China to Accelerate Reform in Foreign Exchange Management
China Forex: 2019 is an important year for China and the State Administration of Foreign Exchange. It is the 70th anniversary of the founding of the People's Republic of China and the 40th anniversary of the establishment of SAFE. This year is also critical to the goal of building China into a moderately prosperous society. What objectives have been set by foreign exchange authorities at this important time?
Sun Tianqi: SAFE will focus on supporting the reform and opening policies in foreign exchange regulation,as well as the maintenance of the nation's economic and financial security. More specifically,SAFE will step up its efforts to relax unnecessary regulatory restrictions,streamline its administrative procedures and deliver improved services. It will take a more active role in building a better business environment and energetically promote trade and investment liberalization and facilitation. The emphasis in 2019 will also include better communication with the market and improved management of market expectations. SAFE will also strive to enhance policy research.
China Forex: The Central Economic Work Conference in late 2018 stressed a "comprehensive opening up" and called for a "transformation in opening up the market,shifting the focus from goods and services to institutional changes." What does that mean for SAFE in terms of specific measures and policies?
Sun Tianqi: SAFE will earnestly implement the requirements of the Central Economic Work Conference. First,there will be more innovation in foreign exchange management. SAFE will employ foreign exchange management that supports the "pilot implementation" approach in the free trade zones,including all of Hainan province,which is the latest of China's free trade zones. Our experience will be reviewed and applied nationwide where suitable to support the development of the real economy. Second,SAFE will continue to serve the key national foreign strategies,particularly the "Belt and Road" initiative. Research will be conducted on foreign exchange management policy and risk prevention. Additionally,SAFE will carry out a survey on foreign exchange management in the countries participating in the "Belt and Road" program. Third,SAFE will improve the framework of basic laws and regulations on foreign exchange management,as well as legislative procedures and law enforcement requirements. Preparations are under way for amendments to The Regulations of the People's Republic of China in Foreign Exchange Management.
China Forex: What are SAFE's priorities this year as far as improving the business environment is concerned?
Sun Tianqi: 2019 will see continued efforts to streamline administrative procedures and delegate authority. Unnecessary administrative licensing requirements will be scrapped. Requirements for separate foreign exchange accounts will be reviewed and addressed. SAFE will promote the construction of a platform for foreign exchange- related public administration and services,with user convenience as a key goal. Other measures involve tightening regulatory loopholes. Moreover,SAFE is studying ways to ease regulations for cross-border payments related to financial services.
China Forex: Good communication with market participants is important in policy transmission and ensuring market confidence. What does SAFE plan to do to communicate better and guide market expectations?
Sun Tianqi: SAFE will strive to ensure the timely release of important policy information and market data. The channels for informing the public have already become more diversified to include SAFE's official website,Weibo,WeChat and so on. Press briefings will be used to help with guiding market expectations. In addition,SAFE will work hard to respond to public concerns in a timely fashion. SAFE will also strive to clear up market misunderstandings without delay.