(Yicai) Dec. 17 -- China will deepen reform and opening-up in the foreign exchange field to support long-term capital inflows and sustain the economic recovery, according to the forex regulator.

The State Administration of Foreign Exchange announced at a meeting yesterday that it will steadily broaden the institutional opening of China’s financial markets.

The SAFE also plans to encourage the inflow of medium- and long-term capital, introduce innovative foreign exchange policies in free trade zones, support regional development strategies, and advance the transformation of Shanghai and Hong Kong into global financial hubs.

The regulator will promote reforms in banks’ forex services and optimize the policy environment to serve the real economy, support tech-driven businesses and emerging foreign trade models, such as transborder e-commerce and overseas warehousing, and deepen reforms in foreign direct investment to steady foreign trade and investment, it said.

To prevent and control risks, the SAFE will refine its ‘macro-prudential + micro-regulation,’ keep the exchange rate stable, ensure balance in international payments, enhance off-site regulation, and crack down on illegal activities such as shadow banking, it added.

At the meeting, the SAFE also pledged to improve the management of foreign exchange reserves to ensure their security, liquidity, and the appreciation of the reserve assets.

Lastly, the SAFE said it would closely monitor changes in the international financial markets, refine policies and measures to build a sound forex environment for the economy's high-quality development, continue to enhance communication with market entities, respond to market concerns in a timely manner, and stabilize market expectations.

The long-term positive fundamentals of China's economy remain unchanged, the SAFE noted.

Editor: Futura Costaglione