On August 17, the State Administration of Foreign Exchange (SAFE) held the 2017 seminar with banks and financial companies in Beijing to implement the gist of the National Financial Work Conference, analyze the current state of foreign exchange markets, and announce recent foreign exchange irregularities among banks. Pan Gongsheng, secretary of the CPC Leadership and administrator of the SAFE, delivered a speech and Yang Guozhong, deputy administrator of the SAFE, chaired the meeting, with attendees including heads of the bodies of the SAFE, policy banks, state-owned commercial banks, joint-stock commercial banks and a selection of urban commercial banks as well as financial companies.

The participants in the meeting unanimously agreed that the National Financial Work Conference is a significant meeting in the run-up to the 19th CPC National Congress, and shows that the CPC Central Committee attaches great importance to financial work. In his speech, Secretary-general Xi Jinping took a holistic view to analyze the current financial conditions based on the laws of financial development, and describe the guidelines, principles and priorities of financial work under the new normal of economic development. He also gave a full account of how to enhance the efficiency and level of finance serving the real economy, proactively prevent and address systematic financial risks, be determined to deepen the financial reform and expand the liberalization of finance, and strengthen and improve the leadership of the Party in financial affairs. This speech is a key reference and guideline for how to ensure financial work, and promote benign circulation and healthy development of the economy and finance under the new circumstances. The meeting required that efforts should be made to study and implement the decisions and plans of the CPC Central Committee with Comrade Xi Jinping at its core on financial work, strengthen the consciousness of the need to maintain political integrity, think in big-picture terms, uphold the leadership core, and keep in alignment, and integrate the thoughts into the judgment of the CPC Central Committee on financial conditions. The policies and guidelines formulated by the CPC Central Committee shall be unswervingly implemented, and three tasks, namely, serving the real economy, prevention and control of financial risks and deepening the financial reform, shall be carried out, so as to create a favorable environment for the 19th CPC National Congress.

According to Pan Gongsheng, China's economy has developed steadily with a more remarkable momentum for growth and market expectations have been further stabilized since the beginning of this year, boosting the strong recovery of China's foreign exchange markets, and the stability of China's cross-border capital flows. As the 19th CPC National Congress draws near, which is to be convened in the second half of this year, foreign exchange authorities will focus on serving the real economy and China's reform and opening up to further enhance cross-border trade and investment facilitation amid its efforts to serve the real economy, prevent and control financial risks and deepen the financial reform. They will also be committed to guarding against cross-border capital flow risks and safeguarding the stability of foreign exchange markets, in a bid to create a healthy, benign and stable market environment for the reform and opening up. The policy for foreign exchange administration will be focused on: first, upholding reform and opening up and refining the foreign exchange policy framework; second, boosting capital account convertibility prudentially and systematically; third, establishing a system for macro-prudential administration of cross-border capital flows and for micro market regulation; fourth, improving the RMB exchange rate formation mechanism to enhance the elasticity of the exchange rate.

Pan Gongsheng stressed that, banks and financial companies, the first-line service windows for foreign exchange business and a bond for the conduction mechanism of foreign exchange policy, are crucial to sustaining the healthy development of foreign exchange markets. They are required to enhance the efficiency and level of their endeavor to serve the real economy in all respects, make the most of their roles in the allocation of foreign exchange resources, serve and support the country's opening-up strategy, and facilitate market participants' use of both domestic and foreign markets to satisfy customers' reasonable requirements for trade and investment. By following the foreign exchange administration policies, they shall refine the self-discipline mechanism for foreign exchange markets, implement the operation requirements of foreign exchange business and rationally guide market expectations. They shall also raise their awareness of internal controls, with a focus on strengthening the education on the code of internal professional ethics and on laws and regulations, intensifying management of foreign exchange workforce, performing the responsibilities for authenticity and compliance review, and work with regulators to crack down on and contain foreign exchange irregularities, in an attempt to maintain the equilibrium of the balance of payments and boost the benign circulation and healthy development of the economy and finance.

Representatives of banks and financial companies present said they would work hard and be responsible to better serve the real economy, and maintain the health and stability of foreign exchange markets and the country's economic and financial security to embrace the 19th CPC National Congress with remarkable accomplishments.

Following the gist of the National Financial Work Conference, Administrator Pan Gongsheng comprehensively analyzed the trends of foreign exchange markets at present and in the near future, especially the policy orientation of foreign exchange administration, namely, two directions and four connotations with a focus on foreign exchange issues in eight aspects that banks and financial companies shall pay attention to, and raised requirements on relevant tasks. With a clear orientation and specific requirements, Pan's speech shall be carefully studied and implemented. In particular, operation shall be standardized to effectively communicate foreign exchange administration policies and rationally guide market expectations. Banks and financial companies shall also work hard and discharge their responsibilities to maintain the health and stability of foreign exchange markets and China's economic and financial security, so as to be poised for the upcoming 19th CPC National Congress with significant achievements.