State Administration of Foreign Exchange, Li Bin: The situation in the domestic real estate market has changed and it is necessary to optimize and adjust relevant foreign exchange management measures.

On September 15, Li Bin, Deputy Director and spokesperson of the State Administration of Foreign Exchange, answered questions from reporters regarding the "Notice of the State Administration of Foreign Exchange on Deepening Reform of Cross-border Investment and Financing Foreign Exchange Management." He stated that in recent years, the situation in the domestic real estate market has changed, and macro-control measures related to the real estate industry have been optimized and adjusted. Based on this, it is necessary to optimize and adjust relevant foreign exchange management measures to adapt to the new situation and requirements, and to support the stable development of the real estate market. Li Bin mentioned that in the negative list of capital project foreign exchange income and its use of renminbi for domestic payment in the country, it includes the prohibition of using it to purchase non-self-occupied residential properties. This policy was introduced in the context of an overheated real estate market, where various departments successively implemented a series of control policies targeting real estate enterprises and the industry. The State Administration of Foreign Exchange, from the perspective of preventing speculation and speculative capital inflows, cooperated in issuing measures such as "capital funds and external debts of non-real estate enterprises shall not be used for the construction or purchase of non-self-occupied real estate," which played a positive role in the phased stable and healthy development of the real estate market. The original text is as follows: Deputy Director and spokesperson of the State Administration of Foreign Exchange, Li Bin, Answers Questions on the "Notice of the State Administration of Foreign Exchange on Deepening Reform of Cross-border Investment and Financing Foreign Exchange Management" Recently, the State Administration of Foreign Exchange issued the "Notice of the State Administration of Foreign Exchange on Deepening Reform of Cross-border Investment and Financing Foreign Exchange Management" (Huifay [2025] No. 43, hereinafter referred to as the "Notice"). Li Bin, Deputy Director and spokesperson of the State Administration of Foreign Exchange, answered questions from reporters on the relevant content of the "Notice." Question: What is the background of the issuance of the "Notice"? In order to implement the spirit of the Third Plenary Session of the 20th Central Committee of the Party and to implement the decision-making arrangements of the Central Financial Work Conference to do a good job in the "five major articles of finance," in recent years, the State Administration of Foreign Exchange has continuously deepened reforms and expanded opening up in accordance with the idea of systematic integration, stability, and orderly manner. On the basis of full investigation and understanding of opinions and suggestions on foreign exchange business related to foreign direct investment (FDI), cross-border financing, and capital project income payment from banks, enterprises, and individuals, the "Notice" was formulated to continuously enhance the level of facilitation of cross-border investment and financing, support attracting and utilizing foreign capital, and promote financial services to serve the high-quality development of the real economy. Question: What arrangements does the "Notice" have in deepening reform of foreign direct investment (FDI) foreign exchange management? Firstly, the registration of basic information of advance fees for foreign direct investment (FDI) is cancelled. Overseas investors who need to remit advance fees before setting up FDI companies in the country can directly open relevant accounts and remit funds. Secondly, the registration of domestic reinvestment by FDI companies is cancelled. FDI companies can carry out domestic reinvestment with foreign exchange capital and their renminbi capital obtained from foreign exchange, and the receiving enterprise or equity transferor does not need to handle the registration of receiving domestic reinvestment. The relevant funds can be directly transferred to relevant accounts. This policy has been piloted in some provinces and cities, with good operation, and is now being promoted nationwide. Thirdly, foreign exchange profits under FDI can be reinvested domestically. It is clear that foreign exchange profits legally generated by FDI companies in the country, and foreign exchange profits legally obtained by overseas investors, can be reinvested domestically. Fourthly, facilitating non-enterprise research institutions to attract and utilize foreign capital. Non-enterprise research institutions in the country can receive foreign funds and handle relevant registration and remittance procedures in accordance with the FDI companies. This is a pilot program called "Science Exchange Pass" implemented in some provinces and cities in the previous period and is now being promoted nationwide. Question: What specific measures are there in the "Notice" to deepen the reform of cross-border financing foreign exchange management? Firstly, expanding the facilitation of cross-border financing for scientific and technological innovation enterprises, the unified quota for high-tech enterprises, "specialized and new technologies," and small and medium-sized enterprises that are technology-oriented to raise funds for cross-border financing nationwide to the equivalent of 10 million US dollars, and raising the quota for enterprises meeting the conditions selected based on the "innovation credit system" to the equivalent of 20 million US dollars. Secondly, simplifying the requirements for enterprise signing and registration management for participating in the facilitation of cross-border financing business, no longer requiring relevant enterprises to provide audited financial reports for the previous year or the most recent period during the signing and registration process. Question: What conveniences does the "Notice" bring in terms of capital project income payment? Firstly, reducing the negative list of capital project foreign exchange income and its use of renminbi for domestic payment, cancelling restrictions on not using it to purchase non-self-occupied residential properties. Secondly, optimizing the facilitation of capital project foreign exchange income payment. Banks are allowed to determine the proportion and frequency of random post-event inspections based on customer compliance operations and risk levels, improving the business experience of enterprises and helping optimize the environment for foreign investment in China. Thirdly, facilitating overseas individuals in making payment for purchasing domestic houses. The facilitation of payment for house purchases by residents of Hong Kong and Macao in the Guangdong-Hong Kong-Macao Greater Bay Area, which was implemented as a pilot, is now being promoted nationwide. Overseas individuals who meet the qualifications for purchasing houses from real estate authorities and local authorities can make payments for the foreign exchange involved in purchasing houses based on the house contract or agreement before obtaining the house purchase filing certificate from the real estate authorities. Question: What considerations were taken into account in reducing the negative list of capital project foreign exchange income and its use of renminbi for domestic payment? The current negative list of capital project foreign exchange income and its use of renminbi for domestic payments includes the prohibition of using it to purchase non-self-occupied residential properties. This policy was introduced in response to the overheated real estate market, where various departments successively implemented a series of control policies targeting real estate enterprises and the industry. The State Administration of Foreign Exchange, from the perspective of preventing speculation and speculative capital inflows, cooperated in issuing measures such as "capital funds and external debts of non-real estate enterprises shall not be used for the construction or purchase of non-self-occupied real estate," which played a positive role in the phased stable and healthy development of the real estate market. In recent years, the situation in the domestic real estate market has changed, and macro-control measures related to the real estate industry have been optimized and adjusted. Based on this, it is necessary to optimize and adjust relevant foreign exchange management measures to adapt to the new situation and requirements, and to support the stable development of the real estate market. Question: What considerations were taken into account in optimizing the payment policy for overseas individuals purchasing houses domestically? Before the issuance of the "Notice," overseas individuals needed to provide a house purchase registration certificate issued by the real estate authorities for making payments for domestic house purchases. However, real estate companies or second-hand house sellers usually require the down payment to be received before handling the online signing. In order to solve the difficulties in practical handling of the business, based on in-depth research, the State Administration of Foreign Exchange implemented facilitation measures for Hong Kong and Macao residents in the Guangdong-Hong Kong-Macao Greater Bay Area to implement a "pay first and supplement later" policy. This means that buyers can make payments based on the house contract or agreement before obtaining the house purchase filing certificate from the real estate authorities. The pilot program has received positive feedback and results. In order to meet the reasonable needs of more overseas individuals for purchasing houses in mainland China, promote regional integration and talent mobility, the State Administration of Foreign Exchange has extended the facilitation policy for payment for purchasing houses in the Greater Bay Area to the whole country. It should be emphasized that the facilitation of payment for domestic house purchases by overseas individuals is only an optimization of the review procedures for making payments at banks, without changing the current policy for overseas individuals to purchase houses domestically. The prerequisite for enjoying the policy convenience is that overseas individuals meet the qualifications set by the real estate authorities and local authorities for house purchases.