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Notice of the General Office of Shanghai Municipal People’s Government on Transmitting the Opinions on Promoting the Development of Renminbi Settlement of Cross-border Trade Transactions and Related Business in This Municipality Made by Seven Departments Including the Municipal Office of Finance Service

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(August 23, 2010)

SMPG GO G [2010] No. 33

Attention: all District and County People’s Governments, and all relevant Commissions, Offices and Bureaus (Administrations) of the Municipal People’s Government:

The Opinions on Promoting the Development of Renminbi Settlement of Cross-border Trade Transactions and Related Business in This Municipality made by the Municipal Office of Finance Service, the People’s Bank of China, Shanghai Branch, the Municipal Finance Bureau, the Municipal Commission of Commerce, the Shanghai Customs District, the Municipal Administration of State Taxation, and the China Banking Regulatory Commission, Shanghai Office have been approved by the Municipal People’s Government. We hereby transmit them to you, and request you to implement them conscientiously.

Opinions on Promoting the Development of Renminbi Settlement of Cross-border Trade Transactions and Related Business in This Municipality

On July 6 of last year, Shanghai took the lead in piloting the Renminbi settlement of cross-border trade transactions upon the approval of the State Council. Up to the present, the pilot program has made steady progress, and achieved good results. We hereby put forward the following opinions on promoting the development of Renminbi settlement of cross-border trade transactions and related business in this Municipality in accordance with the spirits of the Notice on Issues Concerning the Expansion of Pilot Program of Renminbi Settlement of Cross-border Trade Transactions made by the People’s Bank of China, the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, the State Taxation Administration, and the China Banking Regulatory Commission on this June 17:

I. To fully understand the significance 

1. The implementation of pilot program of Renminbi settlement of cross-border trade transactions is an important measure adopted by the State under the new situation with the purpose of facilitating the enterprises’ foreign trade activities. Since the occurrence of the international financial crisis, the global economic and financial situation has undergone profound changes which have brought severe challenges to enterprises’ operation and trade activities. The pilot program of Renminbi settlement of cross-border trade transactions helps meet the requirements of domestic and overseas enterprises on using Renminbi as the settlement currency in cross-border trade transactions and related business, and promotes the steady and healthy development of foreign trade.

2. The promotion of the development of Renminbi settlement of cross-border trade transactions and related business is the practical needs of changing the economic development pattern and adjusting the economic structure in Shanghai. At present, Shanghai is in the critical period of changing the economic development pattern and adjusting the economic structure. The act of actively encouraging and supporting the development of Renminbi settlement of cross-border trade transactions and related business helps improve the service capabilities of financial institutions and relevant service agencies in Shanghai, and adds new impetus to Shanghai’s future development.

3. The promotion of the development of Renminbi settlement of cross-border trade transactions and related business is the internal requirement of constructing Shanghai into an international financial center and an international trade center. To strengthen its influence capacity and competitiveness is an important task of constructing Shanghai into an international financial center and an international trade center. By promoting the development of Renminbi settlement of cross-border trade transactions and related business, the Renminbi capitals shall be encouraged to gather in Shanghai, and the innovation of relevant financial business and products shall be expedited; the development space for import & export enterprises and trade intermediary agencies in Shanghai shall be extended, and the transfer service capabilities of Shanghai international trade center shall be enhanced.

II. To actively carry out business innovation

4. To lift controls over the export enterprises using Renminbi in cross-border settlement in accordance with relevant state policies, so as to meet the requirements of more enterprises for Renminbi settlement in their foreign economic activities.

5. To encourage cross-border payment and settlement business of Renminbi under the service trade so as to strongly support the development of modern service industry.

6. To encourage Renminbi settlement in international bidding business. To actively promote the adoption of Renminbi settlement in government procurement where import products are involved.

7. To encourage banks to open Renminbi balance accounts for overseas enterprises and institutions, and provide related business thereof. To simplify the formalities for overseas enterprises and institutions to open domestic Renminbi balance accounts, and expand the account’s capital sources and their scope of use.

8. To encourage banks stationed in Shanghai to directly carry out cross-border Renminbi financing business through overseas branches or overseas agencies.

9. To encourage banks and enterprises to pilot certain Renminbi settlement business under the capital account. Banks and enterprises may pilot such Renminbi settlement business under the capital account that is closely related to trade activities as cross-border Renminbi project financing, cross-border direct investment in Renminbi, etc., under the premises of complete schemes and controllable risks. Those overseas investment projects in Renminbi that meet certain conditions may enjoy support from special funds of this Municipality for the development of relevant industry in accordance with the relevant provisions.

10. To actively support the exploration of new channels of Renminbi cross-border business. To further explore the feasibility of cross-border Renminbi settlement in such fields as using foreign capitals, importing bulk commodities, or providing foreign aid, and to pilot, in priority, projects urgently required by the market and with normalized business operation so as to continuously explore new channels of Renminbi settlement.

III. To conscientiously strengthen the organization and leadership

11. All district/county people’s governments shall bring into full play the role of organization and leadership, coordination and promotion, and establish and improve the promotion mechanism for Renminbi settlement of cross-border trade transactions and related business. Relevant commissions, offices, and bureaus of the Municipal People’s Government shall take initiatives in supporting related work, study and solve problems encountered in pilot program in a timely manner.

12. To do a good job in publicity and training on cross-border Renminbi settlement business.  To strengthen the publicity to the whole society on cross-border Renminbi settlement policies, and carry out series of training on cross-border Renminbi settlement policies step by step and at different levels. To encourage trade associations to use relevant channels to actively publicize cross-border Renminbi settlement.

13. To facilitate enterprises in handling business. Where the taxpayer provides complete materials and meets the drawback conditions, the competent administrative department of taxation shall complete the examination and verification within 20 working days from the date of accepting the enterprise’s application for drawback, and feed back the examination and verification result to the enterprise. The customs shall continuously push forward the reform of custom clearance, so as to optimize the custom clearance environment.

14. To make a study of the policies and measures on encouraging enterprises to conduct cross-border Renminbi settlement to promote the development of Renminbi settlement of cross-border trade transactions.