According to statistical data released by the State Administration of Foreign Exchange (SAFE), in November 2011 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD128.9 billion and USD129.7 billion, respectively. The deficit in foreign exchange settlement and sales by banks on behalf of clients amounted to USD800 million. For the first eleven months of 2011, the cumulative amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD1455.3 billion and USD1072.2 billion respectively. The surplus of foreign exchange settlement and sales was USD383.1 billion.
In November 2011, foreign-related receipts and payments by domestic banks on behalf of clients amounted to USD210.8 billion and USD192.9 billion, respectively, and the surplus of foreign-related receipts and payments reached USD17.9 billion. For the first eleven months of 2011, the cumulative foreign-related receipts and payments by banks on behalf of clients amounted to USD2107.5 billion and USD1830.7 billion respectively; and the surplus of the cumulative foreign-related receipts and payments reached USD276.8 billion.
Annex: Glossary and relevant definitions
The Balance of Payments refers to all economic transactions occurring between residents and non-residents in China, including all financial transactions and barter transactions resulting in changes in the assets and liabilities of the residents and non-residents.
Foreign exchange settlement and sales by banks on behalf of clients refers to the business of foreign exchange settlement and sales conducted by designated foreign exchange banks for their clients, excluding data on foreign exchange settlement and sales conducted by designated foreign exchange banks on their own behalf or data on inter-bank foreign exchange market transactions. The time when the conversion between the Renminbi and the foreign currency occurs is regarded as the time point for the statistics. Specifically, foreign exchange settlement refers to the sale of foreign exchange to designated foreign exchange banks by owners of foreign exchange; foreign exchange sales refer to the sale of foreign exchange by designated foreign exchange banks to users of foreign exchange. The differences between the foreign exchange settlement and sales are regarded as an offset balance, which will be balanced by the banks through transactions on the inter-bank foreign exchange market. This is the major reason for changes in the amount of foreign exchange reserves, which is not equivalent to the net change in foreign exchange reserves during the same period.
The principles for transactions between residents and non-residents do not apply to the preparation of statistics on foreign exchange settlement and sales by banks on behalf of clients, and such statistics only cover transactions of RMB and foreign currencies between the banks and their clients, namely, exchange transactions between RMB and foreign currencies that fall outside the category of the balance-of-payments statistics.
Foreign-related collections and payments by banks on behalf of their clients refers to the collections and payments between domestic non-bank resident institutions/individuals (collectively called the “non-bank section”) and non-resident institutions/individuals through domestic banks, exclusive of the collections and payments in cash or the foreign-related collections and payments by the banks themselves -- in particular, cross-border receipts and payments between non-bank sectors and non-residents through domestic banks (including RMB and foreign exchange), and domestic receipts and payments between non-bank sectors and non-residents through domestic banks (currently including receipts and payments in foreign exchange and receipts and payments in RMB under the RMB settlement item for cross-border trade). The statistics are collected at the time when the clients conduct the foreign-related receipts and payments at the domestic banks. Specifically, foreign-related receipts of banks on behalf of clients refer to funds collected by non-bank sectors from non-residents via domestic banks; external payments by banks on behalf of clients refers to funds paid by non-bank sectors to non-residents via domestic banks.
Although foreign-related receipts and payments of banks on behalf of clients are an integral part of the balance-of-payments statistics, the accounting method for the statistics, different from the accrual basis of the accounting required for the balance-of- payments statistics, is based on a cash basis. In addition, it merely reflects fund flows between the non-bank sectors and non-residents and does not include barter transactions and foreign transactions conducted by the banks themselves. Furthermore, the scope of the statistics on the foreign-related receipts and payments by banks on behalf of clients is smaller than the scope of the balance-of-payments statistics.
