In 2022, China’s State Administration of Foreign Exchange (SAFE) launched high-level opening-up pilot program for cross-border trade and investment in four regions, including Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone, Nansha New Area of China (Guangdong) Pilot Free Trade Zone, Yangpu Economic Development Zone in Hainan Province, and Beilun District of Ningbo City in Zhejiang Province. Since the initiation of the pilot program, it has produced positive outcomes by effectively managing risks while fostering the development of foreign-related businesses in the pilot regions. According to the arrangements of the central financial work conference, the SAFE has made the decision to expand the pilot regions to include Shanghai City, Jiangsu Province, Guangdong Province (including Shenzhen City), Beijing City, Zhejiang Province (including Ningbo City), and Hainan Province (collectively referred to as the pilot regions) to further facilitate cross-border trade, investment, and financing. The expansion of high-level opening-up pilot program is based on a comprehensive review of the pilot experience. The effective foreign exchange facilitation policies and measures implemented in earlier pilot program will be replicated and promoted in the extended pilot regions.

A total of eight policies will be implemented for the trial expansion. Specifically, five pilot policies are issued concerning the current account, including facilitating the receipts and payments of foreign exchange under the current account, supporting new types of international trade settlements, expanding the scope of netting settlement of balances in trade, exempting special foreign exchange refund from registration, and enhancing the management of payments on behalf of another party or apportionment business under trade in services. Meanwhile, three pilot policies are issued concerning the capital account, including foreign-invested enterprises being exempt from registration when reinvesting in China, the financial leasing parent company and its subsidiaries being permitted to share their external debt quotas, and foreign exchange registration for foreign debt, overseas listing, and other capital-related businesses being handled directly by banks. The SAFE bureaus in the pilot regions will further formulate and implement detailed rules and regulations to facilitate compliance in business operations for banks and enterprises.

The SAFE will make continuous efforts to enhance high-quality financial services and facilitate cross-border trade, investment, and financing to promote high-quality development by high-level opening-up. Furthermore, it will continue to coordinate financial openness and security, enhance the capabilities of regulatory systems in the context of increased openness, and take a holistic approach to plan and advance the reform and opening-up while addressing potential risks. In doing so, the SAFE firmly upholds the bottom line of preventing systemic financial risks from occurring.