State Administration of Foreign Exchange: Encourage Shanghai to explore a foreign exchange management model of "more honesty, more convenience"
On June 19, at the 2024 Lujiazui Forum, Zhu Hexin, Deputy Governor of the People's Bank of China and Director of the State Administration of Foreign Exchange, stated that with greater determination and strength, they will unswervingly promote high-level financial opening-up, actively connect with high-standard international economic and trade rules, increase institutional opening-up, and support Shanghai's international financial center to move to a higher level. He also hopes that Shanghai's exploration can accumulate more experience for the overall situation.
First, we will improve the quality of capital account opening and create a good environment for attracting more foreign financial institutions and long-term capital to develop and prosper in China. We will accelerate the interconnection of financial markets and facilitate foreign investors to participate in domestic securities investment. We are currently revising relevant fund management regulations, further simplifying and improving the fund management of qualified foreign institutional investors, and supporting the growth of patient capital; we will support domestic institutions to carry out cross-border investment. Recently, the State Administration of Foreign Exchange has issued a total of US$2.27 billion in quotas to 53 qualified domestic institutional investors, focusing on meeting the reasonable needs of residents for overseas investment. We will learn from the experience of international treasury centers, study and improve the policy of integrated domestic and foreign currency fund pools, and support multinational companies to establish global or regional fund management centers in Shanghai. Based on the construction of a global asset management center, we will promote the standardized development of cross-border investment business of equity investment funds, support the China Foreign Exchange Trading Center to strengthen the functions of financial infrastructure and external service capabilities, and support Shanghai to build an international financial asset trading platform at a high level.
Second, we will improve the quality and level of trade and investment cooperation and strengthen financial support for the construction of Shanghai's "five centers". We will strengthen foreign exchange services around the "five major articles" of finance, promote foreign exchange facilitation for cross-border trade and investment, enhance the convenience and satisfaction of business entities in obtaining foreign exchange services, and better support the coordinated construction of Shanghai as an international economic center, an international shipping center, and an international trade center. We will expand cross-border financing for science and technology enterprises, better serve the entry and exit of cross-border capital into and out of the entire life cycle of science and technology enterprises, and support Shanghai in building a science and technology innovation center with global influence.
Third, give full play to Shanghai's leading role and promote high-level coordinated opening up in a larger region. Shanghai is encouraged to explore a "more honest, more convenient" foreign exchange management model based on the high-level pilot of cross-border trade and investment, the reform of foreign exchange business of banks and the exemption of due diligence. Shanghai's high-level opening-up policies will be replicated and promoted to the Yangtze River Delta and even the whole country in an orderly manner, supporting the integrated development of the Yangtze River Delta to achieve greater breakthroughs and create new advantages of a higher level of open economy.
Fourth, we will coordinate financial openness and security to ensure the continuity and sustainability of Shanghai's financial resource aggregation and radiation. We will enhance open supervision and risk prevention and control capabilities, strengthen the two-in-one management of "macro-prudential and micro-regulation" in the foreign exchange market, participate deeply in international financial coordination and cooperation and global financial governance, prevent cross-regional, cross-market, and cross-border transmission of risks, and promote the benign interaction between high-quality development and high-level security.
