Open Governance
Sichuan Expands Coverage of Foreign Exchange Settlement Facilitation Policies for High-quality Trade Firms

In August 2022, a high-quality facilitation pilot firm of household appliances export received four million U.S. dollars of export credit insurance financing from the Industrial and Commercial Bank of China Sichuan Branch. The fund, coupled with the support of preferential policies, addressed the pressing need of the firm in cross-border trade.

It is a microcosm of the efforts made by the State Administration of Foreign Exchange (SAFE) Sichuan Branch to actively expand the coverage of foreign exchange settlement facilitation policies for high-quality trade firms. By the end of this August, the number of banks involved in facilitation policies in Sichuan has increased to 10, and the number of enterprises has reached 180, of which small and medium enterprises account for 79%. A total of 20,957 facilitation businesses have been handled, with the value totaling 12.053 billion U.S. dollars. 

Since 2022, the SAFE Sichuan Branch has taken multiple measures in facilitation policies, exchange rate risk avoidance, and cross-border investment and financing reform in response to changes in the foreign economic situation. Specifically, it has continued promoting activities for the year of improving foreign exchange services for cross-border trade, investment and financing, closely followed the main line of the policy to serve the real economy, and enhanced the coverage of policy dividends and market entities' sense of gain, in a bid to help the growth of Sichuan's foreign economy to be in the forefront. 

The SAFE Sichuan Branch has promoted Chengdu's policies supporting compliance fund of foreign exchange derivatives in 12 cities (prefectures) in the province and established a cooperation mechanism of exchange rate risk avoidance, so as to help small and medium enterprises stabilize the market. By the end of July this year, the value of contracts for foreign exchange derivatives signed in the whole province rose by 37.3% year on year, and the foreign-exchange hedging rate reached 36%, 10 percentage points higher than the national average. The contracts for foreign exchange derivatives signed among micro, small and medium enterprises recorded a year-on-year increase of 72.6%, and the number of new applicants for foreign-exchange hedging amounted to 260, doubling from the previous year.

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