China's economy, forex administration advance toward higher-standard opening-up

China is advancing high-standard opening-up, a move that is not only strengthening its own development momentum and resilience, but also injecting greater stability and certainty into the global economy, according to a signed article by Zhu Hexin, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange.

Writing the article in China Forex magazine, Zhu said China's opening-up has steadily advanced to a higher level, marked by wider scope, stronger momentum and an improved structure.

The article comes as China steps up efforts to expand high-standard opening-up during the 15th Five-Year Plan period (2026-30), saying that the country's foreign exchange administration will be further improved to expand cooperation space, with enhancing capital account opening as one of the priorities.

It coincided with the 30th anniversary of China achieving current account convertibility, a significant step in foreign exchange sector opening-up and a milestone in the country's broader opening agenda.

In 1996, China accepted Article VIII of the Articles of Agreement of the International Monetary Fund, committing to renminbi convertibility under the current account and refraining from imposing restrictions on payments and transfers for current international transactions, including trade in goods and services as well as investment income, etc.

"Since then, China has pursued a prudent and orderly approach to continuously advancing capital account convertibility," Zhu said. "Today, over 90 percent of China's capital account items have been opened to varying degrees, achieving an organic coordination of opening, reform, development and security."

New heights of opening-up

More broadly, Zhu said that China's opening-up has advanced to higher levels over the past decades, with the areas of opening having expanded from trade in goods to wider international economic and trade cooperation.

Trade in services has emerged as a new engine, Zhu wrote. According to balance of payments data, the country's total trade in services exceeded $1 trillion last year.

By proactively expanding services imports, China has ranked as the world's second-largest importer of services for 13 consecutive years, with imports of services reaching $622.8 billion last year, accounting for roughly 8 percent of the global total.

China's exports of services totaled $384.7 billion last year, with travel services revenues up 37 percent year-on-year to $55.2 billion, a record high, reflecting the growing appeal of inbound tourism and the effectiveness of facilitation policies.

Building on trade flows, China and the rest of the world increasingly share assets and development gains, Zhu said. International investment position data show that China's external financial assets and liabilities stood at $11.8 trillion and $7.7 trillion by end-2025, respectively, up 33 percent and 17 percent from end-2020.

Meanwhile, Zhu said that drivers of opening-up have shifted from policy incentives to a dynamism jointly built and shared by all kinds of entities, enabling mutually beneficial and win-win cooperation.

"In foreign trade, private enterprises have remained China's largest trade player for seven consecutive years, with their share in the country's total trade rising from 6 percent in 2001 to 57 percent in 2025," he said.

Foreign-invested enterprises continue to leverage China's manufacturing strengths to support global production and sales networks, Zhu said, with their trade surplus growing by about 20 percent in 2025, outpacing other market participants.

Private enterprises have maintained a leading share in outward direct investment. On the inbound side, returns on foreign direct investment in China have consistently ranked among the highest across major economies, he said.

Amid a new wave of global asset reallocation, Zhu said foreign institutional investors have expanded their investments in China, showing "a steadily rising willingness to allocate to RMB assets".

Holdings of onshore bonds by overseas investors now total around $500 billion, while their holdings in onshore shares account for roughly 4 percent of total market cap, official data showed.

Zhu added that the focus of opening-up has shifted from scale expansion toward more balanced coordination in trade and two-way investment, pointing to an improvement in structure.

China has proactively increased imports to promote balanced development between imports and exports, and has hosted the China International Import Expo for eight consecutive years, sharing the opportunities of its ultra-large market with countries around the world.

Two-way investment cooperation was expanded as well. China's ODI stock had reached $3.6 trillion by end-2025, comparable to the $4 trillion in FDI stock. Two-way portfolio investment flows are similarly balanced, with outward holdings at $2 trillion and inward holdings at $2.4 trillion.

Institutional opening-up of forex sector

Zhu said that during the 15th Five-Year Plan period, China will further promote high-standard, institutional opening-up in the foreign exchange sector to foster a new landscape of win-win cooperation, with capital account opening being one focus.

Following the achievement of basic convertibility for direct investment, China has significantly streamlined registration procedures, expanded the usage scope of FDI funds and eased forex account management. Caps on early-stage expenses for ODI have also been lifted.

In cross-border financing, more than 70 percent of external debt registrations are now handled by banks. In securities investment, a multitiered financial market opening framework has taken shape, with new quotas for the Qualified Domestic Institutional Investor program recently issued to better meet domestic demand for cross-border investment.

Zhu highlighted fresh progress in facilitating multinationals' cross-border capital pooling.

A policy framework integrating domestic and foreign currencies has been established, benefiting more than 1,100 multinational corporations and about 19,000 member enterprises, involving over $2 trillion in cross-border receipts and payments.

The high-end version of the capital pooling policy for large multinationals has been expanded nationwide. This policy, he wrote, will soon be extended to a broader group of medium-sized multinationals nationwide, better meeting their cross-border fund management needs.

In the coming five years, Zhu said SAFE will place greater emphasis on institutional opening, continuously improve the coordination and alignment of capital account opening with economic and financial development and reform, as well as RMB internationalization.

"For items already opened, we will promote clearer management frameworks, more unified rules and more streamlined procedures, thus fostering more stable expectations," Zhu said.

"For areas where conditions permit, we will calibrate the pace and intensity of opening, better serving technological innovation, the real economy and long-term capital allocation."

SAFE also stressed adopting a service-oriented approach to make genuine and compliant foreign exchange receipts and payments more convenient and efficient.

Over the past five years, the number of administrative approvals handled by SAFE has declined by over 70 percent, while the number of enterprises eligible for streamlined processing of forex transactions based on strong credit records has increased more than fivefold.

In 2025, enterprises utilized forex derivatives to manage exchange rate risks to the tune of over $1.9 trillion, with the corporate hedging ratio rising to 30 percent.

Looking ahead, Zhu said that SAFE will adhere to the principle of "greater integrity, greater convenience; and the compliant go faster". Forex market infrastructure will be further enhanced to help all types of market entities better allocate foreign exchange resources and manage exchange rate risks.

Zhu added that SAFE will continue to enhance regulatory and risk prevention capabilities under open conditions, upholding security as the bottom line.

"Recently, amid a more complex external environment and heightened volatility in international financial markets, trading in China's foreign exchange market has remained active, with forex supply and demand broadly balanced and overall market expectations stable," Zhu said.

In a world becoming more complex and uncertain, he concluded, opening-up has assumed even greater significance for promoting cooperation, stabilizing expectations and enhancing shared interests.

Zhu said China will continue to establish forex administration systems and mechanisms that are "more convenient, more open, more secure and more intelligent", working with all parties to expand cooperation space, share development opportunities and jointly address challenges.