Hainan: Recently, Sunrise Fuel (Hainan) Co., Ltd. completed a cross-border transaction settlement with an overseas client through its EF account in less than two hours in south China’s Hainan Province. It is a speed that would have been unimaginable in the past. “With the EF account, we can handle cross-border settlements entirely online through a one-stop process,” said Chen Qiuyi, financial director of Sunrise Fuel (Hainan) Co., Ltd. There is no need to verify each payment manually. Once a payment instruction is submitted online, the funds are transferred quickly and securely to the overseas recipient, Chen added.

According to Namibia Press Agency, domestic companies previously needed extensive documentation for U.S. dollar payments to overseas partners, often taking one to two working days. The EF account, short for Electronic Fence Account, has revolutionized this process. Officially known as the multi-functional free trade account, it was facilitated by the Hainan Branch of the People’s Bank of China. They established a cross-border capital flow management framework on April 3, 2024, and the EF account system went live on May 6, 2024.

The EF account has been praised as a “highway” for cross-border capital flows, crucial for the Hainan Free Trade Port (FTP). It integrates domestic and foreign currency accounts, using RMB as the primary currency while linking multiple foreign currencies like the U.S. dollar and euro under the same account. This integration eliminates the need for multiple accounts, significantly enhancing operational efficiency.

Ye Hong, general manager of the Transaction Banking Department at the Bank of China Hainan Branch, highlights that the EF account supports multiple freely convertible currencies and allows for settlements using offshore exchange rates. This flexibility enables enterprises to choose between onshore and offshore rates based on their needs.

The EF account is a significant innovation toward Hainan FTP’s goal of free and convenient cross-border capital flows. The island will officially launch special customs operations on Dec. 18 this year, marking China’s commitment to an open world economy. Wang Fanghong, vice chairman of the Hainan FTP Financial Society, emphasized the EF account’s role in advancing Hainan’s financial opening-up.

Currently, the EF account’s applications span cross-border trade settlement, foreign exchange transactions, loans, trade financing, and more. By the end of September, over 600 EF accounts had been opened, managing transactions with 76 countries and regions totaling over 200 billion yuan (28.24 billion U.S. dollars).