The Promotion of Foreign Exchange Administration in Key Areas has Made Significant Progress

Foreign exchange administration conferences and relevant documents all lay great emphasis on the transitions of the foreign exchange administration concepts and patterns. The recently held administrators of local branches of foreign exchange administration forum indicated that the overall situation of <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />China’s foreign exchange receipts and payments may still face some difficulties and uncertainties in the second half year ahead. We are expected to pay close attention to the current situation and earnestly estimate risks as well as investigate effective solutions and measures. The next assignment of the foreign exchange administration departments at all levels is to accelerate the transition of the foreign exchange administration concepts and patterns as well as promote the reform of foreign exchange administration in key areas.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

At national foreign exchange administration conference that held at the beginning of this year, Yi Gang, the deputy governor of the People's Bank of China (PBOC) and administrator of the State Administration of Foreign Exchange (SAFE), pointed out that we are expected to comprehensively implement scientific development, the spirit of the Third and Fourth Plenary Session of the 17th Central Committee of the C.P.C and the Central Economic Work Meeting in accordance with the strategic deployment on ensuring stable and rapid economic growth in order to promote the transition of the foreign exchange administration concepts and patterns as well as foreign exchange administration reform in key areas.

China is a large developing country which is highly involved with economic globalization and has been gradually opening up to the rest of the world. The flows of cross-boarder funds present great complexity and their scales are expending. Moreover, the need for facilitative conditions from banks, enterprises and individuals is growing. The foreign exchange administration departments have shouldered heavy responsibilities on supervising the flow of cross-boarder funds and safeguarding our national economic security. All of this requires the transition of the foreign exchange administration concepts and patterns keeping pace with the current age and also make reasonable modification when necessary. In addition, we should also improve our services in order to meet the needs of growing facilitative conditions. Therefore, foreign exchange administration shall be guided by the scientific concept of development and achieve “five transitions” of the foreign exchange administration concepts and patterns.

However, the transitions of the foreign exchange administration concepts and patterns cannot be happening overnight which requires both a long-term point of view and to be realistic about the current situation. By doing so, the transition ahead can be carried out in good order. In the second half year of 2010, foreign exchange administration departments will promote the reform in key areas in accordance with the “five transition” in order to assist the transition of development patterns and the general strategic goals of the economic structure adjustments. Additionally, export verification reform will be further accelerated. Relevant foreign exchange administration departments shall be fully prepared to attack the inflow of “hot money”, promote the system integration and capital accounts reform, improve the transparency of foreign exchange administration and strengthen the management of foreign exchange reserve.