Revised Foreign Exchange Regulations Promulgated Recently

Beijing, August, 6, Premier Wen Jiabao of the State Council has signed the Decree No. 532nd of the State Council recently, and promulgated the revised regulations on foreign exchange control of People's Republic of China.

The Ordinance consists of 8 chapters and 54 articles.

The enacted regulations are aimed at strengthening foreign exchange management, promoting balance of payments and promoting healthy development of the national economy.

The revision of the regulations follows the following principles: first, adhere to the direction of reform and opening up and absorb the achievements of reform in current account, capital account, foreign exchange market and RMB exchange rate formation mechanism in recent years, and reserve policy space for the next reform.

Two, we must focus on the key points of macroeconomic regulation and control, and aim at promoting the balance of international payments, so as to achieve balanced and standardized management of inflow and outflow of foreign exchange funds.

The three is to create a fair competition environment, to abolish the differential treatment between domestic and foreign enterprises, between state-owned enterprises and private enterprises, between institutions and individuals, and to supervise them according to the nature of pactions.

Four, we should further improve the contents and methods of foreign exchange management according to the reform of administrative management system and administration according to law, promote trade and investment facilitation, and strengthen supervision and restraint on administrative power.

The new Ordinance has made a comprehensive revision of the original Ordinance.

The revised regulations have further facilitated trade and investment activities, improved the RMB exchange rate formation mechanism and financial institutions' foreign exchange business management system, established the international payment balance emergency protection system, strengthened the monitoring of cross-border capital flows, improved the means and measures of foreign exchange supervision, and correspondingly defined the relevant legal responsibilities.

The revised regulations on foreign exchange control of the People's Republic of China shall come into force on the date of promulgation.