By the end of the first quarter China had held 659.1 billion USD of foreign exchange reserve. Hu Xiaolian, Director of the State Administration of Foreign Exchange (SAFE), highlighted measures to be taken to improve the operation and management of forex reserve to harvest higher yields and control the risk exposure.

Firstly, she realizes the importance of the insight into the situation of the forex management, especially the statistics and analysis of foreign exchange.

She then stressed a stronger awareness of service to facilitate trade and investment. She urged to research on policies to boost the non-public economy, the border trade and "going overseas" strategy of enterprises.

Studies should be made, she said, on market mechanism and management system for the adjustment of the international payment.

She reiterated the orderly and controllable process of opening the capital account. For this purpose, she gives the present priority to channeling the capital outflow and watching over the influx.

She expects the development of the forex market with better trading models, more products and more efficient supervision on the market.

She also mentioned the importance of improving the system of the RMB exchange rate forming, a stance repeatedly stressed by the Chinese government.

She called on surveillance and prevention of any possible risks in international payment.

The SAFE has decided to make nationwide its pilot reform on forex management for investing on the overseas market. The circular on spreading the reform which was staged in 24 provincial areas has been released on May 19.

According to the new policy, 5 billion USD of foreign exchange will be available to investors to extend their business overseas. Extra quota is possible if necessary. Only 3.3 billion USD was accessible in the past.

Branches of SAFE are entitled to decide a project worth as much as 10 million USD, compared with 3 million USD in the past.

The new policy gives more support to enterprises with ambition of tapping overseas market when their expansion strategy is approved by the department concerned.

By People's Daily Online