-
As at the end of March 2025, China’s external financial assets reached USD 10697.8 billion, external financial liabilities reached USD 7085.4 billion, and net external assets totaled USD 3612.4 billion. In the external financial assets, direct investment assets amounted to USD 3276.5 billion, portfolio investment assets, USD 1581.8 billion, financial derivative assets, USD 21.1 billion, other investment assets, USD 2284.5 billion, and reserves assets, USD 3533.9 billion, accounting for 31 percent, 15 percent, 0.2 percent, 21 percent and 33 percent of external financial assets respectively. In external liabilities, direct investment liabilities were USD 3655.8 billion, portfolio investment liabilities, USD 2061.4 billion, financial derivative liabilities, USD 28.7 billion and other investment liabilities, USD 1339.5 billion, accounting for 52 percent, 29 percent, 0.4 percent and 19 percent of the external financial liabilities respectively. In SDR terms, China’s external financial assets and liabilities reached SDR 8051.3 billion and SDR 5332.6 billion respectively, and external net assets totaled SDR 2718.8 billion at the end of March 2025.(End) China's International Investment Position, End of March 2025 Item Line No. Position in 100 million USD Position in 100 million SDR Net Position 1 36124 27188 Assets 2 106978 80513 1 Direct Investment 3 32765 24660 1.1 Equity and Investment Fund Shares 4 28646 21559 1.2 Debt Instruments 5 4119 3100 1.a Financial Sectors 6 4504 3390 1.1.a Equity and Investment Fund Shares 7 4165 3135 1.2.a Debt Instruments 8 339 255 1.b Non-financial Sectors 9 28261 21270 1.1.b Equity and Investment Fund Shares 10 24481 18425 1.2.b Debt Instruments 11 3780 2845 2 Portfolio Investment 12 15818 11905 2.1 Equity and Investment Fund Shares 13 9849 7413 2.2 Debt Securities 14 5969 4492 3 Financial Derivatives (other than reserves) and Employee Stock Options 15 211 159 4 Other Investment 16 22845 17194 4.1 Other Equity 17 99 75 4.2 Currency and Deposits 18 5604 4217 4.3 Loans 19 8719 6562 4.4 Insurance, Pension, and Standardized Guarantee Schemes 20 326 245 4.5 Trade Credit and Advances 21 7008 5274 4.6 Others 22 1089 820 5 Reserve Assets 23 35339 26597 5.1 Monetary Gold 24 2296 1728 5.2 Special Drawing Rights 25 539 406 5.3 Reserve Position in the IMF 26 101 76 5.4 Foreign Currency Reserves 27 32407 24390 5.5 Other Reserve Assets 28 -4 -3 Liabilities 29 70854 53326 1 Direct Investment 30 36558 27514 1.1 Equity and Investment Fund Shares 31 33936 25541 1.2 Debt Instruments 32 2621 1973 1.a Financial Sectors 33 2075 1562 1.1.a Equity and Investment Fund Shares 34 1908 1436 1.2.a Debt Instruments 35 167 126 1.b Non-financial Sectors 36 34483 25952 1.1.b Equity and Investment Fund Shares 37 32028 24105 1.2.b Debt Instruments 38 2454 1847 2 Portfolio Investment 39 20614 15514 2.1 Equity and Investment Fund Shares 40 12787 9624 2.2 Debt Securities 41 7827 5890 3 Financial Derivatives (other than reserves) and Employee Stock Options 42 287 216 4 Other Investment 43 13395 10081 4.1 Other Equity 44 0 0 4.2 Currency and Deposits 45 4784 3600 4.3 Loans 46 3209 2415 4.4 Insurance, Pension, and Standardized Guarantee Schemes 47 306 230 4.5 Trade Credit and Advances 48 3748 2821 4.6 Others 49 868 653 4.7 Special Drawing Rights 50 481 362 Notes:1. This table employs rounded-off numbers. 2.Net International Investment Position refers to assets minus liabilities. Positive figure refers to net assets, and negative figure refers to net liabilities. 3.The SDR denominated data is converted from the USD denominated data, using the exchange rate of SDR against USD at the end of the quarter. 4.The IIP data is revised regularly; please find the latest data in “Data and Statistics”. 2025-06-27/en/2025/0627/2316.html
-
In the first quarter of 2025, China's current account registered a surplus of RMB 1187.4 billion, and the capital and financial accounts recorded a deficit of RMB 1009.4 billion. In the US dollar terms, in the first quarter, China's current account recorded a surplus of USD 165.4 billion, including a surplus of USD 237.5 billion under trade in goods, a deficit of USD 59.3 billion under trade in services, a deficit of USD 15.5 billion under primary income and a surplus of USD 2.8 billion under secondary income. The capital and financial accounts registered a deficit of USD 140.7 billion, including a deficit of USD 73.1 million under the capital account, and a deficit of USD 140.6 billion under the financial account. In SDR terms, in the first quarter, China posted a surplus of SDR 126.0 billion under the current account, and a deficit of SDR 106.8 billion under the capital and financial accounts.(End) Abridged Balance of Payments, Q1 2025 Item Line No. RMB 100 million USD 100 million SDR 100 million 1. Current Account 1 11874 1654 1260 Credit 2 72030 10037 7645 Debit 3 -60157 -8383 -6384 1. A Goods and Services 4 12788 1782 1357 Credit 5 66449 9260 7053 Debit 6 -53661 -7478 -5695 1.A.a Goods 7 17047 2375 1809 Credit 8 59264 8258 6290 Debit 9 -42217 -5883 -4480 1.A.b Services 10 -4259 -593 -452 Credit 11 7185 1001 763 Debit 12 -11444 -1595 -1215 1.B Primary Income 13 -1111 -155 -118 Credit 14 4961 691 526 Debit 15 -6072 -846 -644 1.C Secondary Income 16 198 28 21 Credit 17 621 86 66 Debit 18 -423 -59 -45 2. Capital and Financial Account 19 -10094 -1407 -1068 2.1 Capital Account 20 -5 -1 -1 Credit 21 2 0 0 Debit 22 -7 -1 -1 2.2 Financial Account 23 -10089 -1406 -1068 Assets 24 -13222 -1842 -1400 Liabilities 25 3133 437 333 2.2.1 Financial Account Excluding Reserve Assets 26 -12323 -1717 -1306 2.2.1.1 Direct Investment 27 -2430 -338 -259 Assets 28 -3471 -484 -369 Liabilities 29 1041 145 109 2.2.1.2 Portfolio Investment 30 -4390 -612 -467 Assets 31 -6469 -901 -687 Liabilities 32 2079 290 220 2.2.1.3 Financial Derivatives (other than reserves) and Employee Stock Options 33 -534 -74 -57 Assets 34 -416 -58 -44 Liabilities 35 -118 -16 -12 2.2.1.4 Other Investment 36 -4969 -693 -523 Assets 37 -5100 -710 -539 Liabilities 38 131 18 16 2.2.2 Reserve Assets 39 2234 311 238 3. Net Errors and Omissions 40 -1780 -248 -192 Notes: 1. The statement is compiled according to BPM6. Reserve assets are included in capital and financial accounts. 2."Credit" is presented as positive value while "debit" as negative value, and the difference is the sum of the "Credit" and the "Debit". All items herein refer to difference, unless marked with "Credit" or "Debit". 3. The RMB denominated quarterly BOP data is converted from the USD denominated BOP data for the quarter using the period average central parity rate of RMB against USD. The quarterly accumulated RMB denominated BOP data is derived from the sum total of the RMB denominated data for the quarters. 4. The SDR denominated quarterly BOP data is converted from the USD denominated BOP data for the quarter using the period average exchange rate of SDR against USD.The quarterly accumulated SDR denominated BOP data is derived from the sum total of the SDR denominated data for the quarters. 5. In the first quarter of 2025, the equity other than reinvestment of earnings under direct investment liabilities (credit) was USD 18.8 billion (RMB 134.9 billion). 6.This statement employs rounded-off numbers. 7. For detailed data, please see the section of “Data and Statistics” at the website of the SAFE. 8. The BOP data is revised regularly; please find the latest data in “Data and Statistics”. 2025-06-27/en/2025/0627/2315.html
-
According to the statistics of the State Administration of Foreign Exchange (SAFE), the Chinese foreign exchange market (excluding foreign currency pairs, the same below) recorded total transactions of RMB 25.55 trillion (equivalent to USD 3.56 trillion) in June 2025. In terms of markets, the transactions volume of client market was RMB 3.68 trillion (equivalent to USD 0.51 trillion), and the transactions volume of interbank market was RMB 21.88 trillion (equivalent to USD 3.05 trillion). In terms of products, the cumulative transactions volume of the spot market was RMB 8.91 trillion (equivalent to USD 1.24 trillion), and that of the derivatives market was RMB 16.64 trillion (equivalent to USD 2.32 trillion). From January to June 2025, a total of RMB 150.87 trillion (equivalent to USD 21.00 trillion) was traded in the Chinese foreign exchange market. 2025-07-25/en/2025/0725/2321.html
-
External Financial Assets and Liabilities of China's Banking Sector(As of March 31,2025) 2025-06-26/en/2025/0626/2313.html
-
According to the statistics of the State Administration of Foreign Exchange (SAFE), the Chinese foreign exchange market (excluding foreign currency pairs, the same below) recorded total transactions of RMB 25.03 trillion (equivalent to USD 3.48 trillion) in May 2025. In terms of markets, the transactions volume of client market was RMB 3.42 trillion (equivalent to USD 0.48 trillion), and the transactions volume of interbank market was RMB 21.61 trillion (equivalent to USD 3.00 trillion). In terms of products, the cumulative transactions volume of the spot market was RMB 9.45 trillion (equivalent to USD 1.31 trillion), and that of the derivatives market was RMB 15.58 trillion (equivalent to USD 2.17 trillion). From January to May 2025, a total of RMB 125.31 trillion (equivalent to USD 17.44 trillion) was traded in the Chinese foreign exchange market. 2025-06-27/en/2025/0627/2318.html
-
Recently, the second Committee Meeting of China-Brazil Cooperation Fund for the Expansion of Production Capacity for Sustainable Development (the "Fund") was held in Beijing. The meeting was co-chaired by Deputy Administrator of State Administration of Foreign Exchange Li Hongyan and Vice Minister of Minister of Finance of Brazil Tatiana Rosito. The meeting reviewed the Fund’s progress since the first Committee Meeting held in September, 2024, and a series of projects in the sectors of climate, renewable energy and infrastructure have been integrated as the Fund’s second deliverables, encompassing multiple investment vehicles such as equity, debt, fund, etc. Both sides agreed to hold the next Committee Meeting in Brazil in 2026. 2025-07-08/en/2025/0706/2319.html
-
Editors notes: Our administration has published questions and answers about popular topics regarding foreign exchange management policies in periodicals and has analyzed and interpreted ideas and concepts relating to foreign exchange management in response to questions of public concern about foreign exchange management and foreign exchange reserves. This move has been widely acknowledged and welcomed by the media and the general public. With the deepening of the reform and opening up, the general public is becoming more closely involved in foreign exchange business. Therefore, we will continue to popularize knowledge about foreign exchange management and interpret the relevant policies, so that the general public will understand foreign exchange management in plain language. As for the recent de-listing of Fannie Mae and Freddie Mac (hereinafter referred to as Fannie and Freddie) from the New York Stock Exchange (NYSE), we have clearly stated in early remarks that our foreign exchange reserves did not invest in Fannie and Freddie stocks. The bond prices for Fannie and Freddie are stable and repayments for the investment and interest are being made according to schedule. Some readers hope to know more about Fannie and Freddie as well as to learn about the stocks and bonds of the two companies. Therefore, our administration has compiled some questions and answers about relevant information for your reference. Q1: What kinds of enterprises are Fannie and Freddie? How are they positioned in the American financial system? A: Fannie and Freddie are the two biggest mortgage lenders in the United States, i.e., the Federal National Mortgage Association (Fannie Mae) and the Federal Home Mortgage Corporation (Freddie Mac). Fannie and Freddie are government-sponsored enterprises established through legislation by the U.S. Congress. The legislation is aimed at providing stable and constant support to the housing mortgage loan markets and improving the accessibility of home mortgage loans. The businesses operated by the two companies play an important role in American housing policy. U.S. housing policy is public. After the Federal Home Loan Bank System was established in 1932, a secondary market of housing mortgages came into being, with Fannie and Freddie as the primary players and private mortgage finance agencies as supplementary players, to provide financial security for housing construction by combining government intervention and market-oriented operations. Fannie and Freddie are the pillars of the American real estate market. Real estate loans underwritten or purchased by the two companies account for 50 percent of the American real estate market; this figure reached over 80 percent after the outbreak of the sub-prime lending crisis. Fannie and Freddie are not only important to the American real estate market, but also are crucial to the stability of the financial market. The assets owned or guaranteed by the two companies total about USD 5.5 trillion. Over 70 percent of the bond investors in Fannie and Freddie are American investors, such as pension funds, mutual funds, commercial banks, and insurance companies, which are of overriding importance to the U.S. financial system. At the initial stage after the outbreak of the sub-prime lending crisis, the U.S. Government still relied on these two companies to alleviate the crisis and it adopted such measures as lowering their capital requirements and expanding the maximum single loan limit to enhance their role in resolving the crisis. With the deepening of the crisis, the American real estate market experienced dramatic changes; furthermore, due to poor management, the two companies encountered problems. Therefore, the U.S. Government took over Fannie and Freddie, indicative of its support for the companies. At present, in addition to the injection of USD 145 billion in the preferred stocks of Fannie and Freddie by the Treasury, the U.S. Government has promised limitless injections for the two companies by 2012 to offset net losses. Thereafter, the two firms may still apply to the Treasury for injections within the limit of USD 200 billion respectively. In addition, the Federal Reserve and the Treasury purchased a total of over USD 1.4 trillion of Fannie and Freddie bonds, accounting for 25 percent of the total assets owned and guaranteed by the two companies, thus making them the biggest bond holders of Fannie and Freddie. The U.S. Government has promised on several occasions that the capacity of Fannie and Freddie to repay relevant debts in the face of any future reforms will be guaranteed. During the recent second round of the Sino-U.S. Strategic and Economic Dialogue, the U.S. Government stated it will continue to enhance supervision over government- sponsored enterprises so as to ensure that they have adequate capital and a capacity to carry out their financial liabilities. The U.S. Government will listen to all stakeholders and adopt proper measures to further reform so as to ensure that government- sponsored enterprises have the capacity to fulfill their liabilities. Q2: What about the stocks issued by Fannie and Freddie? Why were they de-listed? A: Fannie and Freddie were listed on the New York Stock Exchange in 1970 and 1989 respectively and Fannie Mae was also listed on the Chicago Stock Exchange. In addition to preferred stock, the amount of Fannie and Freddie common stocks totals about 1.14 billion and 0.65 billion respectively. During the ten years before the 2007 sub-prime lending crisis, the share price of the two companies remained at USD 50-70 per share and the dividends were distributed regularly; therefore, the stocks were popular with investors. After the outbreak of the sub-prime lending crisis, Fannie and Freddie suffered heavy losses due to the continuous slowdown in the American real estate market and their share prices declined dramatically. With the deepening of the crisis, the U.S. Government took over the two companies and their share prices fell to lower than USD 1. Thereafter, their share prices fluctuated around USD 1 for a long time. Since this mid-May, the average closing price of Fannie Mae has been lower than USD 1 for thirty consecutive trading days. According to the regulations of the New York Stock Exchange, under such circumstances the company may choose to de-list or to adopt measures such as a reverse split so as to restore the share price to over USD 1. The U.S. Government, the biggest shareholder of Fannie and Freddie, held 80 percent of the total shares, whereas the market value of the shares held by other shareholders was no more than USD 1 billion. Actually, Fannie and Freddie were no longer operated under a common business model. Under these circumstances, the regulatory authority of Fannie and Freddiethe Federal Housing Finance Agencydeclared that the stocks of the two companies would be de-listed on July 7, 2010. The shares of the two companies would continue to be traded on the OTC market after the de-listing. Q3: What agency bonds are issued by Fannie and Freddie? What about their market performance? A: The common agency bonds issued by Fannie and Freddie refer to the preferred unsecured debentures issued by the two companies. Fannie and Freddie raise funds by issuing this kind of bonds, investing in home mortgage loans and other securitization products. The two firms have always been considered to be U.S. Government agencies. Legal contracts signed with the U.S. Government to inject funds and increase their capital were not affected after Fannie and Freddie were de-listed from the NYSE. Fannie and Freddie bonds still maintain a top credit ratingAAA. Bonds issued by Fannie and Freddie still have a large market capacity and good liquidity, so they are important targets of bond investments on the international market. At the end of 2008, the Federal Reserve announced it would buy USD 200 billion of agency bonds issued by Fannie and Freddie, which further improved the safety and liquidity of the bonds and safeguarded steady market operations. The repayment of capital and interest for old bonds and the issuance of new bonds are both very normal. Take Fannie Mae for example. Fannie Mae issued USD 70.5 billion of agency bonds in 2009, 2.2 times the amount issued in 2007. In terms of the locations of the investors, about 73 percent of the investors were from the U.S.; in terms of the types of investors, institutional investors such as mutual funds, insurance funds, and pension funds accounted for about 63 percent and central banks accounted for about 19 percent. The earnings from Fannie and Freddie agency bonds are quite stable. As revealed by the Market Index, which is mainly comprised of agency bonds issued by Fannie and Freddie, the cumulative rate of return stood at 10.7 percent in 2008 and 2009 when the crisis was at its peak and since 2010 the rate of return has remained at 3.9 percent Q4: What are the mortgage-backed securities guaranteed by Fannie and Freddie? What about their performance in the market? A: Mortgage Backed Securities (MBS) refer to securities collateralized by home mortgage loans issued by financial institutions. Government-sponsored enterprises such as Fannie and Freddie provide guarantees to MBS that meet all their standards and secured MBS are called agency MBS. Compared with Fannie and Freddie agency bonds, the MBS guaranteed by Fannie and Freddie are not only secured by Fannie and Freddie credit, but they are also backed by the mortgage pool for repayment, so they have a double assurance. At the end of 2008, the Federal Reserve announced it would buy USD 1.25 trillion of MBS guaranteed by Fannie and Freddie, which further improved market liquidity. This purchase plan has now been completed. The market responded positively to the move. The repayment of capital and interest of old bonds and the issuance of new bonds are both very normal. The earnings from MBS guaranteed by Fannie and Freddie are stable. The cumulative rate of return of the U.S. Agency MBS Market Index, which is mainly comprised of MBS guaranteed by Fannie and Freddie, was 14.9 percent from 2008 to 2009, and since 2010 the rate of return has remained at 4.6 percent. Q5: What about the performance of Fannie and Freddie bonds after the de-listing of their stocks from the NYSE? A: The stocks of Fannie and Freddie are different from their bonds. Generally, the stock represents the ownership of the company, whereas the bond represents the debt of the company. The two are traded on different markets. The bond price of Fannie and Freddie was not affected by the de-listing of Fannie and Freddie stocks after the de-listing was announced on June 16, 2010 As for market performance, the de-listing does not have a negative influence on their bonds; in fact, the spreads between agency bonds and the MBS in different terms and U.S.Treasuries have been narrowed and the bond price has gone up. Taking the 30-year agency MBS market index, for example, the market quotation was up about 0.8 percent on July 13 from when the de-listing was first announced. In addition, new bond financing activities were not affected after the de-listing of Fannie and Freddie stocks was announced. For example, Fannie issued USD 6 billion of 3-year maturity agency bonds on July 8, and since July Fannie and Freddie have guaranteed USD 36.6 billion of MBS. In general, the new bonds issued by Fannie and Freddie sell well. Trading is active on the secondary market and liquidity is adequate. 2010-07-16/en/2010/0716/941.html
-
Editor's Note: With the deepening of Chinas reform and opening, foreign exchange is becoming more closely related to the interests of the public. The State Administration of Foreign Exchange (SAFE) proposed that continual efforts should be made to disseminate knowledge about foreign exchange administration and to interpret relevant policies so the public will better understand Chinas foreign exchange administration. In July 2010, the SAFE compiled Q&As about hot issues regarding investment in the U.S.-based Fannie Mae and Freddie Mac that received wide and enthusiastic support from the public. On February 11, 2011, the Treasury Department and the U.S. Housing and Urban Development Department issued a white paper on the reform of Fannie Mae and Freddie Mac, which aroused widespread concern that Chinas foreign exchange reserve investments in the two GSEs may be affected. We responded to this concern and have found that so far no losses have been incurred in Chinas bond investments in the above two companies. To allow readers to better understand the latest developments, we once again have compiled Q&As about related issues for your reference. Q1: Why did the United States issue the white paper on the reform of Fannie Mae and Freddie Mac at this time? A: Since the outbreak of the financial crisis there have been appeals and disputes over the reform of Fannie Mae and Freddie Mac. The Congressional Dodd-Frank Reform Bill, enacted in July 2010, mandated that the government submit a proposal on the reform of Fannie Mae and Freddie Mac. In 2010 the U.S. Treasury Department held a seminar on the reform of housing financing, proposing that the government submit a preliminary reform plan to the Congress in early 2011. The issuance of the white paper is in accordance with this plan. Q2. Are there any new ideas proposed in the white paper about the orientation of the reform? A: We noticed in the white paper that the reform of the U.S. housing financial market is primarily targeted at changing the role of the government in regulating the market. The white paper proposes that the government confine its responsibilities to such areas as strengthening its regulatory efforts, protecting the interests of consumers, giving special support to middle- and low-income homeowners and tenants, maintaining market stability, and combating the financial crisis. The U.S. government will gradually exit from the housing financial market and will endeavor to create conditions for private capital to play a dominant role. In particular, we noted that there are no changes with regard to the U.S. government commitment to support the two GSEs, which means that the government will guarantee that the two GSEs will have sufficient capital to exit from the market. The reform plan primarily proposes that the government will bring into play the functions of the private sector to bolster the housing financial market, maintain the equity and effectiveness of the housing market, and build up a well-organized system for supporting housing loans and promoting the reform in a responsible and prudent manner. The reform relates directly to whittling away the functions of the two GSEs in the housing financial market and proposes three alternatives to the current model of housing financing for the two GSEs. It will take quite a long time from the issuance of the white paper to implementation, which will entail a series of procedures set forth by the U.S Congress and the U.S. government. It is for this reason that thus far no detailed timetable for the reform has been worked out by the government. Analysis indicates that implementation may begin after 2012 provided that everything proceeds smoothly. Q3: What was the response of the financial market after issuance of the white paper? A: As of February 11, the financial market actively responded to the issuance of the white paper. By the time of closing in New York, there was a widespread increase in the price of bonds issued by the two GSEs. The increase surpassed that of Treasuries, with the highest reaching up to 0.5%. Q4: There are some concerns that after issuance of the white paper Chinas bond investments in the two GSEs with its foreign exchange reserves will suffer losses. What do you think about the security of these investments? A: As government-sponsored enterprises incorporated by congressional legislation, Fannie Mae and Freddie Mac have always been the principal instruments of U.S. housing financial policies. Even after being taken over by the U.S. government due to the financial crisis, the two companies have remained the primary channels of Americas housing financing, through which the overwhelming bulk of newly-supplemented mortgage loans are provided. In addition to its position as a colossal investor injecting hundreds of billions of dollars into the two GSEs, the U.S. government is also the largest holder of bonds issued by the two companies, with total bond investment topping USD1.6 trillion. In view of the crucial role of Fannie Mae and Freddie Mac in bolstering the American housing market, accelerating the economic restoration, and maintaining financial stability, the white paper underscores that prudential measures will be taken in the reform to ensure the capital sufficiency of the two GSEs to completely fulfill their guaranty obligations and debt repayments. The government will not pursue any policies or measures that may impair the capability of the two companies to carry out their obligations. In determining a timetable for the reform, the U.S. government will take into account many factors, such as the process of economic restoration and the conditions in the financial market. As for China, our country has always complied with the principle of security, liquidity, value maintenance, and appreciationin handling its foreign exchange reserves. Prudent efforts have been made to implement multiple investment strategies as a way to guard against potential risks. As a result, the main potential risks to the bond investments in the two GSEs have been effectively defused. 2011-02-12/en/2011/0212/984.html
-
To facilitate public understanding of Chinese circumstances regarding cross-border fund flows, especially the scale, channels, and influence of abnormal cross-border fund flows, the group for the analysis of the balance of payments of the State Administration of Foreign Exchange (SAFE) recently issued the Report on the Monitoring of Chinas Cross-border Fund Flows in 2010 (hereinafter referred to as the Report). The Report provides a comprehensive and in-depth analysis of the general conditions and major items in Chinas cross-border fund flows during the period from 2001 to 2010, in terms of the balance of payments, the cross-border receipts and payments, and the settlement and sales of foreign exchange. The Report states that since implementation of the reform and opening-up policy, China has seen rapid development of its foreign-related economy. Economic contacts have increased and the size of the cross-border fund flows has multiplied. The sizable net inflows of cross-border funds are basically commensurate with the development of the real economy. Although there have been frequent occurrences of small inflows of illegal hot money, centralized and large-scale fund inflows of hot moneythrough legitimate financial institutions have not been found. The Report estimates the size of Chinas hot moneyflows. During the past 10 years, the trade surplus, the net inflow of direct investment, the return on overseas investment, overseas listings of domestic enterprises, and other legitimate foreign-related economic activities in compliance with the regulations basically accounted for the countrys increase in foreign exchange reserves. So far, the sustained net inflows of cross-border funds are deemed to be the result of the countrys rapid and steady economic growth. Arbitrage conducted by institutions and individuals featuring conversion of assets into the home currency and liabilities into the foreign currencies has, in part, increased the volatility of cross-border fund flows. The Report states that the orientation toward a basic equilibrium in the balance of payments is explicitly one of the major goals of economic and social development during the 12th Five-Year Plan according to the Proposal of the CPC Central Committee on Formulating the 12th Five-Year Plan for National Economic and Social Development. The country will promote a basic equilibrium in the balance of payments by speeding up economic restructuring, expanding domestic demand (particularly consumer demand), reducing the surplus in the balance of payments, as well as broadening the channels for fund outflows. The country will concentrate on the scientific development of economy and society as well as on acceleration of the transformation of the economic growth model in order to achieve that aim. The Report states that maintaining an equilibrium and the steady development of the macro-economy, perfecting macro-economic control measures, and improving the financial market system are of fundamental importance to avert the impacts of cross-border capital flows. Chinas capital controls have played a vital role in combating the global financial crisis as well as in maintaining the stability of the foreign-related economy and finance. With the deepening of the open economy, there have been increasing challenges to the monitoring of cross-border fund flows. During recent years, active efforts have been made by the foreign exchange authorities to establish a framework to balance foreign exchange administration, to moderately tighten the policies on foreign exchange collection and settlement and external debt management, to struggle against the inflow of illegal funds, and to broaden the channels for fund outflows. The foreign exchange authorities will continue to keep a close eye on cross-border fund flows, strengthen supervision of the regulatory compliance of cross-border fund flows, broaden the channels for the outflow of foreign exchange funds, diversify instruments to avoid exchange-rate risks, improve plans to guard against the risks, and take active steps to prevent and defuse the risks caused by cross-border fund flows. The group for analysis of the balance of payments of the SAFE will issue a Report on the Monitoring of Chinas Cross-border Fund Flows on a yearly basis. To facilitate public understanding of Chinas circumstances regarding cross-border fund flows, the SAFE will, based on monthly release of data on aggregate cross-border receipts and payments and foreign exchange settlement and sales by banks on behalf of their clients, make public the time-series data categorized based on the transaction items about the aforesaid operations during the period from 2001 to 2010, and will publicize data on detailed items on a monthly basis as of February 2011. 2011-02-17/en/2011/0217/985.html
-
According to statistical data released by the State Administration of Foreign Exchange (SAFE), in 2010 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD1330.4 billion and USD932.7 billion respectively. The surplus amounted to USD397.7 billion. In December 2010, the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD146.2 billion and USD94.7 billion respectively. The surplus amounted to USD51.5 billion. In the same year, foreign-related receipts and payments by banks on behalf of clients amounted to USD1885.3 billion and USD1587.3 billion respectively; and the surplus of foreign-related receipts and payments reached USD298 billion. The top 5 currencies in terms of aggregate foreign-related receipts and payments for the year were: USD (83.18%), Euro (5.41%), HKD (5.12%), JPY (3.08%), and RMB (1.69%). In December 2010, foreign-related receipts and payments by banks on behalf of clients amounted to USD212 billion and USD183 billion respectively and the surplus reached USD29 billion. Appendix: Definition of terms and interpretation. Balance of payments (BOP) refers to all economic transactions occurring between residents and non-residents in China, including all financial transactions and barter transactions resulting in any changes to assets and liabilities between them. Foreign exchange settlement and sales by banks on behalf of clients refers to the business of foreign exchange settlement and sales conducted by designated foreign exchange banks for their clients, excluding data on foreign exchange settlement and sales conducted by designated foreign exchange banks on their own behalf and data on inter-bank foreign exchange market transactions. The time when the conversion between the Renminbi and the foreign currency occurs shall be regarded as the time point for the statistics. Specifically, settlement of foreign exchange is the process by which the owners of the foreign exchange sell the exchange to the designated foreign exchange banks; the sale of foreign exchange is the process by which the exchange is sold by the designated foreign exchange banks to the users of the foreign exchange. The balance between the settlement and sales of foreign exchange is the offset balance between the settlement and sales of foreign exchange, which will be balanced by the banks through bank transactions on the inter-bank foreign exchange market. This is the major reason for changes in the amount of foreign exchange reserves, which is not equivalent to the net change in foreign exchange reserves during the same period. The banks settlements and sales of foreign exchange for clients are not counted in compliance with the principle applicable to transactions between residents and non-residents, which only includes transactions between banks and their clients in domestic and foreign currencies, i.e., exchanges and transactions between RMB and foreign exchange. Their statistical scope differs from that of the transactions under the balance of payments. Foreign-related receipts and payments by banks on behalf of clients refers to receipts and payments occurring between domestic non-bank resident institutions/ individuals (collectively called the non-bank section) and non-resident institutions/individuals through domestic banks, exclusive of the receipts and payments in cash and foreign-related receipts and payments by the banks themselves. They include: cross-border collections and payments between non-bank sections and non-residents through domestic banks (including RMB and foreign exchange), and domestic collections and payments between non-bank sections and non-residents through domestic banks (currently including collections and payments in foreign exchange and collections and payments in RMB under the RMB settlement item for cross-border trade). The statistics are collected at the time when the clients conduct the foreign-related collections and payments at the domestic banks. Specifically, foreign-related collections by banks for their clients refer to funds collected by non-bank sections from non-residents via domestic banks; the banksexternal payments for their clients refer to the funds paid by non-bank sections to non-residents through domestic banks. Although foreign-related collections and payments by banks for their clients constitute an integral part of the balance of payment statistics, they differ, in principle, from the balance of payment statistics. The capital receipt and payment system is the statistical principle for the banksforeign-related collections and payments for their clients, whereas the accrual basis is the statistical principle for the balance of payments. The banksforeign-related collections and payments for their clients only reflect the cash flows between domestic non-bank sections and non-residents and do not reflect barters and foreign-related transactions conducted by the banks themselves, and their statistical scope is smaller than that of the balance of payments. 2011-01-27/en/2011/0127/980.html