Economic Daily:

We understand that the Notice of the State Administration of Foreign Exchange on Matters Related to Deepening the Reform of Cross-border Investment and Financing Foreign Exchange Management (Draft for Public Comments) has concluded its public consultation period. Could you please provide a brief update on the key developments and outline the next steps? Thank you.

Li Bin:

I'd like to invite Mr. Xiao to answer this question.

Xiao Sheng:

Thank you for your question. Recently, Administrator Zhu Hexin announced several supportive reform policies. The notice you inquired about is also one of the initiatives to implement these policies. It includes nine measures covering three areas: investment, financing and payments. Some measures have already been piloted in some regions with positive results, and will be promoted nationwide. Here, I will focus on introducing three key policies.

The first policy is to facilitate scientific research institutions in receiving overseas funds, commonly referred to as "Kehuitong" (Research Remittance Connect) for short. The policy allows eligible research institutions to receive and use funds remitted from overseas once they have registered their basic information with the bank. In its early stage, the Kehuitong pilot program was rolled out in 16 cities, including Beijing, Hefei, Wuhan and Shenzhen, and has achieved positive results. This time, the pilot program will be expanded nationwide, further streamlining channels for overseas fund inflows, and providing effective policy support to advance international scientific research cooperation.

The second policy aims to facilitate cross-border financing for tech innovation enterprises. Earlier, we launched a pilot program across the country to facilitate cross-border financing for tech innovation enterprises. Eligible tech innovation companies in 17 provinces and cities, including Guangdong and Sichuan, are allowed to borrow up to $10 million in external debt independently. Meanwhile, the quota for other provinces and cities is set at $5 million. This reform standardized the borrowing quota for tech innovation enterprises at $10 million for independent external debt, while increasing the limit to $20 million for select top-performing enterprises under an innovation points system. This will further help tech innovation enterprises expand their financing channels, effectively support them in making better use of both domestic and international markets, reduce financing costs, and improve financing efficiency.

The third policy is to make domestic reinvestment by foreign-invested enterprises more convenient. Building on an earlier pilot program, we plan to fully abolish the registration requirement for domestic reinvestment of foreign direct investment nationwide. This will enable enterprises to transfer reinvestment funds directly to relevant accounts, reducing operational costs and capital flow time, thereby improving investment efficiency.

The public consultation phase for this notice has now been completed. We're now intensifying efforts to review and analyze these collected opinions and suggestions. Moving forward, we will formally issue the notice as soon as possible based on the full incorporation of opinions from all parties. Thank you.