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

China is set to simplify international business transactions and reduce cross-border payment costs, according to a draft proposal released by the State Administration of Foreign Exchange (SAFE). The regulatory body outlined nine measures aimed at broadening the application of foreign exchange settlement services and cutting down business expenses associated with fund transfers.

A key proposal is the nationwide rollout of a program from January 1, designed to streamline the process for foreign exchange receipts and payments involved in cross-border trade. This program, which has been operating on a pilot basis, would allow banks to ease documentation requirements and settlement procedures for compliant companies engaging in international trade.

Furthermore, the draft seeks to expand the services of payment institutions, enabling them to handle currency conversion and related payments for businesses in market procurement trade and integrated foreign trade services. This expansion would cover not just cross-border e-commerce, but also broader trade sectors. The public consultation on these proposals will run until December 1.

The proposal also includes measures to exempt certain compliant companies from trade credit reporting and allow others to report outstanding trade credit balances on a monthly basis. Additionally, the draft proposes easing foreign exchange settlement rules for operating leases and allowing businesses in nine border regions to net cross-border trade receipts and payments.

Other additional measures include streamlining foreign exchange services for international sporting events, enabling organizers to handle event-related transactions through payment instructions. Overseeing overseas participants, they will have access to personal foreign exchange services without submitting supporting documents for each transaction.