In order to thoroughly implement the guiding principles of the Central Financial Work Conference, work hard to promote high-level financial opening up, and facilitate cross-border trade, investment and financing; the State Administration of Foreign Exchange (SAFE) recently issued the Notice of the State Administration of Foreign Exchange on Further Deepening Reforms and Facilitating Cross-Border Trade and Investment (Huifa [2023] No. 28, hereinafter referred to as the “Notice”).

The Notice includes a total of nine policies and measures, of which four concern current accounts, mainly to further improve the administration of foreign exchange receipts and payments for special trade, and extend the facilitation measures that have been piloted in some regions to other regions across China. To be more specific, the four policies and measures include optimizing foreign exchange administration on market procurement trade, relaxing requirements for the netting settlement of balances in processing trade, improving the collection and payment of cross-border trade funds under entrusted agents, as well as facilitating the settlement of foreign exchange funds for the commercial leasing business of domestic institutions, etc. Five policies and measures are rolled out for the capital account, mainly to scale up the facilitation policies for the capital account and update or optimize the foreign exchange administration under some capital accounts. The five measures include promoting the policy on pilots for the facilitation of cross-border financing across China, relaxing restrictions on the scale of upfront expenses for overseas direct investment (ODI), facilitating the payment and use of equity transfer funds and funds raised from overseas listings under the category of domestic reinvestment made by foreign direct investment (FDI), improving the management of negative lists on the use of capital account revenues, as well as  canceling the approval requirement for opening foreign debt accounts in other regions.

Moving forward, SAFE will, under the arrangements and demands of the Central Financial Work Conference, play equal emphasis on development and security, further deepen reforms and opening up in the foreign exchange sector, optimize foreign exchange services with a focus on driving technological innovation and the development of micro, small and medium-sized enterprises (MSMEs), enhance efforts in policy implementation, continue to improve the  facilitation of cross-border trade, investment and financing, promote the stabilization of foreign trade and foreign investment and better serve the high-quality development of the real economy.