stage, implement the new development concept, build a new development pattern, better coordinate development and security, constantly reform and improve the foreign exchange management system and mechanism that are compatible with the new system of a higher-level open economy, and promote the high-quality development of foreign exchange management.

The meeting set out the key tasks for foreign exchange administration in the second half of 2021. First, SAFE will step up to comprehensively govern the Party with strict discipline. Through earnest study and implementation of the spirit of General Secretary Xi Jinping’s important speech at the celebration of the 100th anniversary of the founding of the CPC, SAFE will closely link the study and education of the Party’s history with the work of the foreign exchange management, and make sure the full and effective implementation of “I do practical work for the masses” task list. SAFE will accentuate Party conducts and uphold integrity, perform strict supervision and management of cadres, and build a high-quality and professional foreign exchange management team who are loyal, incorruptible and responsible. Second, SAFE will unswervingly promote reform and opening-up in the foreign exchange field. It will ensure the comprehensive implementation of all the existing facilitation policies and further expand the scope of facilitation pilot projects such as receipts and payments of foreign exchange in trade, cross-border investment by private equity funds, and fund pools with integrated domestic and foreign currency for multinational enterprises. SAFE will also actively support new forms and models of foreign trade, facilitate foreign exchange transactions for individuals, and provide support mechanisms for regional openness and innovation. Third, SAFE will improve the integrated management framework of “macro-prudence and micro-regulation” in the foreign exchange market. It will improve cross-border capital flows by strengthening macro-prudential measures, improve the micro-regulation of the foreign exchange market by transforming the regulatory approach. SAFE will delve into establishing the authenticity check management mechanism mainly with due diligence in advance, monitoring in the process, spot check after the event, and substantive review and exemption with due diligence. SAFE will severely crack down on illegal activities in the foreign exchange field, such as underground banks and cross-border gambling. Fourth, SAFE will deepen reform to “streamline administration and delegate power, improve regulation, and upgrade services”. It will continue to streamline administrative licensing matters, standardize the handling of administrative licensing matters, encourage more foreign exchange administration to be conducted online, and upgrade “Internet + government services”. Fifth, SAFE will improve the ability to operate and manage foreign exchange reserves, promote the capability construction of scientific and technological operation and management, and ensure the safety and flow of foreign exchange reserves, as well as the maintenance and appreciation of their value. Sixth, SAFE will consolidate the essential work of foreign exchange administration. It will strengthen research around the “14th Five-Year” foreign exchange administration reform plan and revision of the Regulations on Foreign Exchange System, build a high-level statistical system of balance of payments, and promote the construction of “digital foreign exchange administration” and “safe foreign exchange administration”.

Officials at or above the director level from all departments and subsidiaries of the SAFE attended the meeting in the main venue. Comrades in charge of the Discipline Inspection and Supervision Office of the CPC Central Commission for Discipline Inspection and the National Commission of Supervision in the PBOC, the Financial Audit Bureau I of the National Audit Office, and relevant departments of the PBOC were invited to attend the meeting. SAFE branches (administrative offices) participated in the meeting at the branch venues. (End)