The National Foreign Exchange Administration Working Conference was held in Beijing recently. Based on the guiding principles of the Party's 19th National Congress, the second, third and fourth plenary sessions of its 19th Central Committee and the Central Economic Working Conference, the work done in foreign exchange administration for 2019 was reviewed, the current situation of foreign exchange markets was analyzed, and the tasks in foreign exchange administration for 2020 were studied and arranged. Pan Gongsheng, Secretary of the CPC Leadership and Administrator of the State Administration of Foreign Exchange (SAFE) delivered a report on foreign exchange administration.

The meeting pointed out that, in the face of increasing risks and challenges in and outside China in 2019, foreign exchange authorities, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and following the decisions and arrangements of the CPC Central Committee and the State Council, the unified leadership and deployment of Financial Stability and Development Committee and the instructions of the Party Committee of the People's Bank of China (PBC), deepened foreign exchange reform and opening up, supported the growth of the real economy, guarded against risks arising from cross-border capital flows, ensured the basic equilibrium of the balance of payments and safeguarded the national economic and financial security. First, upholding the Party's political work, we were committed to strengthening Party building. Based on Secretary General Xi Jinping's instructions and requirements, and the decisions and arrangements of the CPC Central Committee and the State Council, we held activities about keeping in mind our Party's founding mission, kept up efforts to clean up undesirable work styles and tightened discipline to build professional teams of high-quality officials. Second, we deepened reform and opening up in foreign exchange administration, pushed forward with reforms that delegate power, improve regulation, and upgrade services to serve the high-quality growth of the real economy. Approved by the State Council executive meeting, we launched 12 initiatives for foreign trade and investment facilitation. We provided support for the development of new trade formats, and trading and investing activities along the Belt and Road route. We boosted the liberalization of the capital account, removed the investment quota restrictions on qualified foreign investors, facilitated investments in China's interbank bond markets by foreign institutional investors, carried out a pilot program on foreign exchange settlements and sales by securities companies. We also launched the cross-border financial blockchain service platform. Third, we guarded against risks associated with cross-border capital flows and effectively ensured the stability of foreign exchange markets. Following the macro-prudential administration policy, we adjusted cross-border capital flows against business cycles and based on market changes, and cracked down on underground banks and other violations. Fourth, we improved the operations and management of foreign exchange reserves, enabling steady rise of such reserves. Despite the complex circumstances, we successfully ensured the security and flows of foreign exchange reserve assets and the preservation and growth of their value.

The meeting stressed that the year 2020 is the last year for building a moderately prosperous society in all respects and of the 13th Five-year Plan period. Foreign exchange authorities, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, should implement the guiding principles of the Party's 19th National Congress and the second, third and fourth plenary sessions of its 19th Central Committee, and the decisions and arrangements of the Central Economic Working Conference. We should further understand the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment. We should strengthen their confidence in the path, theory, system, and culture of socialism with Chinese characteristics. We should resolutely uphold General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely uphold the Party Central Committee's authority and its centralized, unified leadership. Adhering to the goal of building a moderately prosperous society in all respects and following the requirements of "Four Cardinal Principles" and "Six Stabilities", we need to improve the foreign exchange administration systems and mechanisms that meet the requirements for state governance capability modernization, converting the systemic advantages from the Party's leadership in economic tasks into governance effectiveness, so as to strive for the victory of building a moderately prosperous society in all respects and of the 13th Five-year Plan.

The meeting also identified the priorities of foreign exchange administration in 2020. First, we will further exercise full and rigorous self-discipline among Party members and embed the Party's leadership in all aspects and stages of foreign exchange administration. Putting the Party's political work first, we will deepen knowledge by innovating theories, implement the decisions and arrangements of the CPC Central Committee and the State Council, solidify the impact of themed education programs and build professional teams of high-quality officials with loyalty, integrity and a strong sense of responsibility. By performing the "Two Responsibilities", we will build ourselves into role model organs that the CPC Central Committee find trustworthy and the general public are satisfied with. Second, we will adapt to the requirements of state governance capability modernization, and refine the two-pronged administration framework of "macro prudence + micro monitoring" for foreign exchange markets to ensure the balance of payments will be in basic equilibrium. Macro prudence is intended to maintain stability in foreign exchange markets and prevent systematic financial risks. Micro monitoring is to ensure orderly foreign exchange markets by focusing on authenticity verification, behavioral monitoring and micro-prudential regulation of players and their behaviors in foreign exchange markets. Third, we will deepen foreign exchange reform and opening up to serve the new patterns of opening up on all fronts. We will implement the 12 facilitation initiatives adopted by the State Council executive meeting. We will push forward with the liberalization of the capital account, and support connectivity and two-way opening up in the financial market to boost liberalization, facilitation and high-quality growth of trade and investment. We will underpin the development of new trade formats, propelling the construction of the cross-border financial blockchain service platform. We will press ahead with reforms that delegate power, improve regulation, and upgrade services, and support pilot reforms of foreign exchange administration, such as pilot free trade zones, Hainan free trade port, and the Guangdong-Hong Kong-Macao Greater Bay Area, to build open and competitive foreign exchange markets. Fourth, we will fend off external shocks and risks to ensure economic and financial security in China. We will deep dive on the impacts of external shocks on China's trade and investment, balance of payments structure, and cross-border capital flows and enrich the policy toolkits. We will spread the financial neutrality concept to enterprises. We will refine the laws and regulations for foreign exchange wholesale markets, building and improving off-site regulation and on-site inspection mechanisms for the wholesales markets. We will crack down on violations in foreign exchange markets to ensure the consistency, stability and foreseeableness of enforcement standards across business cycles, and maintain orderly foreign exchange markets. We will also advance the construction of digital and secure platforms for foreign exchange administration. Fifth, we will intensify the operations and management of foreign exchange reserves for further modernization. We will prudently boost diversified use of foreign exchange reserves to serve the high-quality development of the Belt and Road and ensure the security and flows of foreign exchange reserve assets and the preservation and growth of their value.

Attendees include members of the Party Leadership, chief accountant and chief economist of the SAFE, as well as leaders of the branches (foreign exchange administrative departments), departments and units of the SAFE.