At the Lujiazui Forum, the Central Bank of the Republic of China set out planned deep reforms and high-level opening in the foreign exchange field, aiming to build an FX management framework that is more convenient, more open, more secure and more technology-enabled. The remarks also emphasised maintaining basic stability of the renminbi (RMB) exchange rate at a reasonable and balanced level and keeping the balance of payments broadly balanced, noting a 1.6% RMB appreciation against the US dollar (USD) so far in 2025 and that both corporate FX hedging and RMB settlement shares in goods trade had risen to around 30%. The agenda would expand facilitation for compliant entities under a the more compliant, the more convenient approach, with stronger FX services for technology firms and small and medium-sized enterprises and an advance of banks’ FX business reforms through revamped pre-transaction due diligence, differentiated in-process reviews and post-transaction monitoring and reporting. It also includes new FX policy and FX ecosystem evaluation mechanisms, reforms to direct investment FX administration that shorten foreign direct investment registration processes and shrink negative lists on fund usage, and a package of capital account and market-opening steps such as optimizing the qualified foreign investor regime, cautiously extending market connectivity and strengthening integrated RMB and foreign currency management. External debt reforms would optimize quota management, reduce negative lists for the use of external debt proceeds and progressively move external debt registration to banks, while FX market development measures cover a broader product set, more participants and enhanced exchange-rate risk management services, alongside region-specific support for free trade zones, Hainan Free Trade Port and the Guangdong-Hong Kong-Macao Greater Bay Area. On risk control, the approach combines macroprudential tools with micro-level supervision, stronger cross-border flow monitoring and early warning, a shift toward entity-based supervision and tougher enforcement against illegal FX activity, supported by wider use of artificial intelligence and big data in smart FX management. The speech also flagged additional support policies, including expanded pilots for high-level opening in cross-border trade, nationwide roll-out of facilitation for research institutions using foreign capital, greater cross-border financing flexibility for technology firms, wider use of multinational integrated domestic and foreign currency cash pools, a green external debt policy pilot, streamlined management of funds from overseas listings and a new batch of Qualified Domestic Institutional Investor (QDII) investment quotas in the near term. In free trade zones, a package of 10 FX innovation measures is planned, including optimized settlement for new forms of international trade and expanded Qualified Foreign Limited Partner (QFLP) pilots, and the remarks referenced recent joint initiatives by the People’s Bank of China, the National Financial Regulatory Administration, the State Administration of Foreign Exchange and the Shanghai Municipal Government to improve cross-border financial services in Shanghai, including upgrades to free trade account functions and offshore trade finance pilots in Lingang.

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