SAFE to further boost cross-border trade, investment facilitation
Photo taken on Aug. 19, 2021 shows the cross-border e-commerce exhibition area of the fifth China-Arab States Expo in Yinchuan, northwest China's Ningxia Hui Autonomous Region. (Xinhua/Feng Kaihua)
China's State Administration of Foreign Exchange (SAFE) released on July 24 an opinion-inviting circular to further deepen reform to foster cross-border trade and investment facilitation, reported Xinhua Finance.
SAFE mulled widening application of 10 policies on three aspects via the circular, including four on current account items and six relative to capital account.
Under policies to optimize cross-border trade opening up, four current account-related policies are outlined, mainly concerning reform measures which were piloted in certain regions previously and aim at further improving foreign exchange (forex) receipt and payment management for special trade.
Generally, the four policies include those to optimize forex management for market procurement trade, expand netting settlement in forex receipt and payment for processing trade, facilitate forex funds settlement for leasing business of domestic institutions and etc.
To boost capital account facilitation, the circular provides three policies on cross-border financing facilitation to sci-tech small- and medium-sized enterprises (SMEs), loosening restriction over the size of upfront expenses of outbound direct investment(ODI), and facilitation to payment and use of equities transfer funds for reinvested foreign direct investment (FDI) in China and capital raised via overseas listing by foreign-funded enterprises.
By including sci-tech SMEs into pilot applicable targets for cross-border financing facilitation, the circular supports sci-tech innovation of SMEs further. For eligible high- and new-tech companies, specialized-, characteristic- and innovative businesses and sci-tech SMEs in Tianjin, Shanghai, Jiangsu, Shandong, Hubei, Guangdong, Sichuan, Shaanxi, Beijing, Chongqing, Zhejiang, Anhui, Hunan and Hainan, they are allowed to borrow foreign debts within the quota of 10 million U.S. dollars or its equivalents. For qualified firms of the aforementioned three types in other regions, they are permitted to borrow foreign debts within the quota of 5 million U.S. dollars or its equivalents.
Besides, the circular also contains three capital account related policies to optimize forex management. (Edited by Duan Jing)