On the morning of August 2, the State Administration of Foreign Exchange (SAFE) held a video conferencing for the second half of 2018. The purposes of this meeting were to study and implement the arrangements of the CPC Central Committee and the State Council for the economic and financial undertakings, summarize the work of the first half, analyze the economic and financial environments both at home and abroad and the conditions of the foreign exchange market, and study and make arrangements for key tasks of foreign exchange administration for the second half. Pan Gongsheng, secretary of the CPC Leadership and administrator of the SAFE, delivered a work report.

The meeting believed that in the year to date, foreign exchange authorities have studied, promoted and implemented Xi Jinping thought on socialism with Chinese characteristics for a new era and the spirit of the 19th CPC National Congress. Under the leadership of the CPC Central Committee and the State Council and the guidance of the People's Bank of China, they have implemented the requirements on Party self-governance, the general work guideline of making progress while maintaining stability, the new development philosophy and the requirements on high-quality development. With a focus on the supply-side structural reform, they have been committed to serving the development of the real economy, deepening the reform and opening up of foreign exchange administration, and guarding against risks associated with cross-border capital flows, successfully defending the economic and financial security of China. First, with political development as the top priority, foreign exchange authorities have remained committed to ensuring the "two safeguards" and stricter exercise of Party self-governance. Following the earnest intraparty political norm, they have implemented the system for collective activities within the Party. They have performed their principal responsibilities and ensured successful retrospective self-check of rectifications. With a focus on Party discipline, they have intensified management of Party officials and intensified the accountability for supervision and discipline enforcement. They have implemented the CPC Central Committee's eight-point decision on improving Party and government conduct, working ceaselessly to improve Party conduct and enforce Party discipline. Second, they have deepened the reform of delegation, regulation and service, with the levels of trade and investment liberalization and facilitation raised. They have devoted themselves to boosting the two-way opening up of the financial sector, and systematically advancing the capital account convertibility. To support the Belt and Road Initiative, they have promoted regional opening up and innovation to strengthen the roles of foreign exchange administration in serving the real economy. Third, they have been committed to guarding against risks arising from cross-border capital flows, and cracking down on violations of foreign exchange laws and regulations to safeguard the health and good order of the foreign exchange market. Fourth, they have intensified the building of operation and management capabilities of foreign exchange reserves, and continued to optimize asset arrangements to further diversify the utilization.

The meeting pointed out that China's economy stayed stable and gathered momentum in the first half. The cross-border capital flows were steady, the supply and demand found a basic equilibrium in the foreign exchange market, and the receipts and payments under the current account remained reasonable, contributing to a stronger balance between the internal and external economies. Despite tremendous changes in the external environment, China's economy has achieved more resilient and higher-quality growth as the supply-side structural reform is advanced and economic restructuring is optimized. With an overall equilibrium in the balance of payments, adequate foreign exchange reserves, extensive experience and sufficient policy tools, we are confident about the stable operation of the foreign exchange market.

The meeting stressed that, in the second half, foreign exchange authorities need to continue studying, promoting and implementing Xi Jinping thought on socialism with Chinese characteristics for a new era and the spirit of the 19th CPC National Congress. With thoroughly studying, fully understanding and effectively implementing the thought and the spirit as their top priority, they should maintain political integrity, think in terms of the big picture, follow the leadership core, and keep in alignment with the central Party leadership and have full confidence in the path, theory, system, and culture of socialism with Chinese characteristics, so as to make sure that they become highly aligned with the CPC Central Committee with Comrade Xi Jinping at its core in thoughts, politics and action. Following the strategic arrangements laid out at the 19th CPC National Congress, they should adhere to the general work guideline of making progress while maintaining stability, advance the supply-side structural reform, boost the two-way opening up of the financial market and ensure three breakthroughs, in a bid to promote the stability and health of China's economic growth.

According to the meeting, focus should be on the following in the second half: first, with political development as the top priority, foreign exchange authorities should endeavor to ensure the leadership of the Party in foreign exchange administration. Following the political discipline and rules of the Party, they should be committed to developing the active and healthy political culture within the Party. They should conduct four forms of oversight over discipline compliance and consolidate and build on the advances made in implementing CPC Central Committee's eight-point decision on improving Party and government conduct. They should cultivate professional and high-quality officials teams who are loyal to the Party, have moral integrity, and demonstrate a keen sense of responsibility, for foreign exchange administration, so as to forever preserve their political characteristics. Second, they should deepen the foreign exchange administration reforms, and open the foreign exchange market wider to make new ground in pursuing opening-up on all fronts. They should systematically ensure the RMB capital account convertibility to guarantee the legal rights and interests of foreign investments. They should diversify the products and trading tools, increase the number of domestic and foreign participants to build an open and competitive foreign exchange market. While enhancing trade and investment liberalization and facilitation, they should support the development of new formats and models of trade and ensure sound foreign exchange administration services for the first China International Import Expo. To support the Belt and Road Initiative, they should advance the pilot programs for the reform and opening up of foreign exchange administration such as free trade zones and free trade ports. Third, they should adopt a multipronged approach to guarding against and addressing significant risks associated with foreign exchange. While establishing and improving the management framework of "macro-prudence + micro-regulation" for cross-border capital flows, they should crack down on false and fraudulent transactions, underground banks, and illegal foreign exchange trading platforms and other violations of foreign exchange laws to safeguard the sound order in the foreign exchange market and the country's economic and financial security. Fourth, they should work to ensure the security, liquidity, value growth and maintenance of foreign exchange reserves to serve government strategies.

The meeting called on officials and staff of foreign exchange authorities to get united around the CPC Central Committee with President Xi Jinping at its core and follow the guidance of Xi Jinping thought on socialism with Chinese characteristics for a new era, and to bear the weight of responsibility and work diligently to make notable achievements in foreign exchange administration, and to effectively implement the decisions and arrangements of the CPC Central Committee and the State Council to deliver a good result for the upcoming 40th anniversary of reform and opening up.

Members of the CPC Leadership, chief accountants, chief economists and heads of departments and units of the SAFE attended the meeting at the main venue, while members of the leaderships and department heads of SAFE branches (foreign exchange administrative departments), and heads of central sub-branches were present at local venues.