The year 1996 marked a pivotal moment in China's financial opening-up when the Renminbi achieved current account convertibility. Over the past three decades, China has steadily refined its current account foreign exchange administration, with transaction volumes surging from $300 billion to surpass $8 trillion, making a substantial contribution to the global open economy.

At a State Council Information Office press conference on the afternoon of September 10, Mr. Li Bin, Deputy Administrator of the State Administration of Foreign Exchange (SAFE), delivered a comprehensive review of three decades of achievements in the foreign exchange sector. He also outlined the reform blueprint for the upcoming phase, taking into account the evolving international economic, trade, and financial landscape. Li Bin announced plans to establish a foreign exchange management system that is "more convenient, more open, safer, and smarter," aiming to elevate financial powerhouse construction and high-level opening-up to new heights.

A New Structure for Foreign Exchange Management

In 2025, China's cross-border receipts and payments and foreign exchange market turnover reached $15.6 trillion and $42.6 trillion, respectively, marking increases of 80% and 42% compared to 2020. This demonstrates the growing resilience and vitality of the forex market, with foreign exchange reserves firmly holding the world's top position. The "15th Five-Year Plan" period is set to bring a systemic upgrade to foreign exchange management, characterized by: Enhanced Convenience — the core goal is to make forex transactions more efficient and straightforward for compliant and credible business entities. Li Bin stated that a major push will be made to reform bank forex business procedures, establishing a policy framework where "greater integrity leads to greater convenience and rule-compliant entities are prioritized." Businesses with excellent credit records can process transactions directly based on instructions, exempt from document review. Furthermore, more targeted support policies will be explored for key areas such as the "five key articles" of finance, new trade formats, and multinational companies. Policy coordination between domestic and foreign currencies will be strengthened to standardize procedures for similar business types.

Greater Openness — the aim is to broaden the scope and raise the standard of opening-up in the forex sector. According to Li Bin, reforms will be continuously advanced in direct investment, securities investment, and cross-border financing. The focus will be on enhancing institutional stability and predictability, supporting the development of international financial centers and key regional opening-up initiatives, and improving the level of capital account openness to better align with the development of foreign-related economy and the internationalization of the Renminbi. Stronger Security — the "macro-prudential + micro-supervision" integrated management framework will be refined. Macro-prudential tools will be used to prevent systemic risks from major cross-border capital flow fluctuations, while strict measures will continue against illegal activities like fraudulent trade and underground banks. Routine management of foreign exchange reserves will be optimized to ensure their safety, liquidity, and value preservation.

International Balance of Payments Expected to Remain Largely Balanced

Li Bin indicated that during the "15th Five-Year Plan" period, China's cross-border investment and financing are expected to remain active. The opening of financial markets will proceed in an orderly manner, with the scale of external assets and liabilities projected to increase further and their structure to improve. Currently, the global current account deficit is widening and is highly concentrated in certain countries, while surplus countries are shifting with changes in the industrial division of labor. China's current account surplus is utilized globally through outward industrial and financial investments, contributing to the overall balance of payments. Going forward, the development of export and import trade will be better coordinated, and both outward investment and inbound investment are expected to expand, with the balance of payments expected to maintain a basic equilibrium. Li Bin underscored the importance of balancing development and security, continuing to facilitate cross-border trade and investment, and enhancing the momentum of foreign-related economic growth. He also emphasized strengthening macro-prudential management and monitoring for cross-border capital flows to prudently handle external shocks.

Enhancing Capital Account Openness

The results of current account facilitation reforms have been increasingly evident. By the end of July this year, over 50,000 high-quality enterprises nationwide were benefiting from foreign exchange facilitation policies for cross-border trade. In response to new business models like cross-border e-commerce, SAFE has supported banks in processing settlements in bulk based on electronic transaction information. From January to July this year, over 730 million cross-border e-commerce forex transactions were processed automatically in bulk, serving more than 1.9 million small and medium-sized merchants. On the capital account front, direct investment has achieved basic convertibility. Cross-border securities investment operates under an institutional framework that includes institutional investor schemes, mutual market access mechanisms, and direct market entry for foreign investors, while cross-border financing is managed under a comprehensive macro-prudential framework. Li Bin stated that capital account opening will be deepened from four aspects: moving from channel-based to institutional opening, from business convenience to entity convenience, from forex-only management to domestic-foreign currency coordination, and from the exchange settlement stage to whole-chain management services. Specifically: for direct investment, the registration process for foreign direct investment will be simplified and the negative list for fund usage will be shortened to promote coordinated "bringing in" and "going global", with new facilitation measures expected to be rolled out soon. For cross-border financing, the level of autonomy and convenience will be steadily raised, building a macro-prudential management framework with clear rules and ease of operation. Policies for science and technology enterprises' cross-border financing will be expanded, trials for green foreign debt facilitation will be broadened, and the integrated domestic-foreign currency cash pool policy for multinationals will be upgraded. For cross-border securities, the openness of the securities issuance market will be enhanced, trading market opening rules will be aligned with international standards, and efforts will be made to integrate channels, optimize systems, and unify rules to raise the level of two-way opening in financial markets.