Recently, the People's Bank of China, the State Administration for Financial Regulation, the State Administration of Foreign Exchange, and the Shanghai Municipal People's Government jointly issued the "Action Plan for Further Improving the Facilitation of Cross-border Financial Services" (hereinafter referred to as the "Action Plan"). In order to facilitate the outside world to better understand the policy measures of the Action Plan, on April 23, the People's Bank of China held a press conference to "key points" the Action Plan.

Lu Lei, deputy governor of the People's Bank of China, said that the Action Plan has two core points: one is to highlight the construction of Shanghai's international financial center, and the other is to focus on improving the facilitation of cross-border financial services. At present, the construction of Shanghai's international financial center has made steady progress and achieved remarkable results, especially in the field of cross-border financial services, forming a number of replicable and popularizable "Shanghai experience".

In 2024, the total cross-border RMB collection and payment in Shanghai reached 29.8 trillion yuan, a year-on-year increase of 30%, accounting for 47% of the total national business volume. The Action Plan launches a series of financial support policies to form a strong support system that empowers enterprises to "go global", which is conducive to improving the internationalization level of Shanghai's international financial center, continuously enhancing the competitiveness and influence of Shanghai's international financial center, and better serving the construction of a financial power.

Five major financial measures to better serve enterprises to "go global"

Against the backdrop of profound changes in the current external environment, it is more important to improve the facilitation of cross-border financial services.

Lu Lei said that the world's century-long changes have accelerated, and the external environment has become more complex and severe. The world economic growth momentum is insufficient, unilateralism and protectionism are intensified, the multilateral trading system is blocked, and tariff barriers are increasing, which has impacted the stability of the global industrial chain and supply chain and hindered the international economic cycle. In order to better respond to market competition and external challenges, foreign investment of my country's enterprises has been accelerating, and has put forward higher-level and more dimensions of demand for cross-border financial services. Enterprises' foreign investment has extended from a single trade to an industrial chain layout, and the global layout of enterprises has shifted from a single market to multi-regional collaboration, requiring the financial service network to follow up simultaneously, and provide corresponding financial products and services based on different market characteristics and different financial needs.

The Action Plan is based on this point and launches a series of measures to facilitate cross-border investment and financing, which will help improve the flow efficiency of cross-border funds, reduce trade costs, and support all types of entities to "go global" to participate in international economic competition and cooperation more safely, conveniently and efficiently.

The Action Plan puts forward 18 key measures from five aspects: improving cross-border settlement efficiency, optimizing exchange rate hedging services, strengthening financing services, strengthening insurance protection, and improving comprehensive financial services.

Lu Lei concluded that the 18 key measures of the Action Plan mainly cover the following five aspects:

First, improve cross-border settlement efficiency and facilitate global fund management of enterprises, including optimizing foreign exchange business management models and business development processes, improving the global fund management system of enterprise groups, expanding the functions of free trade accounts and their application scenarios, promoting financial institutions to improve the level of digital services, and improving the functions of the RMB Cross-border Payment System (CIPS) and global network coverage.

The second is to optimize exchange rate hedging services and improve foreign exchange risk management and response capabilities in the context of global operations. Including developing diversified exchange rate hedging products and services and promoting cross-border use of the RMB.

The third is to strengthen financing services and help enterprises invest and finance globally. It includes gathering cross-border syndicated loan centers and businesses, piloting trade refinancing business through rediscount windows, expanding two-way financing channels at home and abroad, using blockchain technology to standardize the development of supply chain finance, and facilitating cross-border financing of financial leasing companies and other institutions.

Fourth, strengthen insurance protection and improve the level of risk management in the global business context. This includes increasing insurance support for export enterprises, improving the service level of export credit insurance policies, and providing high-quality reinsurance services.

Fifth, improve comprehensive financial services and enhance global allocation capabilities, including enhancing the global resource allocation function of important financial platforms, improving the facilitation of global asset management, and improving the functions of various comprehensive service platforms.

Wu Wei, executive vice mayor of Shanghai, said that in order to accelerate the implementation of policies, Shanghai will create a "going out financial service package", integrate a variety of financial products and services, and provide a comprehensive and one-stop financial solution for "going out" enterprises. The service package will provide a personalized financial product portfolio and a professional service team based on the needs and characteristics of the enterprise to ensure that the enterprise can obtain the most suitable financial services. For some key enterprises, we will also adopt "one enterprise, one policy" customized services to tailor exclusive financial support solutions for enterprises to better meet the cross-border financial service needs of enterprises.

A number of policies are first tested, presenting four highlights

Speaking of the highlights of the Action Plan compared with previous cross-border financial policies, Wang Xin, director of the Research Bureau of the People's Bank of China, said that the Action Plan is supported by business process optimization and technology empowerment, taking into account efficiency and safety, and has four highlights.

First, try a number of policies first. The Action Plan actively explores facilitation measures to provide "Shanghai experience" for replication and promotion in other regions. For example, the pilot supports cross-border trade refinancing of RMB through the rediscount window. This measure was officially launched in Shanghai in December 2024, which can help alleviate the financing difficulties of foreign trade enterprises, revitalize domestic and foreign trade assets, and encourage and guide commercial banks to further enhance their support for foreign trade enterprises.

The second is to optimize business processes. The Action Plan proposes a series of measures to optimize the process, striving to build a financial service environment for "going out" enterprises to participate in international competition and cooperation safely, conveniently and efficiently. For example, high-quality customers can be exempted from reviewing documents by transaction, and can directly handle related businesses with transaction instructions in banks; improve cross-border fund allocation of full-function fund pools in the Shanghai Free Trade Zone, encourage banks to gradually realize the automated processing of cross-border payments of funds, extend the service time for cross-border fund pools and other businesses of key enterprise groups, and realize real-time allocation of global funds. Optimize the foreign debt registration management and cross-border guarantee process, and support the pilot program of cross-border transfer of syndicated loan shares.

The third is to innovate products and services. The Action Plan carries out product innovation for multiple scenarios such as corporate financing and foreign exchange risk management. For example, we support banks to continuously increase the types of RMB foreign exchange derivatives in the domestic market, develop special guarantee products for exchange rate hedging, and provide guarantee premium subsidies by the finance department. The Action Plan also supports qualified banks to refer to international practices and explore providing non-resident merger and acquisition loan services for "going out" enterprises in the Shanghai Free Trade Zone, relaxing the loan amount to 80% of the merger and acquisition transaction price, and extending the term to 10 years.

Fourth, digital empowerment. The Action Plan will significantly optimize the business efficiency and experience of "going out" enterprises' cross-border financing, settlement, risk management and other links. For example, encouraging banks to carry out cross-border authentication and electronic identification of digital identities of individuals and enterprises will help expand the coverage of digital services in cross-border collection and payment services; supporting financial institutions to rely on the implementation of "Aviation and Trade Digital Chain" and provide auxiliary verification for chain entities to carry out trade settlement, trade financing, cross-border insurance, etc. through electronic documents on-chain storage and cross-matching.

Optimize foreign exchange business management and improve the convenient use of corporate global funds

The Action Plan also involves making key arrangements in optimizing foreign exchange business management models and facilitating the global fund management of enterprises. Chen Zhiwei, director of the Foreign Exchange Research Center of the State Administration of Foreign Exchange, said that the Action Plan has introduced a series of innovative reforms and leading opening-up measures in the field of foreign exchange, which are mainly reflected in the following four aspects:

First, in terms of improving the economic energy efficiency of the headquarters, we will focus on supporting the global fund management system of enterprise groups and propose a number of innovative fund pool measures. Specifically, it includes: optimizing the management policy of integrated domestic and foreign currency fund pools, improving the allocation of cross-border funds for the full-function fund pool of the Shanghai Free Trade Pilot Zone, supporting Pudong New Area to take the lead in formulating support policies that are conducive to the aggregation of financial centers of enterprise groups, and encouraging enterprise groups to set up fund pools in Shanghai. These policies will further meet the needs of fund collection and surplus and shortage adjustment among members of multinational corporations, and achieve convenient and efficient management and use of global funds.

Second, in promoting "going out" enterprises to explore the international market, we will focus on strengthening financing services and foreign exchange risk management capabilities. Specifically, it includes: optimizing foreign debt registration management and cross-border guarantee processes to better meet the syndicated loan needs of domestic enterprises in the process of "going out". Expand two-way financing channels at home and abroad, and support qualified banks to explore and research to provide non-resident merger and acquisition loan services for "going out" enterprises in the Shanghai Free Trade Pilot Zone. Develop diversified exchange rate hedging products and services, encourage more banks to access the "bank-enterprise foreign exchange trading service platform" to facilitate all types of enterprises to carry out foreign exchange business.

Third, in terms of improving trade and investment liberalization and facilitation, we will focus on improving the efficiency of cross-border settlement services. The new measures released this time: On the one hand, expand the functions and application scenarios of free trade accounts, and support banks that meet certain requirements to provide international settlement services for cross-border e-commerce through innovative free trade account services. On the other hand, promote financial institutions to improve their digital services. Banks are encouraged to carry out digital identity authentication and identification services, and support financial institutions to use blockchain technology and other optimization of authenticity integration.

Fourth, in terms of optimizing the foreign exchange business management model, we will focus on implementing foreign exchange business process optimization and system reconstruction. The optimization management policies that have been piloted in Shanghai include: on the one hand, grading enterprises with foreign exchange compliance risk levels and providing differentiated and convenient financial services, and encouraging banks in Shanghai to actively participate. On the other hand, establish a mechanism for reporting and commenting on due diligence exemption for foreign exchange business of pilot banks to improve the quality and efficiency of cross-border financial services.

In terms of facilitating corporate financing, Su Yun, deputy director of the Shanghai Headquarters of the People's Bank of China, said that in order to facilitate the cross-border financial communication of financial leasing companies, based on previous policies, through this "Action Plan", it is planned to further relax the policy application subjects, further broaden the scope of rent use, and facilitate the flow of foreign currency rent collected by financial leasing companies (including financial leasing companies) in China for purposes that meet the requirements. This policy is conducive to financial leasing companies to flexibly allocate quotas based on fund needs and financing conditions, avoiding idle funds and achieving efficient allocation of internal resources of the group.

In the next step, the Shanghai headquarters of the People's Bank of China will focus on science and technology finance and green finance, cooperate with the General Administration of the Headquarters to study and formulate green foreign debt policies, increase the facilitation quota for cross-border financing of technology enterprises, explore piloting the decentralization of administrative licensing business under foreign debt in special circumstances and encourage and support the implementation of the first-class and integrated exploration policies in Shanghai.

Focus on export credit insurance to protect overseas assets of Chinese-funded enterprises

Enterprises "going out" cannot be separated from the protection of export credit insurance. The Action Plan mentioned that insurance support should be strengthened for export enterprises.

In response to this, Yin Jiangao, Director of the Property Insurance Regulatory Department of the State Administration for Financial Regulation, revealed that he will mainly start from the following two aspects: on the one hand, guide export credit insurance companies to actively perform their functions and provide risk protection for corporate exports. At present, all aspects attach great importance to foreign trade. Export credit insurance companies optimize underwriting and claims services, help customers develop new overseas buyers, increase limit satisfaction rates, explore business pilot projects, and expand insurance coverage. In 2024, the national underwriting amount of export credit insurance exceeded US$1 trillion for the first time, and the growth trend of underwriting amount in the first quarter of this year was also good.

On the other hand, we guide the insurance industry to focus on the entire scenario of foreign trade and provide multi-faceted insurance protection for "going out". The insurance industry provides insurance and reinsurance support for overseas assets of "going out" enterprises to protect overseas assets of Chinese-funded enterprises. At the same time, we will guide the industry to increase the convenience of insurance, so as to facilitate cross-border business personnel to insure accident insurance and other insurances; develop overseas intellectual property infringement liability insurance, dispute legal expense insurance, director, supervisor and senior management liability insurance and other products.

Lu Lei said that the Action Plan optimizes cross-border fund management, upgrades the functions of free trade accounts, improves the efficiency of cross-border fund allocation for enterprises, reduces the international operating costs of enterprises, and vigorously supports enterprises to expand overseas markets. Through exchange rate hedging and compliance management innovation, we will improve our risk resistance capabilities, build a solid security barrier for transnational operations, and escort the global layout of enterprises. In addition, it is also conducive to promoting the internationalization of the RMB, and further expanding the use of the RMB in cross-border trade and investment by improving the convenience of cross-border use and collection and payment efficiency, strengthening the promotion of the concept of "local currency first" and the publicity of cross-border RMB policies.

"Special statement: The content of the above works (including videos, pictures or audio) is uploaded and published by users of the "Dafenghao" self-media platform under Phoenix.com. This platform only provides information storage space services.

Notice: The content above (including the videos, pictures and audios if any) is uploaded and posted by the user of Dafeng Hao, which is a social media platform and merely provide information storage space services."

[Editor in charge: Xie Wei PF123]