SCIO briefing on China's foreign exchange receipts and payments in Q1

The State Council Information Office (SCIO) held a press conference in Beijing on Friday to brief the media on China's foreign exchange receipts and payments in the first quarter of 2020. April 21, 2020

People's Daily Overseas Edition:

Foreign-related businesses have been greatly impacted due to the outbreak of the pandemic. What kind of measures has SAFE taken to support the resumption of work and production for enterprises? What is the current effect of such measures? Thank you. 

Wang Chunying:

Thank you for the questions. These are questions that enterprises care about. SAFE has implemented the decisions and arrangements of the CPC Central Committee and the State Council, and it took effective measures that provided great support for pandemic prevention and control as well as the resumption of work and production at enterprises. Those measures can be summarized in the following aspects:

First, it opened a "green channel" for foreign exchange business to provide support for the resumption of work and production. For example, the procedures of import payment and collection of export proceeds related to pandemic prevention materials have been simplified, and financing business related to pandemic prevention and control has been further streamlined. Meanwhile, for enterprises that are in need, quotas for borrowing foreign debts can be abolished and they can apply for registration of foreign debts online. We are also ensuring the normal use of foreign exchange by individuals and enterprises while also encouraging online foreign exchange transactions. We provide support and guidance to China Foreign Exchange Trade System and Shanghai Clearing House in reducing or exempting fees for foreign exchange transactions and clearing procedures of relevant institutions in Hubei province. From Jan. 27 to March 31, the proportion of foreign debt handled online nationwide reached 93%, compared with 61% in 2019. 

Second, we will continuously strengthen the reform and opening up of the foreign exchange sector and facilitate cross-border trade and investment. The SAFE launched 12 facilitation measures in October 2019 and raised the macro-prudential adjustment parameters for full-caliber cross-border financing in March 2020 so that companies have more freedom in acquiring foreign debts and using overseas funds. On April 14, it introduced eight other facilitation measures to streamline the foreign exchange business. In general, these facilitation measures focus on three aspects. One is to help stabilize foreign trade. The measures mainly include expanding the pilot program of facilitating foreign exchange receipts and payments in trade, facilitating foreign exchange settlement in cross-border e-commerce, and improving the reporting methods of foreign exchange business in the trading of goods. The second is to help facilitate cross-border financing. The moves include popularizing the reform to facilitate the payments of capital account income nationwide, expanding the pilot program of facilitating foreign debts to support cross-border financing of high-tech companies, and reforming the registration and administration of foreign debts of companies. The third is to improve services for the foreign exchange business. The measures mainly include facilitating the use of electronic documents in the foreign exchange business. These measures can significantly reduce the time and labor costs of companies. For example, the pilot measures for facilitating foreign exchange receipts and payments in trade saved over 50% of the time of related enterprises.

Third, we will actively use the cross-border financial blockchain service platform and other technological means to facilitate the financing of small and medium-sized enterprises (SMEs) for trade. As of April 7, nearly 3,000 companies had obtained $22.7 billion of loans through accounts receivable financing over the platform, over 75% of which were SMEs.

In the next step, we will further sort out the facilitation measures that can be introduced to help companies resume work and production as well as carry out cross-border trade, investment, and financing activities. At the same time, we will adhere to active, gradual, and controllable opening up, which means that relevant policies will not go backward. In addition, we will also actively prevent risks as we always do.

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