The State Administration of Foreign Exchange (SAFE) has recently held the Branch Directors Seminar 2016 in Beijing to implement the plans of the CPC Central Committee and the State Council, and study and analyze domestic and foreign economic and financial conditions as well as China's foreign exchange situation, with focus on training and discussions on the priorities of foreign exchange administration. Pan Gongsheng, administrator and secretary of the Party Leadership Group of the SAFE, delivered a special lecture to an audience of deputy administrators, and heads of SAFE branches (foreign exchange administrative departments) and SAFE organizations.

Pan pointed out that in face of the complex economic and financial conditions both at home and abroad since the beginning of 2016, foreign exchange authorities, under the leadership of the CPC Central Committee and the State Council, and the guidance of the CPC Committee of the People's Bank of China (PBC), have been committed to tackling tough problems of reform head on, such as pushing forward administration streamlining and power delegation, reforming foreign exchange administration for QFIIs, refining policies for foreign exchange settlement under the capital account, cooperating with the PBC to roll out nationwide the macro-prudential management policy for full-scale cross-border financing, and boosting the opening up of the inter-bank bonds market. On the other hand, foreign exchange authorities have focused on intensifying risk prevention and control, enhancing authenticity and compliance management, cracking down on foreign exchange irregularities, and maintaining the stability of foreign exchange markets. Further, foreign exchange authorities have strengthened the operation and management of foreign exchange reserves to ensure security, liquidity, value maintenance and growth.

Pan stressed that the current foreign exchange situation should be objectively assessed and accurately understood. Since the beginning of this year, China's economy has run stably, featuring a basic equilibrium between supply and demand in foreign exchange markets and much lower pressure from cross-border capital outflows. Despite the complex economic environment and many uncertainties worldwide, China's economy has stayed stable. The transformation of the growth model and structural adjustments have been stably pushed forward, the quality of economic growth has been improved, the surplus in the current account has been sustained, and foreign exchange reserves have been sufficient, indicating that China is highly attractive to long-term capital. In the future, China's cross-border capital flows are expected to remain stable.

According to Pan, officials of foreign exchange authorities should follow the gist of President Xi Jinping's speech at the meeting to celebrate the 95 anniversary of CPC, and plans of the CPC Central Committee, the State Council and the PBC to deliver a good performance in the subsequent work of foreign exchange administration, with focus on pushing forward the capital account convertibility, boosting the development of foreign exchange markets and guarding against risks arising from cross-border capital flows, for the purpose of serving the real economy and enhancing the efficiency of foreign exchange resource allocation. First, foreign exchange authorities shall press ahead with foreign exchange administration reform in key areas, accelerate the development of foreign exchange markets, push forward the capital account convertibility, and ensure good communication with markets, so as to further promote trade and investment facilitation. Second, foreign exchange authorities shall intensify cross-border capital monitoring and early warning, support banks to refine the self-discipline mechanism and conduct authenticity and compliance reviews, and continue to maintain a tough stance on foreign exchange irregularities like underground banks to safeguard China's economic and financial security. Third, foreign exchange authorities shall optimize the operation and management of foreign exchange reserves to make use of the role of foreign exchange reserves in safeguarding the balance of payments. Fourth, foreign exchange authorities shall organize training and education programs for officials to learn Party rules and regulations and the gist of President Xi Jinping's speeches as well as growing into a qualified Party member, so as to implement the requirements on comprehensively strengthening Party discipline.

In addition, discussions were held on current foreign exchange situation and experts and scholars were invited to give lectures at the Seminar.