The Pingtan Comprehensive Pilot Zone (PCPZ) has become the first place in Fujian province to try out a voluntary exchange system, which is thought to be conducive to attracting foreign investment.

The State Administration of Foreign Exchange (SAFE) approved Pingtan and 15 other regions to pilot the trials on July 4.

The volutary exchange system is an innovative move in the management of foreign exchange (FX). Once it has received verification of its foreign exchange capital, a foreign-funded enterprise can apply for FX-RMB settlement at designated banks at any time it chooses.

All of an enterprise’s foreign exchange capital in its capital account can be subject to the settlement if the enterprise chooses to adhere to the mechanism.

Additionally, a foreign-funded company will have to open a bank account to manage the Chinese currency it gets from the FX-RMB settlement and proceed with all kinds of payment procedures through using this account.

The move, which is part of the financial reform endorsed by the SAFE in Pingtan, will satisfy the needs of capital operations by local foreign enterprises, and facilitate them to carry out the business of equity investment on the Chinese mainland while removing the FX risk, the Pingtan Times commented.