China's forex regulator said Saturday that it will intensify supervision on commercial banks' trade finance businesses to curb fake financing activities and prevent abnormal cross-border forex movement.

The State Administration of Foreign Exchange (SAFE) said in a statement that its local branches should urge banks to enhance authenticity and compliance examinations for their trade finances.

Banks should "actively support authentic trade finance demands by the real economy, but prevent companies from getting trade finance by making up trade backgrounds," the statement said.

They should also enhance internal control and management and report suspicious transactions in a timely manner, the SAFE said.

The SAFE will strengthen the supervision and inspection on companies with abnormal trade balances, especially those with abnormal increases in long-term trade financing and having typical traits of arbitrage, while continue to provide convenience for companies complying with laws and regulations.

The SAFE said it will also intensify punishments for violations on the parts of commercial banks and companies.

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