FINANCE

Caixin Explains: What Hainan’s EF Accounts Mean for Cross-Border Capital Flows in China

Published: Dec. 18, 2025 3:52 p.m. GMT+8

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Haikou Port in Hainan province, Dec. 17, 2025. Photo: VCG

China has put into operation a new mechanism for managing cross-border capital flows in Hainan, centered on a free trade account known as the electronic fence (EF).

For multinational companies and financial institutions, the EF account system provides a practical way to move funds across borders under account-level rules, offering an alternative to quota, approval and registration requirements under China’s cross-border capital management framework.

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China launched EF accounts in Hainan in May 2024, allowing simplified cross-border fund transfers under the Free Trade Port framework.
By October, 658 EF accounts were opened across 11 banks, with flows totaling 268.9 billion yuan ($38.2 billion), involving 80 countries and regions.
EF accounts offer fewer restrictions for overseas transfers but have usage limits, prohibiting certain investments and non-business-related activities.

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