Over the past 40 years of reform and opening up，under the leadership of the Communist Party of China (CPC)，China's foreign exchange administration under the capital account has given overall consideration to facilitation and risk prevention in accordance with the characteristics of foreign-related economic development and the requirements of opening up at different stages，effectively serving the development of the real economy. At the same time，it has held the bottom line of non-occurrence of systemic financial risks，and gradually explored a path of capital account opening with Chinese characteristics.

1978-2000: Exploring the reform of foreign exchange administration under the capital account

Since the third Plenary Session of the 11th CPC Central Committee，the financial system reform began to be implemented in a planned and step-by-step way along with the economic system reform. In 1993，the Notice of the State Council on Further Reform of the Foreign Exchange Administration System was issued，clearly stating that "the long-term goal of the reform of China's foreign exchange administration system is to realize the convertibility of the renminbi". Generally speaking，the renminbi convertibility under the capital account was at a low level in this stage. Strong administrative management was implemented and most transactions under the capital account needed prior approval.

Since the reform and opening up，the active use of foreign direct investment (FDI) has become an important means to drive China's economic development，with the formulation of laws on Sino-foreign joint ventures，Sino-foreign cooperative ventures and exclusively foreign-owned enterprises as the starting point. It played an important role in alleviating the shortage of foreign exchange resources in China at that stage to boldly introduce foreign-invested enterprises to open factories in China and to develop export-oriented economy. The FDI has gradually become the main form of foreign capital utilization in China since 1992，when the proportion of FDI began to exceed external borrowing.