SAFE Charts Course for H2 2026: Accelerating Opening While Fortifying Defenses

China's foreign exchange regulator has laid out its key priorities for the latter half of 2026 in a recent video conference. The overarching strategy emphasizes a dual-track approach: advancing institutional opening in a steady manner while simultaneously reinforcing the framework to guard against external financial risks.

Enhancing Trade Facilitation for Emerging Sectors

A major focus will be deepening reforms to simplify foreign exchange procedures for trade. A comprehensive package of measures to optimize current account management is in the pipeline, designed to streamline foreign exchange receipts and payments for businesses.

The high-level facilitation policies for cross-border trade foreign exchange settlements, currently piloted in some regions, are slated for nationwide implementation. Support for new trade formats will be strengthened through:

  • Streamlining forex settlement processes for cross-border e-commerce and similar models.
  • Improving efficiency in foreign exchange settlement for service trade.
  • Developing tailored policies to support intermediate goods trade, crucial for stable industrial chains.

Advancing Capital Account Liberalization

On capital account opening, the approach remains measured and orderly. A suite of policies will be introduced to facilitate cross-border investment and financing.

A significant move is the nationwide rollout of the integrated cross-border fund pooling policy for multinational companies, allowing better treasury management. New regulations governing domestic foreign currency loans will also be clarified. Furthermore, channels for financial market connectivity will be expanded cautiously under the principle of maintaining stability.

Building Robust Defenses for Market Stability

Parallel to opening-up efforts, work will intensify to construct resilient buffers against external shocks. Authorities plan to enhance monitoring and analysis of cross-border capital flows to identify potential risks at an early stage.

Macro-prudential management tools and expectation guidance mechanisms will be refined. By employing a comprehensive policy toolkit, the goal is to mitigate excessive market volatility and maintain the general stability of the RMB exchange rate, fostering a predictable financial environment for the real economy.