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Development of China's Financial Supervision and Regulation pp 153–188Cite as

Palgrave Macmillan

Annual Report on Foreign Exchange Administration

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Abstract

This chapter outlines the main activities of China’s foreign exchange administration since 2011. Based on recent reforms, it focuses on the five main aspects of administrative activity relating to foreign exchange in 2014:capital accounts liberalization reform; FX market reform; reforms aiming at building “One Belt, One Road”; optimization of the macroprudential framework of foreign debt; and cross-border capital flow management. The chapter concludes that in order to prevent foreign exchange and balance-of-payment risk, China’s foreign exchange administration will focus on how to implement its authority in accordance with the law, how to support the new national “One Belt, One Road” strategy, and how to stick to the principle that the market should play a decisive role in resource allocation.

Liu Tang, a PhD in Economics, is an Associate Researcher, and visiting scholar at Harvard University, and is now working at the International Finance and International Economics Laboratory of the CASS Institute of Finance and Banking. Her areas of interest include international financial regulation and international economics.

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Notes

  1. 1.

    State Administration of Foreign Exchange, http://www.safe.gov.cn.

  2. 2.

    Data from CEIC.

  3. 3.

    Quoted from the SAFE’s news release on September 25, State Administration of Foreign Exchange, http://www.safe.gov.cn.

  4. 4.

    State Administration of Foreign Exchange, http://www.safe.gov.cn.

  5. 5.

    Research Group of PBC Statistics and Analysis Department: Conditions to Quicken Capital Account Opening up in China are Basically Mature, China Finance, 2012 (5).

  6. 6.

    Li, Xiangyang. “RMB Internationalization: from the Perspective of Capital Account Opening up.” Studies of International Finance, 2014 (5): 10–15.

  7. 7.

    Li, Chao. “Transition of IMF Capital Flow Management Framework and its Revelation.” International Economic Review, 2013 (5): 9–20.

  8. 8.

    Ma, Jun. “RMB Offshore Market and Capital Account Opening up. ” International Economic Review, 2012 (4): 1–10.

  9. 9.

    Yu, Yongding. “Seeking for Consensus on Capital Account Opening Up.” Studies of International Finance, 2014 (7): 3–6.

  10. 10.

    Lin, Yifu. “Why Don’t I Support Capital Account Opening Up?” Keynote speech on CF 40 Forum Biweekly Round Table Seminar.

  11. 11.

    See Wu Jinglian’s speech on the “Fifth Caixin Summit.” Nanfang Daily, December 23, 2014.

  12. 12.

    See Li Yang’s speech of “China under the New Normal State of Economic Development” on the 2014 Annual Meeting of Economic Strategy of the CASS National Academy of Economic Strategy, quoted from Chinanews.com.

  13. 13.

    See Chen Yulu’s interview with media concerning 2014 Report on RMB Internationalization, July 20, 2014, quoted from China Finance Information Network.

  14. 14.

    State Administration of Foreign Exchange, http://www.safe.gov.cn.

  15. 15.

    See China’s Balance of Payments Report for the first half of 2014.

  16. 16.

    Zhang, Chenqu. “Foreign Exchange Market Ushers in Non-Banking Retail Investors.” Innovative Finance Observation, December 22, 2014.

  17. 17.

    State Administration of Foreign Exchange, http://www.safe.gov.cn.

  18. 18.

    Zhao, Jing. “2015: Essential Progress of “One Belt and One Road.” Economic Information Daily, January 5, 2015.

  19. 19.

    Quoted from the PBC’s 2014 fourth-quarter money policy report.

  20. 20.

    Yao, Zhizhong et al. “Developing Trend and Policy Outlook of China’s Overseas Direct Investment.” International Economic Review, Issue 2, 2011.

  21. 21.

    Wang, Yang. 2013. Building New System for Opening Economy, printed in Counseling Book for the CPC Central Committee’s Decision of Several Issues concerning Comprehensively Deepening Reform. Beijing: People’s Publishing House.

  22. 22.

    Li, Chao. “China’s Foreign Debt Management Issues.” Journal of Financial Research, Issue 4, 2014.

  23. 23.

    See the website of HKMA.

  24. 24.

    Zhou, Xiaochuan. “Outlook and Route of RMB Capital Account Convertibility.” Journal of Financial Studies, Issue 1, 2012.

  25. 25.

    Zhang, Xin. “Exploring Classified, Progressive and Manageable Capital Account Convertibility.” China Finance, Issue 11, 2014.

  26. 26.

    Yi, Gang. “Reform Foreign Exchange Administration: An Important and Urgent Task.” Qiu Shi, Issue 1, 2014.

  27. 27.

    Quoted from the SAFE’s 2013 Report of International Balance of Payment.

  28. 28.

    Guan, Tao et al. “Federal Reserve’s Quit of Quantitative Easing Monetary Policy and Financial Stability.” International Economic Review, Issue 6, 2014.

  29. 29.

    Fan, Limeng et al. Tobin Tax, “Focus of Controversy and Comment.” Economic Perspectives, 2012 (8).

  30. 30.

    Li, Chao. “Transition of IMF Capital Flow Management Framework and Its Revelation.” International Economic Review, Issue 5, 2013.

  31. 31.

    Benes et al. “The Ying and Yang of Capital Flow Management: Balancing Capital Inflows with Capital Outflows [R].” World Economic Outlook, 2013 (10).

  32. 32.

    Boucekkine et al. “On the Timing and Optimality of Capital Controls: Public Expenditures, Debt Dynamics and Welfare.” International Journal of Economic Theory, 2013 (9).

  33. 33.

    See Li Yang’s speech of “China under the New Normal State of Economic Development” on the 2014 Annual Meeting of Economic Strategy of the CASS National Academy of Economic Strategy.

  34. 34.

    Quoted from the Decision of the CPC Central Committee on Several Important Issues concerning Comprehensively Promoting Rule by Law.

  35. 35.

    Quoted from State Administration of Foreign Exchange, http://www.safe.gov.cn.

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Author information

Authors and Affiliations

  1. Institute of Finance and Banking, Chinese Academy of Social Science, Beijing, China

    Liu Tang

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  1. Liu Tang
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Editor information

Editors and Affiliations

  1. Chinese Academy of Social Sciences, Beijing, China

    Bin Hu

  2. Chinese Academy of Social Sciences, Beijing, China

    Zhentao Yin

  3. Chinese Academy of Social Sciences, Beijing, China

    Liansheng Zheng

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© 2016 The Editor(s) (if applicable) and The Author(s)

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Tang, L. (2016). Annual Report on Foreign Exchange Administration. In: Hu, B., Yin, Z., Zheng, L. (eds) Development of China's Financial Supervision and Regulation. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-52225-2_5

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  • DOI: https://doi.org/10.1057/978-1-137-52225-2_5

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