September 26, 2012

Starting from August 1, the procedure of verifying and cancelling foreign exchange receipts and payments in trade in goods case by case has been revoked and replaced by total quantity check in a move to facilitate foreign exchange receipts and payments in trade. Meanwhile, export customs declaration and export VAT rebate formalities have been simplified and the State Administration of Foreign Exchange (SAFE) has also started to implement dynamic management of enterprises by category.

The above is the major content of foreign exchange administration system reform for trade in goods disclosed by the Shanghai head office of China's central bank. Reportedly, following approval granted by the State Council, the reform has been unfolded across the country since 1 August.

According to the central bank's Shanghai head office, implementation of the foreign exchange administration system reform for trade in goods can effectively shorten the time required by enterprises in receiving and paying foreign exchange in connection with external trade, lower the cost of foreign trade enterprises, effectively clamp down on such illegal acts as the inflow of "hot money" and tax fraud, as well as prevent and defuse foreign exchange receipt and payment risks.