ISSUING AUTHORITIES:

Ministry of Commerce

People’s Bank of China

State Administration of Foreign Exchange

DATE OF ISSUANCE:

May 24, 2022

EFFECTIVE DATE:

May 24, 2022

In order to further support foreign trade enterprises in improving their capability to manage exchange rate risks and promote the sound operation of foreign trade enterprises, the Ministry of Commerce (MOFCOM), the People’s Bank of China (PBC) and the State Administration of Foreign Exchange (SAFE) jointly released the Notice on Supporting Foreign Trade Enterprises in Improvement to Their Exchange Rate Risk Management Capability (the “Notice”) on May 24, 2022.

The Notice sets out five requirements for a local commerce authorities, PBC and SAFE branch offices as follows: (i) fully comprehending the significance of exchange rate risk management and launching targeted measures with a focus on “urgent problems and concerns”; (ii) strengthening publicity and training to help enterprises establish the concept of “risk-neutral” exchange rates; (iii) improving exchange rate hedging products and services to further enhance the convenience of RMB cross-border settlement, including facilitating use of RMB in cross-border trade and investment, encouraging enterprises to adopt RMB cross-border pricing and settlement to prevent exchange rate risks, and encouraging banks to streamline the settlement process through electronic review of documents and improve the efficiency of cross-border RMB settlement in new forms of trade; (iv) establishing a docking mechanism among governments, banks and enterprises to provide targeted services for micro, small and medium-sized foreign trade enterprises; (v) playing a guiding role in the use of fiscal funds to reduce the comprehensive costs of enterprises, encouraging banks and guarantee institutions to yield profits to the real economy and reduce the risk hedging costs of enterprises, especially micro, small and medium-sized enterprises, etc.

Reference:

商务部 中国人民银行 国家外汇管理局落实推动外贸保稳提质意见 印发《关于支持外经贸企业提升汇率风险管理能力的通知》