-
In order to encourage domestic institutions to go global, to satisfy the demand for policies concerning domestic credit support for overseas investment enterprises, and to further facilitate the process of trade and investment, the State Administration of Foreign Exchange has recently issued the Circular on Issues Concerning the Administration of External Guarantees Provided by Domestic Institutions (hereinafter referred to as the Circular), and the Circular shall come into force as of the date of its promulgation. The Circular mainly covers the following issues: first, relaxing the qualification requirements for the guaranteed party and expanding the business scope of the external guarantees. The banks shall provide external guarantees for the financing, and the guaranteed parties are free from limiting factors such as stock equities, a proportion of the net assets, and the profitability of domestic institutions. Where external guarantees are provided by non-bank financial institutions, the guaranteed parties shall be either corporate bodies legitimately registered within China or enterprises that are domestic institutions, pursuant to the procedures for overseas investments, incorporations, or the holding of shares, either directly or indirectly, overseas. Where external guarantees are provided by the enterprises, the guaranteed party may be an enterprise which the guarantor, pursuant to the prescribed procedures, incorporates, or holds shares of, either directly or indirectly, at home or overseas. Second, lessening the requirements for financial indexes of the guarantor as well as the profitability of the guaranteed party. If external guarantees are provided by the enterprises, the proportion of net assets to the total assets thereof uniformly shall be no less than 15 percent; the amount of the guaranteed partys net assets shall be positive, and the requirements for profitability will be changed from no losses permitted to profits within one of the past three years. (For long-term projects like resource development, profits achieved in at least one of the past five years may be allowed.) Third, making adjustments to the scope of administration and the method for verification of the balance quotas for external guarantees. All external guarantees for financing purposes provided by banks for domestic and overseas institutions shall be incorporated in the administration of the balance quotas. Upon arrival, the administration of the balance quotas may be carried out on the external guarantees for financing or non-financing purposes of non-bank financial institutions and enterprises. Theoretically, the balance quotas for external guarantees provided by the banks shall not exceed 50 percent of the bankspaid-in capital combined with RMB and foreign currencies or working capital, or shall not exceed the amount of their net assets in foreign currency; such provisions also apply to non-bank financial institutions. The balance quotas for external guarantees and/or the balance for external guarantees that are approved by the Foreign Exchange Administration on a case-by-case basis shall not exceed 50 per cent of their net assets respectively. Fourth, clarifying the administrative method for non-financing guarantees provided by banks. When furnishing non-financing external guarantees, the banks are not subject to the provisions on the proportion of net assets and the profitability of the guaranteed party, but either the guaranteed party or the beneficiary shall be the domestic institution or the overseas institution in which the domestic institution holds shares, directly or indirectly. Finally, abolishing the approval procedures for the banks external guarantee performance and clarifying procedures for the external guarantee performance for other entities. Banks may apply for external guarantee performances at their own discretion. Non-bank financial institutions and enterprises shall apply with the local Foreign Exchange Administrations for approval of external guarantee performances on a case-by-case basis, and such institutions and enterprises may purchase foreign currencies during the application process. With the streamlined administrative procedures for external guarantees and clarified administrative requirements, the Circular makes it more convenient for domestic institutions to go globaland delivers more efficient domestic credit support to overseas investment companies, thus enabling domestic financial institutions to better control risks. In the meantime, the Circular refines the risk-prevention mechanisms related to the external guarantees and optimizes the regularly-recorded external guarantee statements, thus paving the way for efficient statistical monitoring, risk warnings, as well as a risk-control system for the balance of payments. 2010-07-30/en/2010/0730/944.html
-
In recent years, the State Administration of Foreign Exchange (SAFE) has made great efforts to sort out the existing laws and regulations and in six batches has nullified 275 laws and regulations. Based on these achievements, the SAFE recently issued the Catalogue of the Major Currently Valid Laws and Regulations on Foreign Exchange Administration (as of the end of June 2010) (hereinafter referred to as the Catalogue). The Catalogue incorporates a total of 496 foreign exchange administration policies and regulations, including 5 administrative laws and regulations, 19 departmental rules, and 472 normative documents. The laws and regulations incorporated in the Catalogue are all in effect, wholly or mostly, including the administrative circulars and replies that the SAFE issued independently or in conjunction with other relevant authorities, relevant foreign exchange policies issued by the Peoples Bank of China, and judicial interpretations of the Supreme Peoples Court on foreign exchange administration. The Catalogue consists of nine major items, including general foreign exchange business, foreign exchange business under the current account, foreign exchange business under the capital account, foreign exchange business of financial institutions, the RMB exchange rate and the foreign exchange market, and the balance of payments statistics, which, in order to facilitate public inquiries, are further divided into some sub-items based on the specific types of business. The SAFE will further deepen the sorting out of existing laws and regulations, review and update the Catalogue, and constantly improve the transparency of related policies in a bid to facilitate the understanding and use of the foreign exchange laws and regulations by banks, enterprises, and individuals. 2010-07-13/en/2010/0713/940.html
-
Q11: Will China use its foreign exchange reserves as a trump card or as an atomic weapon? A: We have always emphasized our role as a responsible long-term investor. During the investment and operations of our foreign exchange reserves, we will strictly follow the rules of the market and the laws and regulations of the country concerned. Meanwhile, we will use the reserves as a financial investor and will not seek control over those investments. The investment and operations of foreign exchange reserves must be mutually beneficial; therefore, we let things run their natural course, so to speak, which means we will actively cooperate with those countries that welcome our investment. But if any country is doubtful, we will slow down and try to reach agreement through communications. As has been proven by the facts, the above concerns and worries are completely ungrounded. Q12: We know that the US fiscal deficit is surging, but what does that mean for the US dollar? A: Any prediction on trends for the US dollar must be based on the economic situation not only in the US, but also that in other countries. In the wake of the financial crisis, the US launched massive financial bailout initiatives, resulting in a mounting fiscal deficit and worries about a further depreciation of the dollar. However, we must bear in mind that the weakening of the dollar is also related to the currencies of other countries and regions, which have their own problems. Countries in Europe, for example, are deep in debt. As can be seen from recent developments, the US dollar is strengthening against some currencies, including the euro. From the end of 2009 to May 2010, for instance, the US dollar rose 20 percent against the euro. Going forward, whether the dollar will go up or down will depend on the prospects for an economic recovery in the US and the entire world, as well as on the economic policies of the major economies including those of the US. We hope that major global issuers of currency, the US in particular, will adopt responsible policy measures, fully take into account fiscal deficit pressures and threats of inflation, appropriately arrange an exit mechanism for the loose monetary policies, reduce reliance on debt expansionary policies, shoulder the responsibility and obligation to maintain currency stability, and protect the interests of investors. Q13: Will more or less of Chinas foreign exchange reserves go into US treasuries? A: The US treasury market is the largest of its kind in the world. Given its safety, liquidity, large market volume, and comparatively low transaction costs, for a long time it has been favored not by only domestic investors (over 50 percent of government debt is bought within the US), but also by international investors, including the major central banks throughout the world. As Chinas management of its foreign exchange reserves emphasizes safety, liquidity, as well as maintenance and added value, based on our needs and judgments, we tend to diversify our allocation of assets on international financial markets and the US treasury market is an important market. For a long time, there has been speculation whether China will buy more or less US treasuries with her foreign exchange reserves. It has even been stated that Chinas massive holdings of US dollar assets constitute a threat to the US. The truth is that using foreign exchange reserves to buy American treasury bonds is an investment behavior on the market, and the same is true for an increase or decrease in holdings. Fluctuations in economic cycles and changes in supply and demand, among other factors, can lead to ups and downs in treasury debt prices, and changes in other asset prices can also affect the comparative attractiveness of treasuries. Based on these observations, we have been closely following and analyzing various changes in the market and constantly making dynamic optimization and operational adjustments. This should not be interpreted politically. The outbreak of the recent financial crisis prompted the US to adopt monetary and fiscal stimulus policies, resulting in a sharp increase in the fiscal deficit and a greater share of outstanding national debt in GDP, hence producing worries about the safety of assets in the US. Chinas foreign exchange reserves are engaged in long-term diversified investment, with dynamic changes among different assets, in order to effectively control the overall risks, to allow sufficient liquidity, and to achieve overall stability of value. Meanwhile, China has been calling on the US to act as a responsible power by taking concrete measures to safeguard US and global economic sustainability, to protect the interests of investors, and to uphold their confidence. Q14: Are foreign exchange reserves mainly invested in relatively high-grade treasury bond assets? A: Foreign exchange reserves are mainly invested in financial products with relatively stable investment income and low risks, which mainly include assets related to governments, institutions, international organizations, and corporations in the developed and major developing countries, and mutual funds and various other products such as inflation-protected bonds and asset-backed securities. We need to take into consideration many factors in the allocation of our foreign exchange reserves and we do not merely buy products with high-grade investments. China now has more than two trillion dollars of foreign exchange reserves. With so much capital, many factors are taken into consideration when purchasing financial products, such as the market capacity of the invested products. If the treasury bonds of a nation enjoy high credibility and repayment capability, but are only several hundred million or several billion US dollars, and are traded mainly on the domestic market and are seldom available on the international financial market, then such products can hardly satisfy our investment demands. In addition, whether the assets risk-return characteristics and related functions can meet our portfolio investment needs and requirements for risk diversification, and efficiently withstand inflation are all important factors that need to be considered. Our foreign exchange reserves are a stable, responsible, and long-term investment in the international financial market and we never engage in speculation. Active speculators in the international financial market go after arbitrage opportunities, and some of them even take the initiative to create them. In contrast, foreign exchange reserves seek to maintain or increase the value of assets, putting the safety of the reserve assets at top of the agenda. All of these operational ideas are conducive to the stability of the international financial market. Q15: Are foreign exchange reserves invested in higher-risk financial products such as stocks and private equity? What is the size of such investments? A: We have strict investment standards and risk management procedures for the various assets that can be invested with foreign exchange reserves. When choosing varieties of investment, it is imperative to consider their safety, liquidity, long-term and short-term returns on investment, and other characteristics. Meanwhile, it is also necessary to take into account the correlations with other assets. Putting low correlated or negative correlated assets in the same portfolio can offset each other at different stages of the economic cycle, which is conducive to reducing the overall risk and to enhancing the flexibility of asset allocation and risk management. We do not rule out any investment products. But strict risk assessment and control are needed to decide upon which product we should invest in. In other words, according to the above-mentioned standards, it is necessary to determine whether the products are in line with the principles of safety, liquidity, and maintenance and increments of value of the foreign exchange reserves, and whether they can achieve the effect of risk diversification. As soon as they meet these standards, they will be included in our decision-making and risk management procedures. Q16: Is China considering further increasing its gold holdings? And when? A: Gold has many advantages, such as high international recognition, a good capability to maintain value, and an ability to make emergency payments. Meanwhile, investment in gold is subject to certain restrictions, which makes it impossible for gold to become our main channel for foreign exchange reserve investment. First, gold has a very limited market capacity. Annual global gold output is only 2,400 tons, and current demand and supply is basically balanced. If we buy gold on a large scale, the international price of gold will definitely be pushed up. When Chinese people go shopping malls to buy commodities like gold jewelry, they would be faced with rising prices, which would end up hurting the interests of our domestic consumers. Chinas gold price is generally in line with that of the world market. Second, gold prices fluctuate considerably. As the international price of gold is subject to the impact of the geopolitics of interest rates, supply-demand relations, and speculation, they often fluctuate sharply. In addition, gold does not bring interest income and bears the costs of storage, transportation insurance, and so forth. Based on the history of the past thirty years, the risk-return characteristics of gold are not that good. Gold is protected from inflation, but many other assets have this characteristic as well. Last, increasing gold holdings does not have a notable overall effect on the diversification of foreign exchange reserves. During the past several years, China has increased its holdings of gold reserves by over 400 tons, reaching total holdings of 1,054 tons. Even if this were to be doubled, it would only disperse thirty to forty billion US dollars of our foreign exchange reserves, raising the proportion of gold reserves by merely one to two percentage points. In general, we will take a prudent approach when considering whether to increase or decrease our gold reserves according to demand and the market. (To be continued) 2010-07-07/en/2010/0707/939.html
-
January 5, 2007 - In order to implement the Measures for the Administration of Individual Foreign Exchange and to standardize and facilitate the operation of foreign exchange business by banks and individuals, the State Administration of Foreign Exchange (SAFE) recently formulated the Detailed Rules on Measures for the Administration of Individual Foreign Exchange (hereinafter referred to as the Detailed Rules). A SAFE spokesperson answered questions from reporters on issues of concern in various circles: Q: What ideas of the Administration Department have been embodied in the formulation of the Detailed Rules? A: When formulating the Detailed Rules, the following features have been mainly taken into account: first, to encourage foreign exchange held by the common people,to support the reasonable and lawful holding and use of foreign exchange by individuals, to realize balanced management, and to actively promote an equilibrium in the balance of payments; second, to maintain the principles of keeping pace with the times and management innovation so as to constantly adapt to the developments and changes in the market and to facilitate the operations of banks and individuals; third, to abide by the principle of due consideration to both public and private interests, to steadily strengthen and improve management of individual foreign exchange receipts and payments, and to perfect supervision of cross-border capital flows and transactions; fourth, to observe the principle of paying equal attention to being flexible and strict, to exercise effective supervision by relying on modern measures, and to implement practical policy and supervision adjustments. Q: It is stipulated in the recently promulgated Measures for the Administration of Individual Foreign Exchange that management of an annual quota shall be applicable to individual foreign exchange sales and domestic individual foreign exchange purchases, and it is specified in the Detailed Rules that the respective annual quota shall be USD 50,000. What are the main policy considerations behind this requirement? A: Management of an annual quota is an important aspect of the adjustment in the individual foreign exchange administration policy. The related formalities and vouchers for foreign exchange sales and purchases within the quota will be drastically simplified and facilitated, and examination of the authenticity of transactions exceeding the quota shall be strengthened. The Detailed Rules specify that the annual quota for individual foreign exchange purchases be drastically raised from USD 20,000 to USD 50,000, which can better serve the demands of domestic individuals for foreign exchange and the holding of foreign exchange by the common people. At the same time, the application of management of an annual quota on sales of foreign exchange for both domestic and foreign individuals changes the past administration mode of easy in and difficult out,and embodies the principle of balanced management of capital inflows and outflows. The annual quota of USD 50,000 for individual foreign exchange sales will basically satisfy the normal demands for individual foreign exchange sales and will contribute to controlling illegal capital inflows across the border through individual channels. To prevent acts of avoiding administration, such as repeated purchases of foreign exchange and foreign exchange sales in installments, and to ensure the effectiveness of the management of an annual quota, the SAFE has established a management information system connecting banks with the SAFE for individual sales and purchases of foreign exchange. Via this system, banks shall deal with the business of individual foreign exchange sales and purchases and verify the authenticity of the materials provided by individuals. In addition, this system provides a unified and standard operating platform for the banks to deal with such business, thus it is conducive to fair competition among banks, while individual foreign exchange sales and purchases will not be limited by regions or banks and the conduct of relevant business will become more convenient. Q: It is specified in the Detailed Rules that an individual engaging in foreign trade activities may open a foreign exchange settlement account. What additional conveniences will this policy bring to individual foreign trade? A: To embody the principle of giving full conveniences to business-based foreign exchange receipts and payments under the individual trade account, the Detailed Rules specify that individual trade businessmen and private businessmen may open foreign exchange settlement accounts, which shall be administrated as institutional accounts and may be used for foreign exchange sales and receipts and payments for imports and exports by direct trading or through agents. Unlike individual foreign exchange savings accounts and foreign exchange items under the capital account, the purchases and sales of foreign exchange under the foreign exchange settlement accounts are not subject to the limits of the annual quota, and the business shall be conducted with valid trading documents regardless of the amount. In addition, capital transfers for individual foreign exchange savings accounts shall only be conducted between accounts of the same nature held by the individual or his/her direct relatives, and any transfers of foreign exchange items under the capital account shall be subject to examination and verification. However, after opening a foreign exchange settlement account, private businessmen may carry out capital transfers with their entrusted agent enterprises which are not limited to the account openers. These regulations, while providing full support and conveniences to individual foreign trade, are beneficial to the statistics and monitoring of foreign exchange receipts and payments under individual trade and may promote the healthy and orderly development of individual trade activities. Q: While offering sufficient facilities to business-based foreign exchange activities under the current account, how is the concept of supervision reflected in the Detailed Rules for strengthening the authenticity of verification for non-business-based foreign exchange activities under the current account, such as individual donations and family maintenance remittances? A: Management of foreign exchange receipts and payments under individual current accounts according to their business-based and non-business-based nature is an important content of the adjustment in the individual foreign exchange administration policy at this time. The general principle in the administration of non-business-based foreign exchange receipts and payments under the individual current account is to exercise, on the basis of the convertibility of the items under the current account, management of an annual quota on purchases and sales of foreign exchange. Within the total annual quota, individuals can directly handle the formalities in the banks with their valid identity documents. There are specific requirements of authenticity and validity for foreign exchange receipts and payments beyond the quota for one-sided transfer items with concentrated foreign exchange inflows, such as individual donations, family maintenance remittances, and inheritances. Acceptance by individuals of overseas donations shall satisfy the relevant regulations of the State, and sales of foreign exchange shall be carried out only after notarized donation agreements or contracts are provided. Foreign exchange sales for family maintenance remittances can be carried out only after relevant certificates are provided, such as direct relative relationship certificates or notarized supporting relationship certificates, and relevant income certificates of the overseas payers such as bank deposit certificates and tax payment certificates for individual income. Foreign exchange sales for inheritances can be carried out only after presenting the relevant certificates such as legal documents or notarial deeds regarding the inheritance. Q: How do the Detailed Rules specifically regulate foreign exchange receipts and payments under the individual capital accounts? A: The following principles of administration on individual capital accounts are embodied in the Detailed Rules: first, in line with the overall requirement of the convertibility progress, the restrictions on foreign exchange transactions under individual capital accounts shall be lifted in an orderly, gradual, and in a controlled manner; second, an equilibrium in the balance of payments shall be promoted and individuals shall be supported to lawfully and reasonably participate in direct investments and investments in financial products such as securities, and current portfolio investments shall be dealt with through qualified domestic or foreign institutional investors; third, formalities shall be simplified, procedures standardized, transactions facilitated, and the transparency of supervision improved; fourth, transactions which have a substantial impact on the equilibrium in the balance of payments and the stability of the exchange rates shall be watched and the opening-up will be cautious to effectively guard against risks. Q: In the past, individual foreign exchange accounts were divided into note accounts and exchange accounts. It is now stipulated in the Detailed Rules that individuals may open foreign exchange savings accounts. Does this mean there will no longer be a distinction between note accounts and exchange accounts? A: This question can be understood in two ways. On the one hand, from the perspective of foreign exchange administration, individuals may open foreign exchange savings accounts in banks with valid identity documents for non-business-based individual foreign exchange receipts and payments, and there will not be any different foreign exchange administration policies for note accounts and exchange accounts, and unified supervision standards shall be applied for capital deposits, foreign exchange sales, outward remittances, domestic transfers, and cash withdrawals. On the other hand, from the perspective of bank operations, since the operational costs for foreign cash and spot exchange differ, the banks may differentiate depositors into cash depositors and exchange depositors, and adopt different charging standards or buying and selling rates for them; this pertains to the business operations of the banks themselves. Q: In various places in the Detailed Rules there are still many special supervisory requirements for the deposit, withdrawal, and remittance of foreign cash. What are the considerations behind these requirements? A: According to the related stipulations to oppose money laundering and the requirements to combat illegal foreign exchange transactions, the Detailed Rules further strengthen administration over the trading of foreign cash, which mainly includes: in cases where an individual deposits his/her foreign cash into his/her foreign exchange savings account, with a cumulative daily amount or equivalent exceeding USD 5,000, he/she shall handle it at a bank with relevant documents; in cases where an individual withdraws foreign cash with a cumulative daily amount or an equivalent exceeding USD 10,000, he/she shall file related documents in advance with the SAFE; in cases where an individual carries foreign cash abroad with a cumulative daily amount in excess of an amount equivalent to USD 10,000, he/she shall additionally provide relevant declaration forms signed and sealed by the customs or his/her bank forms for the withdrawal of the foreign cash from the original deposit bank. Because foreign currency pricing, settlement, and circulation are forbidden within the territory of the PRC, legitimate foreign cash resources and uses mainly include cross-border foreign exchange inward and outward remittances, domestic foreign currency transfers and withdrawals, as well as carrying foreign cash for persons entering and exiting the territory, which comply with the relevant provisions. From the perspective of international experience, the strengthening of administration of cash transactions is a principle commonly adopted by the supervision departments of the various countries, and it shall also be a key area of foreign exchange supervision in China . 2007-01-05/en/2007/0105/819.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange settlement and sales and banks' foreign-related receipts and payments for customers for May 2019. SAFE Press Spokesperson and Chief Economist Wang Chunying answers media questions on foreign exchange receipts and payments for May 2019. Q: What changes occurred in China’s foreign exchange receipts and payments in May 2019? A: In May, China's foreign exchange receipts and payments remained stable with good momentum, and the operation of the foreign exchange market remained stable. Based on relevant data, firstly, banks’ settlement and sales of foreign exchange registered a surplus. In May, banks’ foreign exchange settlement rose 4% from April, while banks’ foreign exchange sales fell 7%, recording a surplus of USD 6.2 billion. Secondly, the deficit of banks’ foreign-related receipts and payments for customers narrowed. In May, enterprises, individuals and other non-banking sectors recorded a deficit of USD 6 billion in foreign-related receipts and payments, narrowing by 23% month on month. Thirdly, the balance of foreign exchange reserves rebounded to certain extent, reaching USD 3,101 billion at the end of May, an increase of USD 6.1 billion month on month. Market expectations have been stable as a whole since May, with positive changes in cross-border capital flows through major channels. In May, market players’ willingness to settle foreign exchange rose and their willingness to buy foreign exchange remained stable. In particular, the foreign exchange settlement rate that measures the willingness to settle foreign exchange, or the foreign exchange sold by customers to banks as a percentage of their foreign-related foreign exchange income, was 70%, up by 4 percentage points month on month. The foreign exchange sales rate that measures the willingness to buy foreign exchange, or the ratio of foreign exchange purchased by customers from banks to the customer's foreign-related foreign exchange payments was 68%, basically the same month on month. The contracted surplus of forward settlement and sales of foreign exchange was USD 19.2 billion, up by33% month on month. In this context, cross-border capital flows through major channels remained stable and showed positive changes. First, banks maintained a certain scale of surplus in the settlement and sales of foreign exchange and foreign-related receipts and payments of trade in goods on behalf of clients, registering an increase from April. Second, the foreign exchange settlement of capital in foreign direct investment registered an increase, the foreign exchange purchases with capital in ODI were stale with a slight decline, and the surplus of foreign exchange settlement and sales of direct investment increased. Third, the purchase of foreign exchange with investment income by enterprises was normal and orderly, which registered a month-on-month increase due to seasonal factors but was lower than that of the same period last year. Fourth, net foreign exchange purchases by individuals continued to decrease in May, down by 28% year on year and 19% month on month respectively. Despite the complex and volatile external environment, China's economy has been running smoothly on the whole, showing strong resilience and great potential. The ongoing progress in reform and opening-up, ample macro policy space and high market confidence has provided strong fundamental support for the stability of the foreign exchange market. Meanwhile, in recent years, the RMB exchange rate formation mechanism has been constantly refined. As the bidirectional floating of foreign exchange rate has become more flexible, the risk management awareness and adaptability of market players have witnessed obvious improvement. The changes of foreign exchange receipts and payments data in May adequately reflect the increasing maturity and rationality of China’s foreign exchange market, which is expected to better stand all kinds of tests in the future. 2019-06-20/en/2019/0620/1517.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the preliminary data in the Balance of Payments for the first quarter of 2019. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues. Q: Could you brief us on the characteristics of the balance of payments for the first quarter of 2019? A: On the whole, in the first quarter of 2019, China’s balance of payments maintained basic equilibrium, registering a surplus in the current account, continuous net inflow of direct investment and securities investment and steady increase of reserve assets. The foundation for the overall equilibrium of balance of payments in the future remains solid. First, the surplus of trade in goods remains the basis for the current account surplus. In the first quarter, the current account recorded a surplus of USD 58.6 billion, with a surplus of USD 94.5 billion under trade in goods in the Balance of Payments, up by 83% year on year. To be specific, export of goods was USD 540.4 billion, up by 2% year on year, and import of goods was USD 445.9 billion, down by 7% year on year. Second, the deficit under trade in services shrank. In the first quarter of 2019, the deficit under trade in service was USD 63.4 billion, down by 14% year on year. Tourism and transport remain the major deficit items. Specifically, tourism posted a deficit of USD 57.6 billion, down by 9% year on year; the deficit in transport services was USD 12.5 billion, down by 14%. Third, direct investment and securities investment maintained net inflow. In the first quarter of 2019, the net inflow of direct investment reached USD 21.4 billion, which is mainly resulted from the net inflow of FDI of USD 44 billion and net outflow of China’s ODI of USD 22.6 billion. According to incomplete statistics, in the first quarter of 2019, China’s net inflow under securities investment was about USD 15 billion registering sustained year-on-year growth. Fourth, reserve assets continued to increase slightly, resulting in an adaptive equilibrium in the balance of payments. In the first quarter of 2019, China's reserve assets rose by USD 10 billion as a result of the BOP transactions (excluding the impact of non-transaction factors such as exchange rate and price), among which, foreign exchange reserves increased by USD 10 billion. 2019-05-10/en/2019/0604/1513.html
-
Q: The latest data on foreign exchange reserves disseminated by the State Administration of Foreign Exchange (SAFE) show that China's foreign exchange reserves as of the end of May 2019 rose by USD 6.1 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of May 2019, China posted USD 3.101 trillion in foreign exchange reserves, up by USD 6.1 billion or 0.2% month on month. In May, the US dollar index and global bond index rose as multiple factors such as escalating global trade friction and uncertainty over Brexit pushed up the risk aversion. Due to the combined impact of exchange rate translation and asset price changes, China’s foreign exchange reserves rose slightly. Since the beginning of this year, China's economy has been stable on the whole and moderately improving. The supply and demand of China's foreign exchange market have been basically balanced. Cross-border capital flows through major channels remained stable, and foreign exchange reserves grew steadily. Going forward, there will be still many political and economic uncertainties in the world, and the international financial market may become increasingly volatile. However, thanks to the adequate resilience and huge potential of China’s economy as well as the constantly improved capabilities of coping with external shocks, the long-term positive trend of China’s economic development will not change. China's sound economic fundamentals will provide strong support for the smooth operation of the foreign exchange market and provide a solid foundation for the overall stability of the foreign exchange reserves. 2019-06-10/en/2019/0610/1516.html
-
Q: The latest data on foreign exchange reserves disseminated by the State Administration of Foreign Exchange show that China's foreign exchange reserves as of the end of April 2019 declined by USD 3.8 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of April 2019, China posted USD 3.0950 trillion in foreign exchange reserves, down by USD 3.8 billion or 0.1% month on month. China's foreign exchange market performed stably in April. On the international financial market, the US dollar index rose slightly by 0.2%, while the global bond index remained basically unchanged. Due to the combined impact of exchange rate translation and asset price changes, China’s foreign exchange reserves fell slightly. Due to the slowdown in the growth of global economy and international trade, China’s economy has been operating within a reasonable range since the beginning of this year. Market expectations and confidence have been boosted, supply and demand at the foreign exchange market has maintained basic equilibrium, cross-border capital flows through major channels have been further improved, and the size of foreign exchange reserves have remained stable on the whole. Looking ahead, there will still be many uncertainties in the international economy and financial market, but China is expected to maintain good momentum of economic growth in the long run, and will continue to promote the reform and opening-up. Given the stability of domestic economy and policies, cross-border capital flows will remain basically balanced, which will provide a solid foundation for the overall stability of China’s foreign exchange reserves. 2019-05-07/en/2019/0604/1511.html
-
Temporary rules on administrating domestic banks' overseas foreign exchange investment services on behalf of their clients released, to standardize domestic banks' operation and expand investment channels for domestic residents steadily. 2006-04-18/en/2006/0418/781.html
-
Notice on forex management of outward portfolio investment of fund management company released 2006-09-06/en/2006/0906/799.html