High-tech MSMEs will be given a quota to borrow money abroad, and pilot projects for QFLPs and QDLPs will be carried out.

China’s SAFE (State Administration of Foreign Exchange) has launched a pilot program to open up cross-border investment and financing channels for businesses in designated pilot areas in Shanghai, Guangdong, Hainan and Zhejiang.

In an opinion, SAFE indicates that the pilot policy covers nine capital account reform measures, four current account facilitation measures and two related requirements to strengthen risk prevention and control and regulatory capacity building.

In terms of capital account reform, high-tech MSMEs will be given a quota to borrow money abroad, and pilot projects for QFLP (qualified foreign limited partners) and QDLP (domestic limited partners). qualified) will be carried out.

The QFLP and QDLP programs are pilot programs that enable cross-border private equity investments.

In addition, cross-border asset transfer activities are also being opened and a pilot project allowing multinational companies to integrate pools of capital in national and foreign currencies will be implemented.

SAFE said it will waive the administrative registration requirement for onshore reinvestment by foreign-invested enterprises, and that the currency registration of non-financial enterprises eligible for investment projects will be managed directly by banks. .

The scope of use of income and funds from investment projects is broadened and qualified companies will be allowed to choose the currency they use for cross-border investments and financing. The upper limit of the scale of loans abroad by non-financial enterprises is also raised.

In terms of facilitation of current accounts, SAFE said it will facilitate the receipt and payment of current account funds for high-quality businesses and help banks optimize settlement of new international trade. It will also expand the scope of businesses for net settlement of trade balances and exempt from registration special foreign exchange refunds for trade in goods.

In terms of risk prevention and control, SAFE will strengthen the monitoring and early warning of the risks of cross-border capital flows, make counter-cyclical adjustments and crack down on illegal activities in order to maintain stability and order in the financial market. changes.