Aerial panoramic photo taken on Oct. 25, 2020 shows a view of the Lin-Gang Special Area of Pudong New Area in Shanghai, east China.
BEIJING, Jan. 11 (Xinhua) -- China's State Administration of Foreign Exchange (SAFE), the country's forex regulator, piloted since early January higher level of opening up measures for cross-border trade and investment in selected areas of free trade port and zones, reported Xinhua Finance.
SAFE took the move to support forging new mechanism for economic opening up of higher level, with the pilot policies including nine capital account reform measures, four current account-related facilitation measures and two requirements to strengthen risk control and regulatory supervision.
The selected areas include the Lin-Gang Special Area of China (Shanghai) Pilot Free Trade Zone, Nansha new area of Guangzhou in China (Guangdong) Pilot Free Trade Zone, Yangpu economic development zone of Hainan free trade port, and Beilun District of Ningbo, Zhejiang Province.
On capital account reform, the measures highlighted expanding corporate cross-border financing channels as they support small- and micro-sized high-tech and new tech businesses of independent borrowing from foreign parties within certain quotas, pilots of qualified foreign limited partnership (QFLP) and qualified domestic limited partnership (QDLP) business, prudent opening-up of cross-border asset transfer business and pilots of cash-pooling service for multinational companies that unifies domestic and foreign currencies management.
Meanwhile, the measures aim at improving cross-border investment and funding facilitation through exempting foreign-funded enterprises from registering their reinvestment in China, allowing direct bank treatment of foreign exchange business registration under the capital account for qualified non-financial enterprises, expanding the use of capital receipts under the capital account, permitting qualified enterprises to select the currencies for their cross-border investment and financing, and raising appropriately the ceiling of non-financial enterprises' lending abroad.
On current account facilitation, the related measures include facilitating capital receipts and payment by quality enterprises, supporting banks optimizing settlement of new type of international trade, orderly broadening the scope of enterprises practicing settlement netting of trade balances and exempting special forex rebate in goods trade from registration.
To enhance risk control and regulatory supervision, the two requirements attach importance to strengthening cross-border fund flow risk monitoring and alert and counter-cyclical adjustment as well and cracking down illegal activities in forex related businesses to maintain the forex market stability. Establishing pilot mistake correction mechanisms, reinforcing in-process and ex-post supervision, improving off-site regulatory supervision, and watching over large sum cross-border transactions are also vowed to secure smooth progression of the pilot measures.
In future, SAFE will guide the pilot areas under the premises of cementing risk control systems and upholding national economic and financial security to further deepen reform and widen opening up in forex related businesses, optimize cross-border trade and investment liberalization and facilitation, and better business environment to serve the real economy. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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