Notice on Further Optimizing Cross-border Renminbi Policies to Support the Stabilization of Foreign Trade and Foreign Investment Released
ISSUING AUTHORITIES:
People's Bank of China
National Development and Reform Commission
Ministry of Commerce
State-owned Assets Supervision and Administration Commission of the State Council
State Administration of Foreign Exchange
DATE OF ISSUANCE：
December 31, 2020
EFFECTIVE DATE:
February 04, 2021
On December 31, 2020, People’s Bank of China, along with other authorities, promulgated the Notice on Further Optimizing Cross-border Renminbi Policies to Support the Stabilization of Foreign Trade and Foreign Investment (“Notice”), which took effect on February 4, 2021. The Notice primarily announces a series of measures with a view to facilitating cross-border renminbi settlement for enterprises and individuals.
From the perspective of enterprises, the Notice proposes the promotion of a more efficient process of RMB settlement facilitation for trade and investment, including carrying out a pilot program of a higher level of trade and investment facilitation nationwide, supporting cross-border RMB settlement for new forms of trade such as cross-border e-commerce, market procurement trade mode and foreign trade integrated services, etc., and promptly adjusting the requirements for business handling and review in accordance with the commercial system reform.
Furthermore, the Notice states that cross-border RMB settlement process will be simplified. The measures adopted in this respect include optimizing the formation mechanism for the list of cross-border RMB businesses subject to special regulation, supporting electronic review of documents and carrying out a pilot program to facilitate cross-border RMB settlement processes for high-quality enterprises in the category of contracted projects nationwide. Most importantly, when a multinational corporation group has designated a domestic member enterprise as the enterprise responsible for carrying out cross-border RMB business, that enterprise may, in light of their actual needs, open RMB settlement accounts at different places to process the centralized cross-border RMB receipt and payment under the current account.
Moreover, the Notice also aims to optimize the administration of cross-border RMB investment and financing by taking measures to relax the restrictions on the use of RMB income under certain capital accounts, facilitating reinvestment in China by foreign-invested enterprises, canceling the relevant special account management requirements for foreign direct investment, optimizing the administration of overseas RMB borrowings of domestic enterprises and simplifying the administration of overseas RMB loans of domestic enterprises.
The Notice also contains provisions relating to individual income. These provisions are primarily aimed at facilitating an individual’s cross-border RMB settlement by further developing cross-border RMB settlement under current accounts of individuals and facilitating individuals to receive remittances under the same names from Hong Kong and Macao through their RMB bank settlement accounts. In addition, the Notice also aims to facilitate the use of RMB bank settlement accounts by overseas institutions by making it easier for overseas institutions to receive overseas funds through their RMB bank settlement accounts.
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