The Ministry of Commerce, the People’s Bank of China, the National Financial Regulatory Administration and the State Administration of Foreign Exchange have jointly issued “Opinions on Strengthening Commercial and Financial Coordination and Supporting the High-Quality Development of Cross-Border Trade and Investment with Greater Efforts”.
The central authorities require the financial industry to play a role in stabilizing foreign trade and foreign investment, and serve the global development of Chinese enterprises and the construction of the Belt and Road. The issuance of the document provides guidance for the financial industry to fulfill those requirements.
The document proposes 11 policy measures in five aspects with the aim of promoting foreign trade by optimizing the financial services and facilitating foreign investment by strengthening the guarantee of foreign financial services.
The trade promotion measures include improving credit, credit insurance, policy financing, and property insurance and other services for international cooperation in foreign trade supply chains, cross-border e-commerce exports, and the green trade, as well as increasing support for service trade funds, intangible asset pledge financing and data element insurance.
The investment facilitation measures aim to improve the foreign investment environment, connect the country with foreign-funded enterprises, provide diversified professional financial services, enhance the efficiency of open platforms, deepen innovation and collaboration, and jointly promote institutional opening-up in trade, investment, finance and other fields.
According to the document, these central departments should encourage relevant entities to further improve cross-border renminbi services to better meet the needs of enterprises, carry out in-depth training and publicity, optimize exchange rate hedging products, and reduce the foreign exchange hedging costs of small and medium-sized enterprises.
Meanwhile, the document attaches great importance to managing and controlling risks related to cross-border trade, investment and financial exchanges.
The document, which is problem-targeted and solution-oriented, plans commerce and finance work as a whole and calls for close coordination and exchanges between the commerce and finance departments to prevent the departments from hoeing their own rows only. For too long, the departments of finance, foreign exchange, banking, commerce, business, investment, trade and market regulation have operated separately and all have claimed their jobs done, but many real problems companies and investors encounter in practice have remained unaddressed as they cannot be resolved by any of these departments separately.
The government departments should fundamentally recognize that they are not only responsible for implementing the instructions of higher-level authorities but also meeting the needs of their service objects. A top-down instruction system within the administration itself is not enough. The transverse cross-sector exchanges and collaboration between departments of the same level are weak, making everybody’s business nobody’s business.
The market has long called for a smooth feedback channels through which the market entities can express their views to the higher-level authorities on both their practical concerns as well as the performances of these intermediate departments that are supposed to be in charge of helping them address their problems so as to form a closed loop of policy execution to prevent the relevant departments from offering only lip service. To answer that call is a reason why the document was released.