Laws of the People's Republic of China

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Domestic Institutions Using Renminbi as Pricing Currency in Foreign Trades

HuiFa [2003] No.29

March 3, 2003

Branches and foreign exchange administration departments under the State Administration of Foreign Exchange in provinces, autonomous regions and municipalities directly under the Central Government, and branch administrations of Shenzhen, Dalian, Qingdao, Xiamen, Ningbo; and Chinese-capital designated banks of foreign exchange:

In response to requests from some domestic institutions to use Renminbi as pricing currency in foreign trade agreements and with a view to promoting smooth development of foreign trade and to further strengthening capacity of international competition of domestic institutions by adopting more flexible method of settlement in foreign trade transactions, the Circular on relevant provisions is hereby issued after consideration:

I.

The domestic institutions may use Renminbi as pricing currency in signing import/export contracts.

II.

Where domestic institutions use Renminbi as pricing currency in export contracts, the foreign exchange shall be duly collected in whole at the exchange rate quoted by the bank on the date of settlement in the course of handling procedures of collecting export foreign exchange earnings.

III.

Where domestic institutions use Renminbi as pricing currency in import contracts, the payment to foreign party shall be made in foreign exchange in any of the currency listed by domestic banks after converting the amount of Renminbi stipulated in the contract at the exchange rate quoted by the bank on the date of settlement in the course of handling procedures of payment to foreign parties under the import business.

IV.

Where domestic institutions use Renminbi as pricing currency in contracts and in making Customs declarations, they shall handle verification procedures for export collection and import payment of foreign exchange in accordance with relevant regulations.

V.

The Circular shall enter into force as of the date of its promulgation.

Upon receipt, all branches shall promptly transmit the Circular to their respective subordinate sub-branches and concerned units while all Chinese-capital designated banks of foreign exchange shall promptly transmit it to their branches and sub-branches. Please feedback timely to the State Administration of Foreign Exchange any problems encountered in the course of implementation of the Circular.