The Central Bank of the Republic of China used a speech at the Lujiazui Forum to set out a policy agenda for higher-standard capital account opening in China, focused on making cross-border investment and financing more open, predictable and easier for market participants. The framework is built around four shifts: from channel-based opening to institutional opening, from transaction-level convenience to entity-level convenience, from foreign exchange management to coordinated local and foreign currency policies, and from managing the conversion leg alone to overseeing and servicing the full cross-border capital flow chain. Under that approach, the speech said financial market opening will be pushed further by increasing openness in the securities issuance market, aligning trading market opening rules more closely with international norms, and integrating existing access channels and rules. It also signaled a move away from ex ante approvals toward mid-process monitoring and ex post checks, with greater convenience for well-run and creditworthy firms. The speech highlighted existing reforms as a base, including foreign exchange business reform at major banks, which has facilitated more than USD 1.3 trillion in business for companies, and multinational cash pool policies that have supported more than 1,100 multinational groups and 20,000 member companies with more than USD 2.4 trillion in cross-border receipts and payments. It also said authorities will strengthen coordination between foreign exchange and renminbi cross-border policies, support the offshore renminbi market, broaden renminbi investment and hedging products, and bring in more foreign participants to the foreign exchange market while supporting innovation in renminbi foreign exchange derivatives. Near-term steps were set out more specifically. These include a new package of incremental measures to complement nine previously issued investment and financing facilitation policies, a comprehensive reform of cross-border foreign direct investment policies, and further simplification of exchange management for outbound direct investment and external debt. The speech also pointed to optimizing rules for foreign exchange loans and cross-border equity incentives, issuing a new batch of Qualified Domestic Institutional Investor quotas, and supporting Shanghai with pilot measures covering more flexible trade foreign exchange settlement, easier offshore investment of cross-border reinsurance income, and wider use of multinational treasury management policies.

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