Foreign exchange reform vitality booster for cross-border trade

The State Administration of Foreign Exchange has further optimized the foreign exchange business process and deepened the reform of foreign exchange management for the trade in goods.

Banks are encouraged to continuously optimize review procedures so that enterprises can better enjoy the foreign exchange facilitation measures. This move has effectively promoted investment and financing in the cross-border trade process of enterprises. The SAFE will continue to deepen reform to facilitate foreign exchange for cross-border trade, continue to steadily expand institutional opening-up in the foreign exchange field, further increase the supply of facilitation policies, and optimize banks’ foreign exchange services.

The SAFE optimizes the differentiated management of business entities and allows more small and medium-sized enterprises to enjoy high-quality foreign exchange services under the premise of controllable risks. Banks should actively support the development of new business formats and models, such as cross-border e-commerce and the market procurement trade. They should also support more qualified financial institutions to carry out settlement of new trade formats, enrich trade settlement channels and tools, further improve the efficiency of corporate capital use and reduce settlement costs.

At the same time, the SAFE, along with other financial watchdog departments, should strengthen the monitoring and analysis of cross-border capital flows and improve their response plans to severely crack down on illegal foreign exchange activities, such as underground banks, and maintain the healthy order of the foreign exchange market. Illegal funds and speculative funds disrupt the market order and even build black and gray capital chains. Seeking illegal profits through underground banks, these capital chains help collect and transfer funds for various crimes such as gambling, tax fraud, smuggling and telecommunications fraud.

It is good to see that the SAFE will introduce and apply more financial regulatory technology, consolidate the foundation of big data analysis, update iterative indicator models, improve the level of intelligent analysis, screen and verify bank risk transaction reports, and improve the ability to accurately identify foreign exchange risks.