China moves to simplify forex settlements and make cross-border business easier

China is set to simplify foreign exchange settlement processes and cross-border business operations, in an effort to reduce transaction costs and promote international trade. The State Administration of Foreign Exchange (SAFE) has released a draft notice for public comment, detailing nine measures intended to expand foreign exchange settlement services and streamline cross-border payments.

These initiatives aim to broaden the applicable scenarios, service scope, and transaction types, while simultaneously lowering businesses' costs associated with fund settlements and transactions.

Key to the proposed reforms is the nationwide rollout, starting January 1, of a program designed to facilitate foreign exchange receipts and payments for cross-border trade. Currently operating on a pilot basis, this scheme allows banks to streamline documentation checks and settlement procedures for eligible companies with a clean compliance track record.

The draft also seeks to broaden the range of foreign exchange services provided by payment institutions, moving beyond cross-border e-commerce to encompass market procurement trade and integrated foreign trade services.

Public consultation on the draft notice will be open until December 1, 2023. The move follows a pledge by SAFE chief Zhu Hexin to introduce a package of measures aimed at facilitating current-account transactions, alongside steps to simplify cross-border investment and financing and further liberalize the foreign exchange market. Speaking at the 2026 Financial Street Forum in Beijing, Zhu highlighted these initiatives as measures to help businesses leverage domestic and overseas resources more effectively.

Other measures included in the draft notice encompass exempting eligible companies with robust compliance records from trade credit reporting, and allowing companies with strong internal controls and compliance records to report outstanding trade credit balances on a monthly basis rather than a transaction-by-transaction basis. The draft also proposes easing foreign exchange settlement rules for operating leases and permitting eligible businesses in nine border regions to net cross-border trade receipts and payments.

Additionally, the proposed measures aim to streamline foreign exchange services for international sporting events, enabling organizers to handle event-related transactions through payment instructions, while providing overseas participants with personal foreign exchange services without the need to submit supporting documents for each transaction.