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In December 2019, China’s international trade in goods and services recorded receipts of RMB 1812.7 billion and payments of RMB 1614 billion based on statistics of balance of payments (BOP), registering a surplus of RMB 198.7 billion. Specifically, trade in goods registered receipts of RMB 1630.3 billion, payments of RMB 1285.4 billion, recording a surplus of RMB 345 billion; trade in services recorded receipts of RMB 182.4 billion, payments of RMB 328.6 billion, resulting in a deficit of RMB 146.3 billion. In the US dollar terms, in December 2019, China's BOP-based receipts and payments of international trade in goods and services were USD 258.5 billion and USD 230.2 billion respectively, registering a surplus of USD 28.3 billion. Specifically, the receipts and payments from trade in goods were USD 232.5billion and USD 183.3billion respectively, resulting in a surplus of USD 49.2 billion.Trade in services registered receipts and payments of USD 26 billion and USD 46.9 billion respectively, recording a deficit of USD 20.9 billion. (End) InternationalTrade in Goods and Services of China (Based on the BOP statistics) December2019 Item In 100 million of RMB In 100 million of USD Goods and services 1,987 283 Credit 18,127 2,585 Debit -16,140 -2,302 1. Goods 3,450 492 Credit 16,303 2,325 Debit -12,854 -1,833 2. Services -1,463 -209 Credit 1,824 260 Debit -3,286 -469 2.1Manufacturing services on physical inputs owned by others 104 15 Credit 107 15 Debit -3 -0 2.2Maintenance and repair services n.i.e 39 6 Credit 79 11 Debit -39 -6 2.3Transport -367 -52 Credit 325 46 Debit -692 -99 2.4Travel -1,318 -188 Credit 209 30 Debit -1,527 -218 2.5Construction 67 10 Credit 134 19 Debit -67 -10 2.6Insurance and pension services -27 -4 Credit 55 8 Debit -82 -12 2.7Financial services 20 3 Credit 43 6 Debit -23 -3 2.8Charges for the use of intellectual property -179 -26 Credit 45 6 Debit -224 -32 2.9Telecommunications, computer and information services 100 14 Credit 294 42 Debit -194 -28 2.10Other business services 119 17 Credit 516 74 Debit -397 -57 2.11Personal, cultural, and recreational services -24 -3 Credit 7 1 Debit -31 -4 2.12Government goods and services n.i.e 2 0 Credit 10 1 Debit -8 -1 Notes: 1. The trade in goods and services in this table refers to the transactions between residents and non-residents, based on the same standard as that for BOP statement. The monthly data are preliminary and may be inconsistent with the quarterly data in the BOP statement. 2. The data on international trade in goods and services are prepared in USD, and the RMB data for the current month is derived by converting the USD data at the monthly average central parity rate of the RMB against the USD. 3. This table employs rounded-off numbers. Definition of Indicators: Goods and Services: refers to the trade in goods and services between residents and non-residents, which is based on the same standard as that for the BOP statement. 1. Goods: refers to transactions in goods whereby the economic ownership is transferred between the Chinese residents and non-residents. The credit side records export of goods, while the debit side records import of goods. The data of goods account are mainly from the customs statistics of imports and exports, but differ from the statistics of the customs mainly in the following aspects: first, the goods in the BOP statement only reflect the goods whose ownership has been transferred (e.g. goods under the trade modes such as general trade and processing trade with imported materials), while the goods whose ownership is not transferred (e.g. manufacturing services with supplied materials or with exported materials) are included in the statistics of trade in services instead of the statistics of trade in goods; second, as required by the BOP statistics, the goods imported and exported are valued on the FOB basis, but as required by the customs, the goods exported are valued on the FOB basis, whereas goods imported are on the CIF basis. Therefore, for the purpose of the BOP statistics, the international transport and insurance premiums are taken out from the value of imported goods and included in the trade inservices; and third, the data on net export of goods in merchanting which are not included in the customs statistics are supplemented. 2. Services: includes manufacturing services on physical inputs owned by others, maintenance and repair services n.i.e, transport, travel,construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunications, computer and information services, other business services, personal, cultural and recreationalservices, and government goods and services n.i.e. The credit side records services supplied, while the debit side records services received. 2.1 Manufacturing services on physical owned by others: processor only provides processing, assembly, packaging and other services and chargesservice fee from the owner, while the ownership of the goods is not transferred between the owner and the processor. The credit side recordsthe manufacturingservices supplied by the Chinese residents on physical inputs owned by non-residents, and vice versa for debit side. 2.2 Maintenance and repair services: refer to the maintenance and repair services supplied by residents to non-residentsor vice versa on goods and equipment (such as vessel, aircraft, and other transportation facility) owned by the receiving party. The credit side records the maintenance and repair services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.3 Transport: refers to the process of transporting people and goods from one place toanother, and the relevant supporting and auxiliary services, as well as postaland delivery services. The credit side records the international transport, postal and delivery services supplied by residents to non-residents, and vice versa for debitside. 2.4 Travel:refers to goods consumed and services purchased by travelers in various economies as non-residents. The credit side records the goods and services provided by the Chinese residents to non-residents who have stayed in China for less than one year, as well as non-residents studying abroad and seeking medical treatment for indefinite period of stay. The debit side records the goods and services purchased by the Chinese residents when traveling, studying or seeking medical services abroad from non-residents. 2.5 Construction services: refer to the establishment, renovation, maintenance or expansion of fixed assets in the form of buildings, land improvement, roads, bridges and dams and other engineering buildings of engineering nature, relevant installation, assembly, painting, pipeline construction, demolition and project management,as well as site preparation, measurement and blasting and other specialservices. The credit side records the construction services provided by the Chinese residents outside the economic territory. The debit side records the construction services received by the Chinese residents in the Chinese economic territory from non-residents. 2.6 Insurance and pension services: refers tovarious insurance services and commission to agents related with insurancetransaction. The credit side records the life insurance and annuity, non-life insurance, reinsurance, standardized guarantee services and relevant supporting services supplied by the Chinese residents to non-residents, and vice versa for debitside. 2.7 Financial services: refer to financial intermediation and supporting services, excluding those covered by insurance and pension services. The credit side records the financial intermediation and supportingservices supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.8 Charges for the use of intellectual property: refer to licensed use of intangible, non-productive/non-financial assets and exclusive rights between residents and non-residents and the licensed use of existing original works or prototypes. The credit side records the intellectual property-related services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.9 Telecommunications, computer andinformation services: refer to communications services between residents and non-residents and transactions of services related to computer data and news, excluding commercial services delivered via telephone, computer and Internet. The credit side records the telecommunications, computer and information services supplied by residents to non-residents, and vice versa for debit side. 2.10 Other business services: refer to other types of services between residents and non-residents, including research and development services, professional and management consulting services, technical and trade-related services. The credit side records the other business services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.11 Personal, cultural and recreational services: referto transactions of personal, cultural and recreational services between residents and non-residents, including audiovisual and related services (films, radio, television programs and music recordings) and other personal, cultural and recreational services (health, education, etc.). The credit side records the related services supplied by the Chinese residents to non-residents, and vice versa for debitside. 2.12Government goods and services n.i.e: refer to various goods and services provided and purchased by governments and international organizations not included in other categories of goods andservices. The credit side records the goods and services not included elsewhere and supplied by the Chinese residents to non-residents, and vice versa for debit side. 2020-02-03/en/2020/0203/1627.html
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The National Foreign Exchange Administration Working Conference was held in Beijing recently. Based on the guiding principles of the Party's 19th National Congress, the second, third and fourth plenary sessions of its 19th Central Committee and the Central Economic Working Conference, the work done in foreign exchange administration for 2019 was reviewed, the current situation of foreign exchange markets was analyzed, and the tasks in foreign exchange administration for 2020 were studied and arranged. Pan Gongsheng, Secretary of the CPC Leadership and Administrator of the State Administration of Foreign Exchange (SAFE) delivered a report on foreign exchange administration. The meeting pointed out that, in the face of increasing risks and challenges in and outside China in 2019, foreign exchange authorities, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and following the decisions and arrangements of the CPC Central Committee and the State Council, the unified leadership and deployment of Financial Stability and Development Committee and the instructions of the Party Committee of the People's Bank of China (PBC), deepened foreign exchange reform and opening up, supported the growth of the real economy, guarded against risks arising from cross-border capital flows, ensured the basic equilibrium of the balance of payments and safeguarded the national economic and financial security. First, upholding the Party's political work, we were committed to strengthening Party building. Based on Secretary General Xi Jinping's instructions and requirements, and the decisions and arrangements of the CPC Central Committee and the State Council, we held activities about keeping in mind our Party's founding mission, kept up efforts to clean up undesirable work styles and tightened discipline to build professional teams of high-quality officials. Second, we deepened reform and opening up in foreign exchange administration, pushed forward with reforms that delegate power, improve regulation, and upgrade services to serve the high-quality growth of the real economy. Approved by the State Council executive meeting, we launched 12 initiatives for foreign trade and investment facilitation. We provided support for the development of new trade formats, and trading and investing activities along the Belt and Road route. We boosted the liberalization of the capital account, removed the investment quota restrictions on qualified foreign investors, facilitated investments in China's interbank bond markets by foreign institutional investors, carried out a pilot program on foreign exchange settlements and sales by securities companies. We also launched the cross-border financial blockchain service platform. Third, we guarded against risks associated with cross-border capital flows and effectively ensured the stability of foreign exchange markets. Following the macro-prudential administration policy, we adjusted cross-border capital flows against business cycles and based on market changes, and cracked down on underground banks and other violations. Fourth, we improved the operations and management of foreign exchange reserves, enabling steady rise of such reserves. Despite the complex circumstances, we successfully ensured the security and flows of foreign exchange reserve assets and the preservation and growth of their value. The meeting stressed that the year 2020 is the last year for building a moderately prosperous society in all respects and of the 13th Five-year Plan period. Foreign exchange authorities, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, should implement the guiding principles of the Party's 19th National Congress and the second, third and fourth plenary sessions of its 19th Central Committee, and the decisions and arrangements of the Central Economic Working Conference. We should further understand the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment. We should strengthen their confidence in the path, theory, system, and culture of socialism with Chinese characteristics. We should resolutely uphold General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely uphold the Party Central Committee's authority and its centralized, unified leadership. Adhering to the goal of building a moderately prosperous society in all respects and following the requirements of "Four Cardinal Principles" and "Six Stabilities", we need to improve the foreign exchange administration systems and mechanisms that meet the requirements for state governance capability modernization, converting the systemic advantages from the Party's leadership in economic tasks into governance effectiveness, so as to strive for the victory of building a moderately prosperous society in all respects and of the 13th Five-year Plan. The meeting also identified the priorities of foreign exchange administration in 2020. First, we will further exercise full and rigorous self-discipline among Party members and embed the Party's leadership in all aspects and stages of foreign exchange administration. Putting the Party's political work first, we will deepen knowledge by innovating theories, implement the decisions and arrangements of the CPC Central Committee and the State Council, solidify the impact of themed education programs and build professional teams of high-quality officials with loyalty, integrity and a strong sense of responsibility. By performing the "Two Responsibilities", we will build ourselves into role model organs that the CPC Central Committee find trustworthy and the general public are satisfied with. Second, we will adapt to the requirements of state governance capability modernization, and refine the two-pronged administration framework of "macro prudence + micro monitoring" for foreign exchange markets to ensure the balance of payments will be in basic equilibrium. Macro prudence is intended to maintain stability in foreign exchange markets and prevent systematic financial risks. Micro monitoring is to ensure orderly foreign exchange markets by focusing on authenticity verification, behavioral monitoring and micro-prudential regulation of players and their behaviors in foreign exchange markets. Third, we will deepen foreign exchange reform and opening up to serve the new patterns of opening up on all fronts. We will implement the 12 facilitation initiatives adopted by the State Council executive meeting. We will push forward with the liberalization of the capital account, and support connectivity and two-way opening up in the financial market to boost liberalization, facilitation and high-quality growth of trade and investment. We will underpin the development of new trade formats, propelling the construction of the cross-border financial blockchain service platform. We will press ahead with reforms that delegate power, improve regulation, and upgrade services, and support pilot reforms of foreign exchange administration, such as pilot free trade zones, Hainan free trade port, and the Guangdong-Hong Kong-Macao Greater Bay Area, to build open and competitive foreign exchange markets. Fourth, we will fend off external shocks and risks to ensure economic and financial security in China. We will deep dive on the impacts of external shocks on China's trade and investment, balance of payments structure, and cross-border capital flows and enrich the policy toolkits. We will spread the financial neutrality concept to enterprises. We will refine the laws and regulations for foreign exchange wholesale markets, building and improving off-site regulation and on-site inspection mechanisms for the wholesales markets. We will crack down on violations in foreign exchange markets to ensure the consistency, stability and foreseeableness of enforcement standards across business cycles, and maintain orderly foreign exchange markets. We will also advance the construction of digital and secure platforms for foreign exchange administration. Fifth, we will intensify the operations and management of foreign exchange reserves for further modernization. We will prudently boost diversified use of foreign exchange reserves to serve the high-quality development of the Belt and Road and ensure the security and flows of foreign exchange reserve assets and the preservation and growth of their value. Attendees include members of the Party Leadership, chief accountant and chief economist of the SAFE, as well as leaders of the branches (foreign exchange administrative departments), departments and units of the SAFE. 2020-01-05/en/2020/0105/1631.html
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As shown in the statistics of the StateAdministration of Foreign Exchange (SAFE), In January 2020,the amount of cross-border receipts and payments by non-banking sectors was RMB1986.1 billion and RMB 1934.6 billion, respectively, with a surplus of RMB 51.5billion. In the US dollar terms, in January 2020, the amount of cross-borderreceipts and payments by non-banking sectors was USD 287.1 billion and USD279.7 billion, respectively, with a surplus of USD 7.4 billion. Due to therespiratory disease caused by COVID-19, there is a delay in the submission ofdata on Foreign Exchange Settlement and Sales by banks in February 2020. As aresult, the January Data on Foreign Exchange Settlement and Sales by Banks, andSelected Transactions in the Chinese Foreign Exchange Market will not bereleased till 6th March. Addendum: Glossaryand relevant definitions Balance of payments(BOP) refers to all economic transactionsbetween residents and non-residents. Foreignexchange settlement and sales by banks refers to settlement and sale transaction that bank executes for customersand for the banks themselves, including statistic data onsettlements of forward contracts for foreign exchange settlementand sales and the exercises of option, and excludingthe transactions in the interbank foreign exchange market. The statistic reporting date of Foreign exchangesettlement and sales by banks should be the trade day of theForeignexchange settlement and sales transaction. By definition, foreignexchange settlement means foreign exchange holders sell foreignexchange to designated foreign exchange bank, and foreignexchange sales means designated bank sells foreign exchange to foreign exchange buyers. The net position of foreign exchange settlement andforeign exchange sales could be position squared throughtransactions on the inter-bank foreign exchange market, and it is one ofthe major contributors to the country’sforeign exchange reserve fluctuation, though it is not equal to netchange in foreign exchange reserves during the same period Unlikethe principle of balance-of-payments statistics, which cover the transactionsbetween residents and non-residents, foreign exchange settlement and sales bybanks only cover transactions of RMB and foreign currencies between banks and customers or on banks for themselves. Thenewly signed contract amount of forward foreign exchange settlement and sales refers to the binding forward contract between designated foreignexchange bank and client that predetermines foreign exchange currency, amount,exchange rate and tenor which to be executed upon maturity. Thenewly signed forward contract enables corporate to lock inadvance the exchange rate for the purchase or sale of a currency on a futuredate to manage relevant foreign exchange risk arising fromRMB volatility. In general, bank will hedge its foreign exchange risk exposures arise from the newly signed forward contract in the Interbank foreign exchange market. For example,when bank has net foreign exchange long position, bankwill short the equivalent amount of foreign exchange in the Interbank foreignexchange market in advance, or vice versa. Therefore, the newly signedcontract amount of forward foreign exchange settlement and sales is also one of contributors to China’s foreign exchange reserve fluctuation. Theunwind amount of forward foreign exchange settlement and sales refers to, where client is unable to perform the original forwardcontract due to change in its real demand, client to fully or partially closeits forward position by executing another deal with opposite direction to theoriginal contract. Therolling amount of forward foreign exchange settlement and sales refers to client to adjust the settlement date of original contract dueto change in its real demand. Theoutstanding amount of forward foreign exchange settlement and sales by the endof the current period refers to the total amount of forwardcontracts accumulated from all non-matured forward contracts with client. Thenewly signed contractamount and the outstanding amount should satisfy the equationthat: theoutstanding amount of forward foreign exchange settlement and sales by the endof the current period = theoutstanding amount of forward foreign exchange settlement and sales at the endof the previous period + the newly signed contract amount of forward foreignexchange settlement and sales for the period - settlements of forwardcontracts for foreign exchange settlement and sales for the period - the unwindamount of forward foreign exchange settlement and sales for the period. The net Deltaexposure of outstanding options refers to the implied foreignexchange spot risk exposure from outstanding option contracts that bank executedwith client. Bank shall hedge such risk in the foreign exchange market for risk management during deal life cycle. The cross-borderreceipts and payments bynon-banking sectors refers to the receipts andpayments between domestic non-banking sectors (including institutional and individual residents)and non-residentsthrough domestic banks, excluding receipts and payments in cash. In particular,the statisticsincludescross-border receipts and payments between non-banking sectors andnon-residents through domestic banks (including RMB and foreign currency), and domesticreceipts and payments between non-banking sectors and non-residents throughdomestic banks (temporarily excluding domestic receipts and payments in RMBbetween individual residents and non-resident individuals). Data are collected whencustomers conduct receipts and payments with non-resident counterparties atdomestic banks. Specifically, the receipts refer to the capitalof non-bankingsectors received fromnon-residents via domestic banks; the payments refer to the capitalof non-bankingsectors paid to non-residents via domestic banks. Thecross-border receipts and payments by non-banking sectors is based on cash basis,different from the accrual basis required by the Balance of Payments Statistics. The statisticsmerely reflects the cashflows between non-banking sectors and non-residents and does not include bartertransactions or transactions with non-residents conducted by the banksthemselves. Therefore,the scope of thestatistics is narrower than that of the Balance of Payments Statistics. 2020-02-21/en/2020/0220/1632.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government, the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, CFETS, and national Chinese-funded banks: To boost the opening up of foreign exchange markets and further facilitate management of foreign exchange risks by foreign institutional investors (foreign investors) in the interbank bond market, we hereby provide the following notification of the issues related to foreign investors' participation in China's foreign exchange market, in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration and relevant provisions: I, foreign investors can exchange RMB for foreign exchange derivatives ("foreign exchange derivatives") and manage foreign exchange risk exposures from investing in the interbank bond market through hedging. The foreign investors hereunder refer to the foreign investors defined by the Announcement No. 3 of the People's Bank of China [2016]. II, foreign banking investors can carry out foreign exchange derivatives transactions through any of the following channels: (1) Transact as a client with domestic financial institutions directly. (2) Apply to the China Foreign Exchange Trade System (CFETS) to become its member and enter the interbank foreign exchange market directly. (3) Apply to the CFETS to become its member and enter the interbank foreign exchange market as a prime broker. III, foreign non-banking investors can carry out foreign exchange derivatives transactions through any of the following channels: (1) Transact as a client with domestic financial institutions directly. (2) Apply to the CFETS to become its member and enter the interbank foreign exchange market as a prime broker. IV, foreign investors who choose the first channel in Article II and III shall transact with no more than 3 domestic financial institutions and present the name list of financial institutions to the CFETS by themselves or their settlement agencies in advance for archiving; change of financial institutions shall be reported to the CFETS for archiving beforehand. V, foreign investors shall comply with the following in foreign exchange derivatives transactions: (1) Foreign exchange derivatives exposures are appropriately relevant to foreign exchange risk exposures. Foreign exchange risk exposures include principal and interest of bond investment and changes in market capitalization. (2) After foreign exchange risk exposures change with the investments in bonds, foreign investors shall adjust the foreign exchange derivatives exposures they hold within 5 working days in the current or the next month. (3) Foreign investors, based on the actual needs of foreign exchange risk management, can flexibly choose the transaction mechanisms including rollovers, reverse position closing, gross or balance settlement, with profits or losses settled in RMB or foreign currencies. (4) Before carrying out the first foreign exchange derivatives transaction in accordance with this Circular, foreign investors shall make a written commitment of compliance with the hedging principles to financial institutions or the CFETS. VI, foreign investors who choose the first channel set out in Article II and III hereabove and want to open a special foreign exchange account with a domestic financial institution other than the settlement agency can do so by presenting the business registration evidence as required by the Circular of the State Administration of Foreign Exchange on Foreign Exchange Administration for Investment in the Interbank Bond Market by Foreign Institutional Investors (Huifa No. 12 [2016]). If this special account is used for the delivery of funds, profit or loss disposal and margin management under foreign exchange derivatives transaction, the cross-border receipts and payments of funds shall be handled through the settlement agency. When the relations between foreign investors and a domestic financial institution for foreign exchange derivatives transactions are terminated, the special foreign exchange account opened with such an institution shall be closed in time. VII, foreign investors who enter the interbank foreign exchange market directly or as a prime broker shall report relevant information on transactions as required by the CFETS. VIII, domestic financial institutions who handle businesses for foreign investors through the first channel set out in Article II and III hereabove shall do so in compliance with the following: (1) Report to the CFETS every day on the information of foreign exchange derivatives transactions by foreign investors. (2) Perform the statistical and reporting obligations to the SAFE, in relation to the foreign exchange derivatives business for customers. (3) Comply with relevant provisions of the People's Bank of China in using a third party's transaction system, platforms or facilities other than the internal transaction systems. IX, the CFETS shall provide market services and technical guarantees in accordance with this Circular, such as counterparty archiving for foreign investors, membership market access, prime brokerage, and data collection. X, in case of violations of this Circular by foreign investors and domestic financial institutions, the SAFE will take regulatory measures in compliance with laws. XI, this Circular will take effect as of February 1, 2020. The Circular of the State Administration of Foreign Exchange on Foreign Exchange Risk Management by Foreign Institutional Investors in the Interbank Bond Market (Huifa No. 5 [2017]) will be abolished. In case of any discrepancies with previous regulations, this Circular shall prevail. Upon receipt, the branches and foreign exchange administrative departments of the SAFE shall timely forward it to the relevant financial institutions within their respective jurisdictions. The State Administration of Foreign Exchange January 13, 2020 2020-01-13/en/2020/0113/1625.html
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The State Administration of Foreign Exchange (SAFE) has recently released the official data in the Balance of Payments for the third quarter and the first three quarters of 2019 and the International Investment Position as at the end of September. Wang Chunying, press spokesperson and chief economist of the SAFE, answered media questions on relevant issues. Q: Could you brief us on the characteristics of China's balance of payments for the first three quarters of 2019? A: In the Balance of Payments, China recorded a surplus under the current account, and net cross-border capital inflows in the first three quarters of 2019, suggesting the balance of payments was in a basic equilibrium. First, the current account was in surplus. In the first three quarters, the current account surplus hit USD 137.4 billion, accounting for 1.3% of GDP for the same period, which fell within a reasonable surplus range. Specifically, a surplus of USD 339.9 billion was registered under trade in goods, up by 33% year on year, and a deficit of USD 201.8 billion was recorded under trade in services, down by 12%. Under trade in services, the deficits of travel, transport and charges for the use of intellectual property went down by 8%, 14% and 10% respectively. Second, the financial account excluding reserve assets was in surplus. In the first three quarters, China posted a surplus of USD 20.5 billion under the financial account excluding reserve assets. Net inflow of USD 30.1 billion was registered under direct investment, including ODI of USD 69.5 billion and FDI of USD 99.5 billion. Net inflow of USD 43 billion was recorded under portfolio investment, including outward portfolio investment of USD 63.2 billion and foreign portfolio investment of USD 106.2 billion. Overall, in the complex and changing external environment, China's economic fundamentals have been stable and sound, and will remain so over the long term, major economic indicators were within an appropriate range and high-level opening up was advanced. It is expected that China's balance of payments will stay stable across the board and remain in a basic equilibrium throughout the year. Q: What would you say about China's international investment position as at the end of 2019? A: The International Investment Position shows that, by the end of September 2019, China's international investment position remained robust, with increasing net external assets and high reserve assets that continued to rank it No. 1 worldwide. First, the total external financial assets rose slightly. As at the end of September, China's external assets reached USD 7.4681 trillion, up by 0.3% quarter on quarter. Specifically, ODI amounted to USD 1.9695 trillion, up by 0.9%; external portfolio investment assets hit USD 584.9 billion, up by 4.4%; other external investment assets reached USD 1.7019 trillion, up by 0.3%; and reserve assets stayed at USD 3.2045 trillion, ranking China No. 1 across the world. Second, the external liabilities contracted. By the end of September, China's external liabilities reached USD 5.3119 trillion, down by 1.9% quarter on quarter, mainly driven by foreign exchange rate changes and revaluation. Specifically, foreign direct investment liabilities hit USD 2.7773 trillion, down by 2.0%; external portfolio investment liabilities amounted to USD 1.2208 trillion, down by 3.4%; and other external investment liabilities reached USD 1.3025 trillion, down by 0.7%. 2019-12-27/en/2019/1227/1623.html
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On December 30, 2019, Yi Gang, Governor the People's Bank of China (PBC), visited the Investment Center of the State Administration of Foreign Exchange (SAFE) to meet with officials for the operation and management of foreign exchange reserves, accompanied by Pan Gongsheng, Deputy Governor of the PBC and Administrator of the SAFE, Zhang Xin and Lu Lei, both deputy administrators of the SAFE. Yi Gang showed his care for every official engaged in the operations and management of foreign exchange reserves, and confirmed the great accomplishments achieved in the operations and management of foreign exchange reserves in 2019. Yi Gang pointed out that, facing increasing risks and challenges in and outside China in the year to date, the Investment Center has studied and implemented Xi Jinping thought on socialism with Chinese characteristics for a new era and the decisions and arrangements by the CPC Central Committee and the State Council. By pursuing progress while maintaining stability and ensuring robust operations, the Investment Center has safeguarded the security and flows of foreign exchange reserve assets and the preservation and growth of their value, providing a solid guarantee for preventing and addressing major risks and maintaining economic and financial stability. Yi Gang also stressed that, in 2020, the last year for building a moderately prosperous society in all respects and of the 13th Five-year Plan period, ensuring smooth operations and management of foreign exchange reserves will be both a glorious mission and an arduous task. At the juncture of achieving the Two Centenary Goals, officials involved in the operations and management of foreign exchange reserves, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, should implement the guiding principles of the Party’s 19th National Congress and the second, third and fourth plenary sessions of its 19th Central Committee, and the decisions and arrangements of the Central Economic Working Conference. They should further understand the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment. They should strengthen their confidence in the path, theory, system, and culture of socialism with Chinese characteristics. They should resolutely uphold General Secretary Xi Jinping’s core position on the Party Central Committee and in the Party as a whole, and resolutely uphold the Party Central Committee’s authority and its centralized, unified leadership. Keeping in mind the Party’s founding mission, they should endeavor to improve the operations and management systems for foreign exchange reserves with Chinese characteristics, further promote the modernization of operations and management and forge ahead to secure a decisive victory in building a moderately prosperous society in all respects. 2019-12-31/en/2019/1231/1630.html
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Q; The State Administration of Foreign Exchange (SAFE) has just released the latest data on foreign exchange reserves. Could you explain why such changes occurred in December 2019? What will be the future trends? A: China posted USD 3.1079 trillion in foreign exchange reserves as at the end of December 2019, up by USD 12.3 billion or 0.4% month on month and by USD 35.2 billion or 1.1% from the beginning of this year. In December, China's foreign exchange market remained in a basic equilibrium. Globally, due to trade situations, major central banks' stances on monetary policies and British election, the US Dollar Index and bond prices were in decline. Because of foreign exchange rate conversion and asset price changes, China's foreign exchange reserves rose slightly. Throughout the year, in the face of increasing risks and challenges, China's major macroeconomic indicators remained within a reasonable range, and its economy was resilient, fueled by changing growth drivers. Therefore, China's foreign exchange market stayed stable, the balance of payments was in a basic equilibrium and foreign exchange reserves increased steadily. Going forward, political and economic uncertainties will not abate globally, making financial volatility more likely across the world. Nevertheless, China's economic fundamentals are stable and sound, and will remain so over the long term. With a focus on the supply-side structural reform, we will strive for high-quality development driven by reform and opening up, and keep major economic indicators within an appropriate range, which will shore up the overall stability of China's foreign exchange reserves. 2020-01-07/en/2020/0107/1622.html
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To boost the opening up of foreign exchange markets, the State Administration of Foreign Exchange (SAFE) has recently released the Circular of the State Administration of Foreign Exchange on the Improvement of Foreign Exchange Risk Management by Foreign Institutional Investors in the Interbank Bond Market (Huifa No. 2 [2020]) (Circular), with the aim of further facilitating foreign exchange risk management by foreign institutional investors in the interbank bond market. The Circular has been designed to offer more foreign exchange hedging channels to foreign institutional investors in the interbank bond market. Foreign non-banking investors will be allowed to enter the interbank foreign exchange market by dealing with domestic financial institutions over the counter or indirectly through becoming a prime broker; in addition to these two channels, foreign banking investors can access the interbank foreign exchange market directly. Moreover, the business processes for foreign exchange derivatives transactions with foreign institutional investors will be simplified and mechanisms for foreign exchange derivatives transactions will be further improved, so as to optimize the collection of foreign exchange transaction information and reduce transaction costs of market players. The SAFE, based on the requirements of the CPC Central Committee and the State Council, will continue to press ahead with reform and opening up in the foreign exchange area and boost the growth of foreign exchange markets to better serve the real economy and the opening up of financial markets. 2020-01-13/en/2020/0123/1624.html
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The Joint Prevention and Control Mechanism of the State Council on Responding to the Novel Coronavirus Pneumonia held a press conference at 10 a.m. on February 7, 2020 (Friday). At the conference, Yu Weiping, Vice Minister of the Ministry of Finance (MOF), Pan Gongsheng, Deputy Governor of the People’s Bank of China (PBC) and Administrator of the State Administration of Foreign Exchange (SAFE), Wang Daoshu, Chief Auditor and Head of the Goods and Services Tax Department of the State Taxation Administration (STA), and Zhou Liang, Vice Chairman of the China Banking and Insurance Regulatory Commission (CBIRC) introduced the financial and fiscal policies for preventing and controlling the novel coronavirus pneumonia (NCP) outbreak, briefed on the initiatives taken to address difficulties in and high costs of financing for micro and small enterprises (MSEs), and took press questions. The transcript of Deputy Governor Pan Gongsheng’s introduction and responses to the questions is as follows. Pan Gongsheng: Friends from the press, happy Chinese New Year! First of all, I’d like to, on behalf of the PBC and the SAFE, extend our heartfelt gratitude to you for your long-standing support for financial work. Ever since the NCP outbreak, earnestly implementing the important instructions and orders given by General Secretary Xi Jinping, seriously putting into practice the decisions and arrangements made by the Central Committee of the Communist Party of China (CPC) and the State Council, and following the working arrangement of the CPC Central Committee’s Leading Group on Responding to the NCP Outbreak and the guidance of the State Council’s Financial Stability and Development Council (FSDC), the financial system has given top priority to the work of supporting epidemic control, and spared no efforts to provide financial support for the fight against the NCP. First, the liquidity in the financial system has been kept adequate. In line with the requirements laid out in the FSDC meeting, the PBC injected a total of RMB1.7 trillion through open market operations, which was more than expected, on February 3 and 4, aiming to keep the liquidity in the banking system reasonable and adequate during the special period of epidemic control, signal the strengthening of countercyclical adjustments, and thus stabilize market expectations. Second, financial markets, including money, bond, stock and foreign exchange markets, have reopened as scheduled and run smoothly. We have worked to enhance services offered by financial market infrastructure and ensure the proper handling of issuance, trading, clearing and settlement businesses in domestic financial markets, so as to maintain stable and effective market operation. The stock and foreign exchange markets are cases in point in particular: following dramatic adjustments on the first day of trading, over the last few trading days, the stock market stabilized and rebounded, and the RMB exchange rate continued to experience both ups and downs with modest two-way fluctuations. All this shows that China’s financial market has become more resilient and mature. Third, measures have been taken to enhance financial support for epidemic control, ensure people’s well-being and support stable development of the real economy. On February 1, the PBC, the MOF, the CBIRC, the China Securities Regulatory Commission (CSRC) and the SAFE jointly adopted a total of 30 policy measures, requiring financial institutions in banking, securities and insurance sectors to optimize financial services, establish channels for services of payment, State Treasury, foreign exchange, cash, credit and financial infrastructure, simplify business procedures, reduce or exempt relevant fees, and maintain the continuity and convenience of financial services. Meanwhile, the PBC has decided to release RMB300 billion from special central bank lending, so as to support financial institutions to issue loans at favorable rates and strengthen financial support for key enterprises offering important medical supplies and daily necessities. We will continue to boost financial support for MSEs, private enterprises, the manufacturing sector and other key areas, increase credit loans and medium and long-term loans, and lower overall financing costs. As required, financial institutions shall refrain from blindly withdrawing, cutting or delaying loans issued to enterprises faced with temporary difficulties caused by the epidemic. The policy measures taken by the financial system for epidemic control have won not only full recognition from the financial market and all sectors of society, but also applauds from the International Monetary Fund, the World Bank and the international financial community at large. It is generally acknowledged that the impact of the epidemic will be temporary and limited, China’ economy will continue to demonstrate extremely strong resilience, and the Chinese government has ample policy space to stabilize economic growth. In the next step, following the strong leadership of the CPC Central Committee, the financial system will earnestly implement the arrangements made by the CPC Central Committee’s Leading Group on Responding to the NCP Outbreak, put into practice the 30 policy measures to ensure financial support for epidemic control under the guidance of the FSDC, enhance countercyclical adjustments in monetary policy, so as to safeguard the overall stability of the financial market, further reinforce financing support for heavily afflicted areas, better satisfy the demand of social entities for basic financial services and promote the sustained and sound development of the national economy. Thank you. Journalist with Bloomberg News: How will the epidemic impact China’s deleveraging policies? Will it result in more nonperforming loans? What is its impact on the fiscal deficit? Thank you. Pan Gongsheng: Thank you for your question. First, in recent years, as a joint result of multiple policy measures, China’s macro leverage ratio has remained basically stable, standing at around 250 percent over the recent ten quarters. Second, structural deleveraging has produced a marked effect. The leverage ratios of enterprises have been on a constant decline, with the recent two years seeing a drop of five to six percentage points compared to the 2017 highs. The leverage ratios of the household and government sectors tend to grow at a slower pace. Third, China has abundant policy tools to cope with the downward pressure on its economy. Among all the major economies in the world, China remains one of the few countries which are practicing a normal monetary policy. Fourth, when implementing the monetary policy, we need to take into account various factors which may affect internal and external balances, such as economic growth, leverage ratios, inflation expectations and exchange rates. During the period of epidemic prevention and control, when there is downward pressure on the economy, it is particularly important to maintain economic growth momentum. The PBC will carefully study and evaluate the monetary policy, properly handle its intensity and balance its role in supporting economic growth and stabilizing leverage ratios. Thank you. Journalist with China Central Television, China Media Group: As we know, the Chinese government has been attempting to lower financing costs for small private enterprises. How will the epidemic impact the difficulty in and high cost of financing which has been long faced by small and medium-sized enterprises (SMEs)? Are there any measures available to effectively relieve the financing strain for SMEs and private enterprises? Thanks. Pan Gongsheng: Just now Vice Chairman Zhou has properly answered your questions, and I’d like to add some points. During this epidemic, as MSEs and private enterprises are relatively vulnerable to risks and thus more prone to suffering from epidemic impacts, special measures should be adopted at a special time. A few days ago, five ministries jointly published a document, laying out 30 policy measures, of which many are made to provide financial support and aid for MSEs and private enterprises. The financial institutions in China, including banks, insurance companies and securities firms, have all stayed committed to their political stance, considered the overall situation and taken proactive actions. A number of them have introduced many internal policy measures to ease the financing burden for MSEs. Under normal circumstances, the work to ease the financing difficulties for MSEs is a complicated and systematic project for the real economy and the supply-side structural reform of the financial sector. It entails perseverant and constant efforts. The CPC Central Committee and the State Council have paid much attention to the financing problems faced by MSEs and private enterprises and therefore taken a number of measures to address the problems. As of now, solid results have been achieved. Vice Chairman Zhou made this point clearly just now. There is no doubt that, this year and in the future, the financing problems of MSEs will remain a top priority of the financial system. We need to reform and improve our monetary policy, fiscal policy, regulatory policy and taxation policy, and optimize the policy environment and the incentive and restraint mechanisms for commercial banks serving MSEs. In broad terms, we need to guide and encourage commercial banks to carry out projects aiming at enhancing their capability to offer financial services to MSEs and improve internal policy support arrangements concerning resource allocation, performance appraisal, risk assessment, due diligence, liability exemption, and Fintech application. We will also work with local governments to improve the construction of credit information and risk sharing mechanisms. As Vice Chairman Zhou said just now, with the perseverant and constant efforts of financial regulators and the entire financial system, I believe that this problem will be solved to a certain extent. Thank you. Journalist with Market News International: My question is for Deputy Governor Pan. Earlier this week, as the PBC injected liquidity and adjusted rates, we saw a marked decline in the interbank rates. So, how is the drop in the real lending rates? In the near future, will the PBC continue to lower the rate of medium-term lending facility (MLF) and thus guide the decline of lending rates? How intensely and frequently will the PBC continue to increase financing supply to stabilize the market and expectations? Pan Gongsheng: First of all, we know that on January 1 this year, the PBC announced to cut the required reserve ratio (RRR) by 0.5 percentage points and, as a result, released RMB800 billion of long-term funds. On February 3 and 4 when the markets reopened after the Spring Festival vacation, in order to inject liquidity to the market, the PBC conducted reverse repos worth RMB1.7 trillion through open market operations. The measures clearly indicate the resolve of the PBC to stabilize market expectations and to boost market confidence. For current open market rates, the 7-day and 14-day interest rates, standing at 2.4 percent and 2.55 percent, respectively, have decreased by 10 basis points. As the amount rises and rates drop, the entire financial market also witnessed the decline of interest rates. On February 6, the overnight and 7-day repo rates in the interbank market were around 1.8 percent and 2.3 percent, respectively, a quite steady trend on the whole. As we know, the loan prime rate (LPR) refers to the most favorable lending rate calculated based on the quotation of 18 panel banks. Changes of the overall market rates would be reflected in the lending rates, and changes of interest rates in the financial and money markets would affect LPR expectations. It is very likely that under the current market expectations, the rates of the MLF and the LPR to be published on February 20 will both go down. LPR adjustments have strong impact on the loan pricing of commercial banks, and act as a guidance as banks decide their lending rate by adding basis points to the LPR. Banks then adjust the basis points added or subtracted when granting loans according to the development of market interest rates. In the next step, as required by the State Council, the PBC will continue to analyze and assess the influence of the NCP outbreak on the Chinese economy. There is still ample space for macro-management policies. Among the world’s major economies, China remains one of the few that maintain a normal monetary policy. So we have abundant policy tools in our toolkit. As for the monetary policy, first, we will strengthen countercyclical adjustments and ensure reasonable and adequate liquidity, thus providing a sound monetary and financial environment for the real economy; second, we will further liberalize interest rates, improve the LPR transmission mechanism, which I just mentioned, increase the transmission efficiency of the monetary policy, and reduce social financing cost; third, we will enhance the guiding role of structural monetary policy tools like targeted RRR cuts, central bank lending and central bank discount, and ramp up support for key areas and weak links in the national economy. Thank you. Journalist with Phoenix TV: It was reported that regulatory authorities would possibly postpone implementing the new regulations on asset management due to the epidemic. Is that true? If so, how long will it be postponed? Thank you. Pan Gongsheng: We are making assessments. There is a possibility for the postponement. The PBC and the CBIRC are making technical assessments. Journalist with China Daily: Recently, the PBC announced the provision of RMB300 billion through special central bank lending. How will the funds be used, and what will be done to ensure that they precisely target epidemic prevention and control? What does the PBC make of the current situation in financial markets, especially stock market and foreign exchange market fluctuations, and future market performance? Thank you. Pan Gongsheng: Vice Minister Yu has answered part of your first question from the fiscal perspective. To live up to its responsibilities and provide support for winning the battle against the epidemic, with the approval of the State Council, the PBC has made a special policy arrangement providing RMB300 billion in special central bank loans. The funds will be mainly used by national commercial banks and local commercial banks in the heavily hit provinces and municipalities to provide credit support at preferential interest rates for key enterprises engaged in the production, transportation or sale of vital medical supplies and daily necessities. As Vice Minister Yu just said, given that this is a special policy arrangement, we will follow a list of key enterprises recognized by the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT). On the list are mainly key manufacturers of medical supplies and daily necessities, such as surgical masks, goggles, disinfectants, and sanitizers, that are essential to epidemic prevention and control. Financial institutions will be required to speed up the credit granting process and lend as soon as possible to the listed enterprises with the funds provided through special central bank lending.In respect to the cost of the special central bank lending, the PBC provides commercial banks with relatively low cost. Commercial banks are required to grant loans to the above-mentioned enterprises at favorable rates, i.e. no higher than 3.15 percent, which is one percentage point lower than the 4.15 percent LPR released last month. In practice, financial institutions have granted loans with rates ranging from 2.4 to 3.15 percent. Based on the loans, the MOF subsidizes 50 percent of the lending rates for the borrowers, which means with the loan granted, the key enterprises will bear a financing cost no higher than 1.6 percent. As this is a special policy arrangement, we must ensure these loans are used in an appropriate and targeted manner. For that purpose, we have adopted a list-based approach, jointly with the MOF, NDRC and MIIT, in an attempt to rigidly channel the money to enterprises engaged in disaster relief and emergency response, and to the most targeted areas. Meanwhile, we will keep electronic ledgers to track and monitor how the funds are used. The central government has also assigned the National Audit Office the subsequent supervision over fund utilization. On February 3, China’s financial markets, especially the stock and foreign exchange markets, opened as scheduled, which reflected the central government’s resolution to respect market rules, the confidence of the government’s decision-makers, and the maturing financial markets in China. On the first day of market opening, marked adjustments were witnessed in A-share and onshore RMB exchange rate, which, I think, was within the public’s expectation. After that, the stock market stabilized and rebounded, with the RMB exchange rate fluctuating slightly on both directions, and cross-border capital flow as well as foreign exchange supply and demand basically stable. This evening, the SAFE will publish the foreign exchange reserve statistics of January, which shows a steady rise. Due to its high sensitivity, the financial markets are able to price risks rapidly. Therefore, after a short period of fluctuation following the market opening, the stock and foreign exchange markets largely resumed normal operation. We can find that the financial markets were, in a unique way, reflecting the confidence in the Chinese government to control the epidemic and in the future growth of China’s economy. As I mentioned, the influence of the outbreak on China’s economy is only temporary, without changing the fundamentals towards sound and high-quality economic growth over the long term. China’s economy has displayed remarkable resilience. The Chinese government has ample policy space to stabilize economic growth. Therefore, we are fully confident in the steady performance of both the stock market and foreign exchange market. Thank you. Journalist with Reuters: According to recent analyses and market expectations, the economy will see a sharp slowdown in the first quarter. Will it drop below 4 percent? Is it necessary to introduce aggressive economic policies, like interest rate cuts, RRR cuts and deficit ratio rises? Thank you. Pan Gongsheng: There have been lots of discussions and estimates on how China’s economy will perform in the next stage among economists, market institutions and government bodies. The PBC has also been closely monitoring economic performance and making some judgments. We believe that the influence of the outbreak on our economy is only temporary. As it coincides with the Spring Festival, the service sector including tourism, catering and entertainment has been afflicted. The extended holiday and delayed return to work would also hit industrial production and the construction industry. So we estimate that economic activities in the first quarter might be disturbed to a certain extent. However, once the epidemic is under control, the economy will soon recover to the level around the potential output. In 2003, China’s economy was disturbed by SARS in the second quarter and rebounded rapidly in the third quarter. Therefore, we believe our economy will rapidly stabilize when the disease is alleviated. Moreover, as the delayed consumption and investment will possibly be released, China’s economy will experience a compensatory recovery. As I noted, owing to strong resilience and great potential of China’s economy, the fundamentals towards sound and high-quality growth in the long term will not be changed by the short-term epidemic. We still have ample space for macro adjustment policies. In regard to the monetary policy, China is still one of the few major economies maintaining normal monetary policies in the world. As a result, our tool kit is so fully equipped as to effectively offset the negative impacts of the epidemic. As for specific policies, as you asked at the end of your question, the PBC has been carefully analyzing and assessing the influence of the epidemic on our economy in a bid to enhance policy preparedness. Thank you. 2020-02-07/en/2020/0207/1679.html
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In April 2020, China’s international trade in goods and services recorded receipts of RMB 1532.1 billion and payments of RMB 1245.3 billion based on statistics of balance of payments (BOP), registering a surplus of RMB 286.8 billion. Specifically, trade in goods registered receipts of RMB 1395.8 billion, payments of RMB 1045 billion, recording a surplus of RMB 350.9 billion; trade in services recorded receipts of RMB 136.3 billion, payments of RMB 200.3 billion, resulting in a deficit of RMB 64 billion. In the US dollar terms, in April 2020, China's BOP-based receipts and payments of international trade in goods and services were USD 216.8 billion and USD 176.2 billion respectively, registering a surplus of USD 40.6 billion. Specifically, the receipts and payments from trade in goods were USD 197.5 billion and USD 147.8 billion respectively, resulting in a surplus of USD 49.6 billion. Trade in services registered receipts and payments of USD 19.3 billion and USD 28.3 billion respectively, recording a deficit of USD 9.1 billion.(End) International Trade in Goods and Services of China (Based on the BOP statistics) April 2020 Item In 100 million of RMB In 100 million of USD Goods and services 2868 406 Credit 15321 2168 Debit -12453 -1762 1. Goods 3509 496 Credit 13958 1975 Debit -10450 -1478 2. Services -640 -91 Credit 1363 193 Debit -2003 -283 2.1Manufacturing services on physical inputs owned by others 83 12 Credit 85 12 Debit -2 0 2.2Maintenance and repair services n.i.e 8 1 Credit 29 4 Debit -21 -3 2.3Transport -187 -27 Credit 312 44 Debit -500 -71 2.4Travel -507 -72 Credit 86 12 Debit -594 -84 2.5Construction 22 3 Credit 73 10 Debit -52 -7 2.6Insurance and pension services -28 -4 Credit 30 4 Debit -59 -8 2.7Financial services 6 1 Credit 18 3 Debit -12 -2 2.8Charges for the use of intellectual property -160 -23 Credit 57 8 Debit -217 -31 2.9Telecommunications, computer and information services 50 7 Credit 242 34 Debit -192 -27 2.10Other business services 66 9 Credit 376 53 Debit -310 -44 2.11Personal, cultural, and recreational services -13 -2 Credit 8 1 Debit -20 -3 2.12Government goods and services n.i.e 21 3 Credit 46 7 Debit -26 -4 Notes: 1. The trade in goods and services in this table refers to the transactions between residents and non-residents, based on the same standard as that for BOP statement. The monthly data are preliminary and may be inconsistent with the quarterly data in the BOP statement. 2. The data on international trade in goods and services are prepared in USD, and the RMB data for the current month is derived by converting the USD data at the monthly average central parity rate of the RMB against the USD. 3. This table employs rounded-off numbers. Definition of Indicators: Goods and Services: refers to the trade in goods and services between residents and non-residents, which is based on the same standardas that for the BOP statement. 1. Goods: refers to transactions in goods whereby the economic ownership is transferred between the Chinese residents and non-residents. The credit side records exportof goods, while the debit side records import of goods. The data of goods account are mainly from the customs statistics of imports and exports, but differ from the statistics of the customs mainly in the following aspects: first, the goods in the BOP statement only reflect the goods whose ownership has been transferred (e.g. goods under the trade modes such as general trade and processing trade with imported materials), while the goods whose ownership is not transferred (e.g. manufacturing services with supplied materials or with exported materials) are included in the statistics of tradein services instead of the statistics of trade in goods; second, as required by the BOP statistics, the goods imported and exported are valued on the FOB basis, but as required by the customs, the goods exported are valued on the FOB basis, whereas goods imported are on the CIF basis. Therefore, for the purpose of the BOP statistics, the international transport and insurance premiums are taken out from the value of imported goods and included in the trade inservices; and third, the data on net export of goods in merchanting which are not included in the customs statistics are supplemented. 2. Services: includes manufacturing services on physical inputs owned by others, maintenance and repair services n.i.e, transport, travel, construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunications, computer and information services, other business services, personal, cultural and recreational services, and government goods and services n.i.e. The credit side records services supplied, while the debit side records services received. 2.1 Manufacturing services on physical owned by others: processoronly provides processing, assembly, packaging and other services and charges service fee from the owner, while the ownership of the goods isnot transferred between the owner and the processor. The credit side records the manufacturing services supplied by the Chinese residents on physical inputs owned by non-residents, and vice versa for debit side. 2.2 Maintenance and repair services: refer to the maintenance and repair services supplied by residents to non-residentsor vice versa on goods and equipment (such as vessel, aircraft, and other transportation facility) owned by the receiving party. The credit side records the maintenance and repair services supplied by the Chinese residents tonon-residents, andvice versa for debit side. 2.3 Transport: refers to the process of transporting people and goods from one place to another, and the relevant supporting and auxiliary services, as well as postaland delivery services. The credit side records the international transport,postal and delivery services supplied by residents to non-residents, and vice versa for debitside. 2.4 Travel: refers to goods consumed and services purchased by travelers in various economies as non-residents. The credit side records the goods and services provided by the Chinese residents to non-residents who have stayed in China for less than one year, as well as non-residents studying abroad and seeking medical treatment for indefinite period of stay. The debit side records thegoods and services purchased by the Chinese residents when traveling, studying or seeking medical services abroad from non-residents. 2.5 Construction services: refer to the establishment, renovation, maintenance or expansion of fixedassets in the form of buildings, land improvement, roads, bridges and dams and other engineering buildings of engineering nature, relevant installation, assembly, painting, pipeline construction, demolition and project management, as well as site preparation, measurement and blasting and other special services.The credit side records the construction services provided by the Chineseresidents outside the economic territory. The debit side records the construction services received by the Chinese residents in the Chinese economic territory from non-residents. 2.6 Insurance and pension services: refers to various insurance services and commission to agents related with insurance transaction. The credit side records the life insurance and annuity, non-life insurance, reinsurance, standardized guarantee services and relevant supporting services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.7 Financial services: refer to financial intermediation and supporting services, excluding those covered by insurance and pension services. The credit side records the financial intermediation and supporting services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.8 Charges for the use of intellectual property: refer to licensed use of intangible, non-productive/non-financial assets and exclusive rights between residents and non-residents and the licensed use of existing original works or prototypes. The credit side records the intellectual property-related services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.9 Telecommunications, computer and information services: refer tocommunications services between residents and non-residents and transactions ofservices related to computer data and news, excluding commercial services delivered via telephone, computer and Internet. The credit side records the telecommunications, computer and information services supplied by residents tonon-residents, andvice versa for debit side. 2.10 Other business services: refer to other types of services between residents and non-residents, including research and development services, professional and management consulting services, technical and trade-related services. The credit side records the other business services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.11 Personal, cultural and recreational services: referto transactions of personal, cultural and recreational services between residents and non-residents, including audiovisual and related services (films, radio, television programs and music recordings) and other personal, cultural and recreational services (health, education, etc.). The credit side records the related services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.12 Government goods and services n.i.e: refer to various goods and services provided and purchased by governments and international organizations not included in other categories of goods and services. The credit side records the goods and services not included elsewhere and supplied by the Chinese residents to non-residents, and vice versa for debit side. 2020-05-29/en/2020/0529/1689.html