China to further facilitate cross-border trade, investment

China will introduce more measures to better facilitate cross-border trade and investment, including improving foreign exchange management and further streamlining regulatory requirements with a view to attracting foreign investors with a more enabling business environment.

The decision was adopted on Oct 23 at the State Council’s executive meeting, chaired by Premier Li Keqiang.

The Chinese government puts great emphasis on opening up the financial sector, and ensuring stability in foreign trade and foreign investment. General Secretary Xi Jinping has highlighted on multiple occasions the need to expand high-level, two-way opening-up of the financial sector, facilitate trade and investment, and sustain sound economic development. Premier Li Keqiang has emphasized the importance of continued opening-up of the financial sector in creating a new landscape of all-around opening-up.

Attendees at the meeting agreed on 12 measures to boost cross-border trade and investment.

It was decided at the meeting that the pilot reform of foreign exchange receipts and payments facilitation will be expanded. Procedures for receipts and payments of related funds will be simplified for micro and small cross-border e-commerce companies. The reporting process in foreign exchange businesses for trade in goods will be improved. Enterprises will make their own decisions on whether to set up verification accounts. Registration for the list of foreign exchange receipts and payments for trade will be facilitated for enterprises and their subsidiaries. Project contractors will be allowed to put their overseas funds under unified management.

“It is important to keep foreign trade and investment stable under the current situation by taking further steps in opening-up,” Premier Li said.

Foreign firms engaged in non-investment businesses will be allowed to make equity investments on the mainland with their capital funds. The pilot program that facilitates revenue payments under capital accounts will be expanded. Registration for writing off companies’ borrowings from foreign lenders will be delegated to banks. Pilot programs will be carried out where registration for each foreign loan is no longer required.

Limits on the number of foreign currency accounts under capital accounts will be removed, to facilitate foreign exchange settlement under capital accounts.

“Given the increasing complexity of global financial markets, it is important to guard against the risks in cross-border capital flows and maintain financial stability. The general principle is to maintain a macro-prudent policy while enhancing micro regulation,” the Premier said.

Statistics from the State Administration of Foreign Exchanges on Oct 6 show that China’s foreign exchange reserves stood at $3.09 trillion at the end of September, up by 0.6 percent from the beginning of this year.

“The RMB exchange rate needs to be kept basically stable at an adaptive and equilibrium level, and foreign exchange reserves at a reasonable level. This is crucial for the overall stability of the macro economy. It is also a principle that we have long followed,” Premier Li said.

Measures on keeping foreign trade stable were adopted at the meeting. Policies on export tax rebates and credit-based insurance will be further improved. More efforts will be made to develop a network of high-standard free trade areas, foster new forms of industry in foreign trade, and set up another group of comprehensive pilot zones for cross-border e-commerce. Imports including agricultural products, daily consumer goods, equipment and parts will be increased to meet domestic demand. New zones will be developed to facilitate innovation in imports. The meeting also urged hosting a successful China International Import Expo this year.

“China has a vast domestic market, yet is also deeply integrated into the global economy. There is much pressure on foreign trade. What is important now is that the many policies that have been introduced will be fully delivered, in an effort to achieve the goal we set early this year of ensuring the steady growth and raising the quality of foreign trade,” Premier Li said.

According to statistics released by the General Administration of Customs in October, China's foreign trade maintained steady performance in the first three quarters of this year. Imports and exports totaled 22.91 trillion yuan, up by 2.8 percent year-on-year. The number of foreign trade companies continued to grow. Another 141,000 were newly registered, up by 7.7 percent year-on-year.