China is advancing reform in foreign exchange business to streamline procedures and provide operational guidance for enterprises, with six supporting rules released on Friday to further define the rules and standards for key aspects of bank operations.
The reform has effectively helped foreign trade enterprises save time in processes and improve business efficiency, according to Cheng Siyuan, a financial staff member at the Hiking comprehensive foreign trade service platform in Qingdao City of east China's Shandong Province.
Cheng's main job is to handle foreign exchange transactions for small and medium-sized foreign trade enterprises.
"I need to process 68 foreign exchange transactions today. I only need to issue the receipt and payment instructions online, and submitting an application for each transaction takes just a few seconds. The bank can complete the process in a few minutes if it's efficient. Now, most transactions are submitted and completed on the same day," said Cheng.
Since the launch of the foreign exchange business reform, high-quality enterprises with stable operating conditions and high credibility can process certain foreign exchange transactions online.
Data show that by the end of November, 10 commercial banks across China had joined in the foreign exchange business reform, covering 31 provinces, autonomous regions, municipalities directly under the central government, and five cities with independent budgetary status. Over 15,000 high-quality clients, including small and medium-sized enterprises and private companies, have been included.
"Banks no longer need to conduct audits and verifications one by one on every foreign exchange transaction while cooperating with these enterprises. The average processing time has been shortened by 50 to 75 percent. Additionally, banks can innovate and customize various facilitation services and products based on the client's risk level, allowing for a more precise alignment with customer needs," said Li Bin, deputy head of the State Administration of Foreign Exchange.
Forex business reform improve efficiency, provides guidance for firms
Continued surges in global oil prices, a result of the ongoing U.S.-Israeli military strikes against Iran, will put severe pressure on Japan's heavily energy-import-dependent economy, a Japanese scholar warned.
The warning came as the Japanese government started a historic oil reserve release on Monday to ease the impact of volatile international oil prices. The release totaled around 80 million barrels, equal to roughly 45 days of Japan's domestic oil consumption, marking the largest-ever drawdown of the country's oil reserves.
Tomohiko Nakamura, a professor of the Faculty of Economics at Kobe International University, said that while the reserve release will have a limited effect in curbing oil price hikes, protracted geopolitical tensions in the Middle East will undermine the policy's impact given Japan's finite oil stockpiles.
"I believe the release of oil reserves will have a certain effect in curbing oil price hikes. However, if the tensions in the Middle East become protracted, that will pose a problem as Japan's oil reserves are not unlimited. We are facing a double whammy: on one hand, crude oil prices are rising, and on the other, the yen's depreciation is driving up import costs. The impact of soaring crude prices is being felt not just in Japan, but across the world. For example, the power sector, where a large share of electricity generation still relies on oil, will see higher generation costs, and as a result, nearly all industries will be affected. These unforeseen impacts may gradually become apparent over the next month," he said.
Beyond the immediate macroeconomic pressures, Nakamura expressed particular concern for Japan's small and medium-sized enterprises (SMEs), which form the backbone of the country's economic activity.
"The biggest impact is the sharp rise in raw material and fuel costs. While large corporations can reduce costs through bulk purchasing, SMEs find it difficult to achieve the same. As a result, the operating pressures on SMEs will grow increasingly severe, leading to a probable rise in the number of businesses exiting the market. The trend of declining SME numbers could accelerate further," he said.
Soaring oil prices put severe pressure on Japan's economy: Japanese scholar
