China's Foreign Exchange Regulator Announces Market Opening and Tightened Capital Oversight

The State Administration of Foreign Exchange (SAFE) said it will continue to steadily expand institutional opening in China's foreign‑exchange sector during the second half of 2024. A work meeting outlined a package of trade‑facilitation reforms, including measures to optimise current‑account foreign‑exchange management, promote high‑level openness for cross‑border trade, and support new trade models such as e‑commerce and service‑trade settlements. SAFE will also roll out policies to lower hedging costs for small and medium‑sized enterprises, encourage multi‑party cooperation, and advance the development of the Shanghai International Financial Center and the Hainan free‑trade port.

In parallel, the regulator pledged to strengthen monitoring of cross‑border capital flows, refine macro‑prudential and expectation management, and crack down on illegal cross‑border financial activities using technologies such as artificial intelligence. These steps aim to maintain foreign‑exchange market stability while supporting regional and sectoral growth.