On the morning of January 4, the State Administration of Foreign Exchange (SAFE) convened the 2023 National Foreign Exchange Administration Work Conference via video conferencing in which participants earnestly studied and implemented the decisions and instructions of the 20th National Congress of the Communist Party of China (CPC) and the Central Economic Work Conference, reviewed the foreign exchange administration work in 2022, analyzed the current financial and foreign exchange situation, and established the deployment plan of key tasks for 2023. Pan Gongsheng, Secretary of the CPC Leadership Group and Administrator of the SAFE, presented a work report. Members of the CPC Leadership Group of the SAFE attended the conference.

According to the conference, in the year of 2022, the SAFE resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council. Under the specific guidance of the Financial Stability and Development Committee of the State Council, the SAFE has conscientiously striven to ensure effective COVID-19 containment, economic stability and development security. We have deepened the reform and opening-up in the field of foreign exchange to better serve the development of the real economy. At the meantime, we have effectively maintained a stable operation of the foreign exchange market and the national economic and financial security to provide strong support for stabilizing the macroeconomic market. Throughout the year, the international balance of payments remained in good position, and the resilience of the foreign exchange market was significantly enhanced. First, the SAFE improved the overall quality of Party building by centering on the political construction. We thoroughly studied, publicized, and implemented the decisions of the 20th National Congress of the CPC. In addition, we unswervingly advanced the work of exercising full and strict governance over the Party. In accordance with the requirements of the “five enhancements” and “four integrations”, the inspection and rectification under the Party’s Central Committee were put in place. We strengthened the building of grassroots Party organizations and encouraged the branch offices to conscientiously perform “two duties for one post”. Second, the SAFE helped enterprises out of their difficulties by adopting more favorable measures for foreign exchanges administration and promoted further and effective reform and opening-up. We encouraged the facilitation of cross-border financing for high-tech enterprises and “professional, refined, specific and novel” enterprises. We also pushed forward the progress of the integrated cash-pooling of both domestic and foreign currencies for multinational companies and advanced the facilitation of foreign exchange receipts and payments of trade for high-quality enterprises, and so on. In the meantime, we improved upon the capital management for overseas investors investing in China’s bond market, and strengthened the fund management of overseas institutions in issuing bonds within the boundary of China, which facilitated cross-border trade, investment, and financing. Notably, we ensured the convenient and efficient use of foreign exchange for the Beijing 2022 Olympic Winter Games. Furthermore, by focusing on SMEs, we were able to maximize the foreign exchange services, improved upon the level of enterprise exchange rate hedging services, and enriched the application scenarios of cross-border financial service platforms. Moreover, we supported regional openness and innovation, and accelerated the high-level opening pilot projects for cross-border trade and investment. Third, the SAFE effectively prevented and defused external shock risks. We strengthened the monitoring and analysis of the foreign exchange situation, enhanced macro-prudential management and expectation guidance, and enabled off-site inspections using science and technology. Moreover, we kept high pressure on cracking down illegal foreign exchange activities including underground banks and cross-border gambling, and maintained the stable operation and sound order of the foreign exchange market. Fourth, the SAFE optimized the operation and management of foreign exchange reserves to achieve overall stability in the scale of foreign exchange reserves.

The conference outlined that the past five years were extremely unusual and extraordinary. The SAFE adhered to strengthening the overall leadership of the CPC and the centralized and unified leadership of the CPC Central Committee. By coordinating development and security, as well as continuously deepening reform and opening-up in key areas of foreign exchange, we have basically built an open and diversified foreign exchange market with sound functions and orderly competition, which has successfully coped with multiple and high-intensity external shocks in the foreign exchange market. In addition, we continued to make better the foreign exchange reserve operation and management system with Chinese characteristics, and made important headway in the reform, development, and stability of foreign exchange, contributing significantly to China’s high-quality economic development.

The conference emphasized that, for 2023, foreign exchange administration will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and will fully implement the guiding principles from the 20th CPC National Congress and the Central Economic Work Conference, as well as uphold and strengthen the centralized and unified leadership of the CPC Central Committee over financial work. Striving to make progress while maintaining stability, the SAFE will uphold fundamental principles and break new ground, fully implement the new development philosophy, and speed up the establishment of a new development pattern. In accordance with the requirements of “Six Better Coordination”, the SAFE will deepen reform and opening-up in the foreign exchange sector to promote high-quality development, guard against risks of external shocks and maintain a safe bottom line, and ensure the safety, liquidity, value appreciation of foreign exchange reserve assets, so as to provide strong support for a sound start in building a modern socialist country in all respects.

The conference outlined the key tasks for foreign exchange administration in 2023. First, the SAFE will make further efforts to exercise full and strict governance over the Party. To be specific, the SAFE will have a profound understanding of the decisions of the CPC on Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We will resolutely follow up on the decisions and the arrangements of the CPC Central Committee, continue to consolidate the results, and increase the effectiveness of the CPC Central Committee’s inspection and rectification efforts. We will also strictly comply with the central Party leadership’s eight-point decision on improving working behavior, and keep up our efforts to tackle the Four Malfeasances (i.e. favoring form over substance, bureaucratism, hedonism, and extravagance). Furthermore, we will strengthen the building of grassroots Party organizations and a team of senior staff who are loyal, clean, responsible, and professional. Second, we will deepen reform and opening-up in the field of foreign exchange administration. Specifically, we will steadily push for the high-level opening-up of the capital account, and maximize the pilot capital pool service integrating domestic and foreign currency management for multinational corporations. We will increase the coverage of policies on foreign exchange receipt and payment method for trade to high-quality enterprises, encourage the innovative and standardized development of new forms and models of trade. We will improve upon the exchange rate hedging services for micro, small and medium-sized enterprises, and explore for more diverse application scenarios of cross-border financial service platforms. Moreover, we will innovate and optimize foreign exchange management policies to better serve China’s major regional development strategies. Third, the SAFE will guard against the risks of cross-border capital flow. We shall improve upon the monitoring and analysis of the foreign exchange situation, enhance macro-prudential management and guidance of expectations, and enrich the macro-prudential policy toolbox. At the same time, we will improve the micro-supervision of the foreign exchange market, and accelerate the establishment of an authenticity management mechanism featuring “substantial truth, diversified methods, due diligence, as well as safety and high efficiency”. We will also improve upon the off-site capacity building, and crack down on illegal foreign exchange activities. Fourth, SAFE will improve the management of foreign exchange reserves. Specifically, the SAFE will promote capacity building in terms of professional investment, scientific and technological operation and management, and market-oriented institutional governance, in order to ensure the safety and liquidity of foreign exchange reserve assets while maintaining and increasing their value. Fifth, the SAFE will consolidate the backbone of foreign exchange administration. Notably, the SAFE will reinforce the construction of the rule of law in the foreign exchange market and develop a high performing statistical system for the balance of payments, further promote the “digital foreign exchange administration” and “safe foreign exchange administration”, and upgrade the level of foreign exchange research.

Head officials of relevant departments, affiliated enterprises, and institutions of the SAFE, as well as colleagues accredited to the Discipline Inspection and Supervision Team attended the conference at the main venue in Beijing. SAFE branches (administrative offices) participated in the meeting at the branch venues. Some colleagues from the Organization Department of the CPC Central Committee, Office of the Central Commission for Financial and Economic Affairs, National Audit Office also attended the conference upon invitation. (End)