In accordance with the reform principle of "step by step, overall planning, easier things first, then more difficult things, and leaving room for room", China has gradually promoted capital account convertibility.

At the end of 2004, among the 43 capital account transactions determined by the International Monetary Fund, 11 were convertible in my country, 11 had less restrictions, 15 had more restrictions, and only 6 were strictly controlled.

Currently, unless otherwise stipulated by the State Council, all foreign exchange earnings from capital projects need to be repatriated domestically.

Domestic institutions (including foreign-invested enterprises) shall apply to the foreign exchange bureau at the place of registration to open a special foreign exchange account in a designated foreign exchange bank for retention of foreign exchange income under the capital account.

The foreign exchange capital settlement under foreign investment can be handled directly with the corresponding materials at the designated foreign exchange bank authorized by the foreign exchange bureau. The foreign exchange income under other capital accounts can be sold to the designated foreign exchange bank only after approval by the foreign exchange management department.

Except for some projects of designated foreign exchange banks, foreign exchange purchases and external payments under capital projects must be approved by the foreign exchange management department. Only with the approval documents can you handle the sale and payment of foreign exchange at the bank.

my country's foreign exchange management of foreign direct investment has always been relatively loose.

In recent years, foreign exchange management for overseas direct investment by domestic enterprises has been continuously relaxed to support enterprises in "going global".

Foreign direct investment management: The capital and investment funds of foreign-invested enterprises need to be kept in special accounts; the settlement of foreign exchange capital under foreign investment can be handled directly with the corresponding materials at the designated foreign exchange bank authorized by the foreign exchange bureau. Foreign exchange under other capital accounts

Income can be settled in foreign exchange after approval by the foreign exchange bureau; expenditures under the capital account of foreign-invested enterprises can be remitted from their foreign exchange accounts or purchased foreign exchange after approval; for the purpose of supervision and management, foreign exchange registration and annual inspection systems are implemented for foreign-invested enterprises.

Overseas investment management: The State Administration of Foreign Exchange is the foreign exchange management agency for overseas investment.

If domestic institutions make overseas investments and need to purchase foreign exchange or remit foreign exchange, they must report to the local foreign exchange branch (foreign exchange management department) in advance for review of the source of investment foreign exchange funds; all investment projects shall be physical investment projects, foreign aid projects and strategic projects approved by the State Council.

Investment projects are exempt from this review; after the overseas investment project is approved, domestic investors should go to the foreign exchange management department to handle the foreign exchange registration for overseas investment and the approval procedures for the purchase and remittance of investment foreign exchange funds.

The state implements a joint annual inspection system for overseas investments.

In the inflow of securities funds, foreign investors can directly enter the domestic B-share market without approval; foreign capital can indirectly invest in the domestic A-share market through qualified foreign institutional investors (QFII), buying and selling stocks, bonds, etc., but qualified foreign institutional investors

The investor's domestic securities investment must be within the approved quota; upon approval, domestic enterprises can raise funds overseas for repatriation through overseas listing (H shares) or issuance of bonds.

Securities capital outflow management is strict and channels are limited.

Except for designated foreign exchange banks that can buy and sell overseas non-stock securities and approved insurance companies’ foreign exchange funds that can be used overseas with their own funds, other domestic institutions and individuals are not allowed to invest in overseas capital markets.

At present, individual insurance companies have been approved to use foreign exchange funds overseas and invest in overseas securities markets.

In addition, China International Capital Corporation has been approved to conduct financial innovation pilots, launch foreign exchange asset management business, allow it to manage the foreign exchange assets of its domestic customers through special accounts and conduct overseas operations. International development institutions have also begun pilot projects to issue RMB bonds in China.

Foreign debt management: China implements planned management of foreign debt. Medium and long-term foreign debt borrowed by financial institutions and Chinese-funded enterprises with a maturity of more than one year must be included in the national plan for utilizing foreign capital.

Short-term foreign debt with a maturity of less than 1 year (including 1 year) is managed by the State Administration of Foreign Exchange.

Foreign-invested enterprises do not need prior approval to borrow international commercial loans, but the sum of their short-term foreign debt balance and the cumulative amount of medium- and long-term foreign debt must be strictly controlled within the difference between their total investment and the amount of registered capital.

After all domestic institutions (including foreign-invested enterprises) borrow foreign debts, they must go to the foreign exchange bureau in a timely manner to register foreign debts on a regular basis or on a case-by-case basis.

For foreign debts registered on a case-by-case basis, the repayment of principal and interest must be approved by the foreign exchange bureau (except for banks).

Local governments are not allowed to borrow from foreign countries.

The issuance of commercial papers by domestic institutions is subject to the approval of the State Administration of Foreign Exchange and will occupy its short-term loan quota.

In addition, deferred payments of more than 180 days (inclusive) by domestic institutions and equivalent to more than 200,000 U.S. dollars (inclusive) are included in the registration management of foreign debts; if domestically registered multinational companies conduct centralized fund operations, if the funds they absorb from overseas affiliated companies are used onshore,

Included in foreign debt management; overseas guarantees under domestic loans are included in foreign debt management based on the performance amount, and the sum of the company's cumulative mid- and long-term foreign debt, the balance of short-term foreign debt, and the performance amount of overseas institutions and individuals' guarantees shall not exceed the difference between its total investment and registered capital

.

External guarantee management: External guarantees are contingent debts, and their management refers to external debt management. They can only be provided by financial institutions approved to operate external guarantee business and non-financial corporate legal persons with the ability to subrogate debts.

Except for on-lending using foreign government loans or loans from international financial organizations with the approval of the State Council, state agencies and public institutions are not allowed to issue guarantees to external parties.

Except for guarantees issued by the Ministry of Finance and non-financing external guarantees issued by designated foreign exchange banks, guarantees issued by designated foreign exchange banks under financing items are subject to annual balance management. External guarantees issued by other domestic institutions must be reviewed and approved by the foreign exchange bureau on a case-by-case basis.

External guarantees must be registered with the foreign exchange bureau, and the performance of external guarantees must be approved by the foreign exchange bureau.