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| Finance and Foreign Exchange |
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| 1.
Chinese financial system |
The
present financial system in China is, under the leadership
of the People's Bank of China and with exclusively
State-owned commercial banks as the main body, a financial
institution system allowing simultaneous co-existence,
divide the work and coordination of the State policy-related
banks, other commercial banks and various financial
institutions.
1) People's Bank of China
The People's Bank of China is China's central bank,
which is responsible for establishing and implementing
national financial policies, and regulating currency
circulation and credit activities. It represents the
country to the foreign countries and supervises and
administers the entire financial activities at home.
2) Commercial banks
Chinese commercial bank system is composed of three
parts, namely exclusively State-owned commercial banks,
other shareholding commercial banks and foreign-funded
commercial banks, among which the exclusively State-owned
banks constitute the main body of Chinese commercial
bank system.
3) Policy-related banks
Since 1994, China has constructed three policy-related
banks directly under the State Council, namely the
State Development Bank, Agriculture Development Bank
of China and the Export-Import Bank of China.
4) Non-bank financial organizations
Chinese non-bank financial organizations mainly include
Trust & Investment Corporation, Securities Company,
Insurance Company, Finance Company, Leasing Company
and Credit Union.
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| 2.
Chinese foreign exchange control system |
Chinese
foreign exchange control system, basically belonging
to partial foreign exchange control, implements convertibility
on current accounts, certain control on capital items,
and supervision and management on foreign exchange
business of financial organizations.¡£
1) The convertibility of Renminbi under current accounts
1.To implement banking settlement of exchange system
on foreign exchange revenue of current accounts.
2.To lift limitations on the foreign exchange payment
of current account
3.To carry out the system of cancel after verification
on the exchange of import and export acceptance and
payment.
4.To check the authenticity of trade through customs
declaration net checking system on import and export.
2) Foreign exchange control under capital items The
basic principle for managing foreign exchange receipts
and disbursements of Chinese capital items is to boost
the exchange of Renminbi under capital items by perfecting
foreign exchange control and creating conditions to
while abandoning the limitations on the convertibility
of current accounts.
3) The formation mechanism of improved Renminbi exchange
rate After the integration of the exchange rate with
international level on January 1st, 1994, China begins
to implement the single and managed floating exchange
rate system based on the market supply and demand.
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4) The macro-management system of perfected international
balance of payment The new "Declaration Ways for International
Balance of Payments Statistics" was carried out in
1996. On the basis of indirect declaration on the
international balance of payments through financial
organizations in 1996, four declarations were put
forward in 1997, including direct investment, securities
investment, foreign balance sheet-income of financial
organizations and exchange
5) Enhancement of the supervision and management on
the foreign exchange business of financial organizations
During dealing with the business of exchange, settlement
and sales, the bank must strictly check related receipts
according to regulations to avoid interfusion of the
foreign exchange receipts and disbursements under
capital items into the exchange, settlement and sales
under current account, and to prevent the lawless
persons from kiting transaction foreign exchange through
the channel of exchange, settlement and sale. |
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