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Q: Recent media reports say China is considering stopping buying or buying less US treasury bonds. Is this true? A: We have noted it from some media reports. We believe this may be a citation from wrong sources or even false news. China has always made investment with or managed foreign exchange reserves following the principle of diversification and fragmentation, in order to ensure the overall security, value preservation and growth of foreign exchange assets. Like other investments, investing in US treasury bonds with foreign exchange reserves is a market behavior that is subject to professional management based on market situations and investment needs. For both foreign exchange reserves and the market involved, China's foreign exchange reserves operation and management authorities are responsible investors, and their investing activities have boosted the stability of global financial markets and the value preservation and growth of China's foreign exchange reserves. 2018-01-11/en/2018/0111/1394.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange settlement and sales as well as their foreign-related receipts and payments for customers for September 2017. Its press spokesperson answered media questions on relevant issues. Q 1: Could you brief us on the characteristics of China's cross-border capital flows in the first three quarters of this year? A: China's cross-border capital flows found an equilibrium in the first three quarters, and the supply and demand of foreign exchange has been balanced recently. The main characteristics are as follows: First, the deficits in banks' settlement and sales of foreign exchange and in their foreign-related receipts and payment contracted significantly. In the first three quarters, the deficit in banks' settlement and sales was USD 112.9 billion, down by 54% year on year, versus a deficit of USD 3.8 billion in August, and a surplus of USD 300 million in September. In the same period, banks' foreign-related receipts and payments for customers recorded a deficit of USD 111.5 billion, down by 56% year on year, compared with a deficit of USD 3.5 billion in August, and a further deficit of USD 1.7 billion in September. Second, the sales rate of foreign exchange plummeted on a year-on-year basis and corporate demand for foreign exchange financing was on the rise. In the first three quarters, the foreign exchange sales rate that measures the motives of companies for purchasing foreign exchange, or the ratio of customers' purchase of foreign exchange from banks to customers' foreign-related foreign exchange payments, reached 66%, down by eight percentage points year on year. In particular, the rate was 68%, 67% and 63% in the first, second and third quarters respectively, suggesting companies are more sensible in buying foreign exchange, and have conducted foreign exchange financing based on demand, with their purchases of foreign exchange to service debt becoming a rarer case. The domestic outstanding foreign exchange loans by the end of September dropped slightly from the end of the previous year, and went down by more than USD 70 billion year on year. Third, the sales settlement rate rose on a year-on-year basis while maintaining stability, and companies' and individuals' desire to hold foreign exchange was weakened. In the first three quarters, the sales settlement rate that measures the desire to settle foreign exchange, or the ratio of customers' sales of foreign exchange to banks to customers' foreign-related foreign exchange receipts was 63%, up by two percentage points year on year. The ratio was 62%, 63% and 64% in the first, second and third quarters respectively. As for companies' domestic foreign exchange deposits, the balance rose by nearly USD 40 billion in the first quarter, compared with an increase of USD 9 billion in the second quarter and a decrease of USD 25.3 billion in the third quarter. According to the individuals' domestic foreign exchange deposits, the balance rose slightly by USD 300 million in the first quarter, versus a deficit of USD 2 billion in the second and third quarters respectively, indicating a weaker desire to hold foreign exchange among domestic market participants, and a rise in using self-owned foreign exchange in making external payments. Fourth, banks' forward foreign exchange sales and settlement recorded a surplus. In the first three quarters, the value of foreign exchange contracted for forward settlement by banks for customers grew 1.2 times year on year, while that of foreign exchange contracted for forward sales dropped by 5%, leading to a surplus of USD 7.7 billion, compared with a deficit of USD 58.1 billion for the same period last year, indicating markedly weaker expectations of RMB depreciation, and the demand for forward foreign exchange settlement and sales was adjusted. Fifth, the foreign exchange market recorded a basic equilibrium between supply and demand, boosting the balance of foreign exchange reserves to rise continuously. As at the end of September, China's balance of foreign exchange reserves hit USD 3.1085 trillion, up by USD 98 billion from the end of 2016. In particular, the balance of foreign exchange reserves went up for eight consecutive months from February to September. Q2: Could you explain why China's cross-border capital flows have been further balanced recently? What would you say about the prospects? A: China's cross-border capital flows have been increasingly balanced since the beginning of this year, which indicates the developments and changes in the economic and financial environment both at home and abroad. Firstly, China, perseverant in implementing new development concepts in building its economy, deepens the supply-side structural reform, enhances the quality and benefits of developments, and optimizes its economic structure, leading to an obvious trend of more stable economy with a good momentum for growth and stronger internal foundation. Specifically, the new open economic system has been refined, the reform and opening up measures in the financial market have been implemented and the equilibrium of cross-border capital flows has been boosted, including the optimization and improvement of the RMB exchange rate market formation mechanism, introduction of a series of policies for fueling the growth of foreign-owned enterprises, the official launch of the Bond Connect between mainland China and Hong Kong, as well as the inclusion of A shares in the MSCI Emerging Markets index. Secondly, the global economy continues to recover, and the financial markets have been less fluctuating, suggesting a stable external environment. The latest projections from the International Monetary Fund (IMF) show that the global economy will grow at a rate of 3.6% in 2017, 0.4 percentage point faster than in 2016. Moreover, although the FED has raised the interest rates for two times thus far and plans to shrink the balance sheet, market expectations are stable, and the USD exchange rates have been depreciating since the beginning of this year. Going forward, China's cross-border capital flows will continue to stay stable, which is supported by three fundamentals. Firstly, the economic fundamentals will be stronger. Since the beginning of this year, international organizations have revised upward their projections of China's economy for 2017 many times. The IMF, for example, increased its expectations from 6.5% that was projected at the beginning of this year to the current 6.8%, and the World Bank, from 6.5% to 6.7%, denoting the international community is more optimistic about China's economy. China will continue to implement the new development concepts and build a modern economic system to boost the sustained and healthy development of the economy. Secondly, the policy fundamentals will provide guarantee. China will participate more in and boost economic globalization and developed a higher-level open economy. On the one hand, along with the improving business environment in China and the implementation of opening up policies, foreign capital inflows will continue to stay stable. On the other hand, the domestic bond and stock markets will cement their ties with global markets and relevant facilitation measures will be introduced, which will be helpful to promote overseas investors to invest in the domestic capital market. Thirdly, the market fundamentals will be strengthened. The enhancement of the RMB exchange rate formation mechanism, further diversified market participants, and weaker expectations of one-way sustained appreciation and depreciation will help to curb the significant fluctuations of cross-border capital and ensure the overall equilibrium between supply and demand of foreign exchange. The above fundamentals will continue to play a fundamental role in the future. In particular, after the success of the 19th CPC National Congress, China will secure a decisive victory in building a moderately prosperous society to achieve its first centennial goals and open up a new chapter to build a modern socialist country with Chinese characteristics to move on to achieve its second centennial goals. Under such circumstances, there surely will be a stronger confidence in the long-term economic and social development of China in both domestic and overseas markets, and a more solid foundation for stable cross-border capital flows in China. Q3: What impact will the Fed's shrinking of the balance sheet on China's cross-border capital flows? A: The Fed's interest rate hikes and shrinking of the balance sheet will not fundamentally shake the stability of China's cross-border capital flows. Since the Fed's first interest rate hiked at the end of 2015, China has witnessed a process from outflows to equilibrium in its cross-border capital flows. The main causes are: First, a gradual process will remain as the main characteristics of the Fed's boost to the normalization of its monetary policy. Since the Fed began to raise the interest rates, the gradual process has proved to have weakened the impact on the markets. After the September FOMC meeting, the chair of the Fed stressed in answering media questions that "the balance sheet will be shrunk in a gradual and predictable process". As a matter of fact, this accords with the economic and financial performance in the US. Given that the US' long-term economic growth prospects remain weak, an in-depth analysis shall be required on the impact of the Fed's monetary policy adjustment on its economy; the US' inflation has been low with fluctuations recently; and the rapid growth in the US' asset prices in recent years has drawn wide concern in the market that the fast adjustment of the Fed's monetary policy will prick the asset bubble. Second, the US' interest rates and exchange rates are exposed to more diversified factors, including the Fed's monetary policy adjustment. As for interest rates, after the first interest rate hike at the end of 2015, the Federal Funds rate rose by one percentage point overnight, but the longer-term interest rates have grown in a descending order, indicating market interest rate will also be impacted by the long-term prospects of economic growth. As for foreign exchange rates, there are complex contributing factors, such as the US economic performance, and the economic and financial conditions in other major economics, in addition to the Fed's monetary policy. For example, during the Fed's balance sheet expansion, the USD exchange rate did not fall continuously, but featured two-way fluctuations; but since the beginning of this year, the Fed has raised interest rates for two times, but the USD exchange rate has depreciated. Third, China has been stronger in adapting and responding to the changes in external environment. Firstly, China still has various fundamental advantages, such as relatively higher economic growth, a stable big picture, robust financial market, surplus under the current account, and adequate foreign exchange reserves. Secondly, China's ability to make response has been strengthened, such as a more remarkable momentum for growth in China's economy while maintaining stability, further opening up of domestic markets, enhanced RMB exchange rate formation mechanism, and more sensible investing and financing activities among market participants. Q4: Since the beginning of this year, China has witnessed strengthened elasticity in two-way fluctuations of the RMB exchange rate. Do you have any ideas on hedging against exchange rate risk? Will the SAFE enhance relevant education and training? A: As the RMB exchange rate is increasingly volatile, exchange rate risk management is more crucial to companies' production and operation. But some domestic enterprises have to raise their awareness of hedging against exchange rate risks: firstly, exchange rate risk shall be looked at in an objective manner. Some enterprises lack the concept of risk neutrality, and are used to betting on unilateral direction such as appreciation or depreciation, thus replacing precise risk management with subjective market judgment. Secondly, an accurate understanding of hedging shall be developed. Some enterprises are reluctant to pay for hedging, or use hedging as a profit tool, neglecting its essential function of risk aversion by locking up the impact of exchange rate uncertainties on companies' profits from primary business. The SAFE will continue to guide the market to accurately understand exchange rate risk and improve exchange rate risk management. Firstly, boosting the in-depth development of the foreign exchange market by supporting financial institutions to make innovations to serve the real economy and foreign exchange products that adapt to the market demand. Secondly, guiding banks in prudential operations and urging banks to ensure customer risk education and management. Thirdly, guiding enterprises to build an accurate awareness of exchange rate risk, develop an accurate understanding of exchange rate risk aversion instruments, and hedge exchange rate exposure, avoiding deviation from principal business and reality. Our experience and recommendation of corporate exchange rate hedging: enterprises shall adapt to the normal of two-way fluctuations of RMB exchange rate, change the uncertainties into certainties of two-way fluctuations through hedging, with a focus on primary business; enterprises shall understand their transactions, valuate derivatives before transaction and decide on the level of risk restriction; enterprises shall also engage in proper hedging, regarding derivative deals as the instruments to lock up risks rather than a way to make money. For enterprises, hedging against foreign exchange rate risk through RMB foreign exchange derivatives requires continuous education on risks to investors, and also is a process of learning from doing and accumulation. Q5: As China's cross-border capital flows are being stabilized with a good momentum, what changes will take place to the orientation of policies for foreign exchange administration? A: Going forward, foreign exchange authorities will get united around the CPC Central Committee with Comrade Xi Jinping at its core and implement the gist of the 19th CPC National Congress. They will support the unified leadership of the CPC Central Committee on finance and carry out the decisions and plans of the CPC Central Committee and the State Council. With a focus on serving the real economy, guarding against financial risks and deepening financial reform, they will strive to enhance cross-border trade and investment facilitation, boost sustained and healthy economic development, guard against cross-border capital flow risks, and safeguard China's economic and financial security, so as to make great contribution to the fulfillment of the two centennial goals and the realization of the Chinese dream of the great renewal of the Chinese nation. Two basic principles shall be adhered to in foreign exchange administration: first, foreign exchange administration shall serve the real economy and the reform and opening up, and support and boost the two-way liberalization of the financial market to enhance trade and investment facilitation. Second, efforts shall be made to guard against risks arising from cross-border capital flows, protect the macro-economy and financial stability from being impacted by disorderly and high-intensity cross-border capital flows and maintain the stability of the foreign exchange market, in a bid to create a healthy, benign, and stable foreign exchange market environment for reform and opening up. Four basic connotations shall be stressed on the orientation of policies: first, adhering to reform and opening up and refining the foreign exchange administration framework to further promote trade and investment facilitation and ramp up the efficiency and level of foreign exchange administration in serving the real economy. Second, stably realizing capital account convertibility to drive reform and opening up in finance in an active and prudent way. Third, establishing a macro-prudential administration and micro market regulation system for cross-border capital flows, and cracking down on foreign exchange irregularities to maintain China's financial stability and economic security. Fourth, refining the RMB exchange rate formation mechanism to drive the in-depth development of the foreign exchange market. Efforts shall be made to preserve and grow the value of foreign exchange reserves while ensuring the security and liquidity of foreign exchange reserves. 2017-10-19/en/2017/1019/1377.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange sales and settlements and banks' foreign-related payments and receipts for customers for November 2017, and its press spokesperson answered media questions on recent cross-border capital flows. Q: Could you brief us on China's cross-border capital flows for November? A: China's foreign exchange market continued to see equilibrium between supply and demand in November. According to the foreign exchange reserves data released on December 7, the balance of foreign exchange reserves as at the end of November amounted to USD 3.1193 trillion, up by USD 10.1 billion month on month, recovering for 10 consecutive months, primarily due to the basic equilibrium between domestic demand and supply of foreign exchange. As for the composition of the demand and supply of foreign exchange, a deficit of USD 7.5 billion was recorded in foreign exchange sales and settlements in November. On the other hand, to mitigate risks and preserve value, enterprises' net sales of foreign exchange in RMB-foreign exchange derivatives markets including forwards and options rose in the month, leading to a decrease of USD 4.1 billion in foreign exchange position of banks for the month, hence increasing the supply of foreign exchange. With other factors taken into consideration, the supply and demand of foreign exchange in China found a basic equilibrium in the month. In addition, foreign-related receipts and payments of non-banking sectors such as companies and individuals registered a deficit of USD 12.9 billion for the month, of which, the receipts and payments of foreign exchange were relatively balanced with a small deficit of USD 1.4 billion. Cross-border capital flows through major channels were stable and reasonable. First, the willingness of market participants to settle foreign exchange was strengthened while their desire to purchase foreign exchange was weakened. In November, the ratio of foreign exchange settlement by bank customers to foreign-related foreign exchange receipts reached 61.0%, up by 5.4 percentage points year on year; the ratio of foreign exchange purchases by bank customers to foreign-related foreign exchange payments was 62.7%, down by 9.5 percentage points year on year. Second, foreign exchange sales and settlement under trade in goods remained in surplus and capital inflows and foreign exchange settlement under FDI climbed. In November, foreign exchange sales and settlements under trade in goods of banks for customers recorded a surplus of USD 15.7 billion, up by 29% year on year; foreign exchange capital settlement under FDI almost doubled on a year-on-year basis. Third, foreign exchange purchased by individuals continued to fall stably. In November, foreign exchange purchased by individuals plummeted by 44% year on year and was 15% lower than the monthly average of January-October 2017, indicating a low level in recent years. China's economy continued to perform stably with good momentum for growth, providing a fundamental guarantee for stable cross-border capital flows. In November, foreign demand continued to be strengthened and domestic demand remained robust, driving USD-denominated exports to rise by 12% year on year, a sub-high since the beginning of this year; and China's imports grew by 18%; official PMI was 51.8, up by 0.2 percentage point month on month, falling within the expansion range for 16 straight months. Following the general work guideline of making progress while maintaining stability and the new concept for development, China will focus on the supply-side structural reform going forward, pressing ahead with the efforts of stabilizing growth, promoting reform, adjusting structure, benefiting the public and guarding against risks, with the aim of boosting the sustainable and healthy development of the economy and society and laying a solid foundation for the basic equilibrium of China's balance of payments in the medium and long term. 2017-12-18/en/2017/1218/1387.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange sales and settlement and banks' foreign-related receipts and payments for customers for October 2017, and its press spokesperson answered media questions on recent cross-border capital flows. Q: China's cross-border capital flows remained balanced in the first three quarters of this year. Could you brief us on the situation in October? A: China's cross-border capital flows continued to be in balance in October. First, banks' foreign exchange sales and settlement remained in surplus. In October 2017, a surplus of USD 2.8 billion was registered in banks' foreign exchange sales and settlement, compared with a surplus of USD 300 million in September, indicating the domestic demand and supply of foreign exchange has sustained an equilibrium. Second, the non-banking sectors posted a further balance in foreign-related receipts and payments. In October, the non-banking sectors including enterprises and individuals recorded a surplus of USD 100 million in foreign-related receipts and payments, compared with a deficit of USD 1.7 billion in September. Third, the balance of China's foreign exchange reserves continued to recover. As at the end of October, China posted USD 3.1092 trillion in the balance of foreign exchange reserves, an increase of USD 98.7 billion from the end of 2016, and USD 700 million from the end of last month, marking the 9th consecutive month of growth. Currently market participants' foreign-related receipts and payments are more stabilized and orderly, providing a boost to the adaptive equilibrium between the demand and supply of foreign exchange. First, market participants are more sensible in selling and settling foreign exchange. In October, the desire to settle foreign exchange remained stable, with bank customers' foreign exchange settlement as a percentage of their income from foreign-related foreign exchange being 62.9%, slightly increasing by 0.1 percentage point from the first three quarters. Bank customers' desire to purchase foreign exchange declined further, with the ratio of foreign exchange purchases by bank customers to foreign-related foreign exchange payments reaching 61.6%, down by 4.5 percentage points from the first three quarters. Second, foreign exchange inflows through major channels such as trade in goods, use of foreign funds and cross-border financing continued to grow. In October, the surplus in banks' foreign exchange sales and settlement under trade in goods for customers rose by 42% year on year, foreign exchange settlement under FDI recorded both year-on-year and month-on-month increases, and cross-border financing continued stable recovery. Third, individuals' purchases of foreign exchange were more stable. In October, individuals' purchases of foreign exchange fell from the seasonal peak of the third quarter and also were much lower than the same period of the previous year. China's economy has recently sustained a stronger and more stable momentum for growth, fundamentally supporting more stable and balanced cross-border capital flows in China. The 19th CPC National Congress made a comprehensive plan for the realization of the two centenary goals, and proposed to build a modern economic system, continue to transform the way of development, optimize the economic structure and change the dynamics of growth, so as to boost the sustainable and healthy development of the economy, which will be the foundation to promote the equilibrium of China's balance of payments and ensure stable flows of cross-border capital in the medium and long term. 2017-11-16/en/2017/1116/1381.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the external debt data as at the end of September 2017 and its official answered press questions regarding the recent external debt status in China. Q: Could you brief us on the external debt status in China for the first three quarters of 2017? A: China's external debt grew stably in the first three quarters of 2017. As at the end of September 2017, China's full-scale outstanding external debt (denominated in the RMB or other currencies) amounted to USD 1.68 trillion, an increase of USD 117.2 billion or 7.5% from the end of June. Increased debt securities, trade credit and prepayment were the major sources of growth. In particular, the growth of debt securities accounted for 45% of the overall growth of external debt, indicating that alongside the liberalization of the inter-bank bond market, foreign institutions have become more involved in the domestic bond market. The increase in trade credit and prepayment was about 20% of the overall increase in external debt, which is closely related to the ongoing recovery of China's foreign trade. Q: How to look at China's current external debt status? A: China's economy has shown a strong momentum for growth while maintaining stability, providing a solid foundation for the steady growth of external debt. China's economy sustained stable growth in the first three quarters, with GDP hitting RMB 59.3 trillion, up by 6.9% year on year. Its imports and exports rose fast, with total import and export value reaching RMB 20.3 trillion in the first three quarters, up by 16.6% year on year. The two-way fluctuations of the RMB exchange rates displayed much stronger flexibility, the expectations of foreign exchange rates stayed stable, and the demand for cross-border financing from the real economy was strengthened. Policy dividends have been yielded to provide important conditions for the stable growth of China's external debt. With the implementation of measures for trade investment and financing facilitation such as the macro-prudential management policy for full-scale cross-border financing and free trade zones, a growing number of enterprises have benefitted from policy dividends, expanding their financing channels while reducing their financing costs. The inter-bank bond market has been increasingly liberalized. In particular, the launch of Bond Connect between the mainland and Hong Kong in July has further diversified the channels for overseas investors to participate in China's financial market, increasingly motivating overseas institutions to hold more of domestic bonds. Going forward, China will improve the macro-prudential management of cross-border financing by enhancing the control framework with two pillars of monetary policy and macro-prudential policy, and keep a close watch on the changes in external debt and better integrate serving the real economy and guarding against systematic risks, in a bid to boost the sustainable and healthy development of China's economy. 2017-12-28/en/2017/1228/1389.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the preliminary data in the Balance of Payments for the third quarter and the first three quarters of 2017, and its spokesperson answered media questions on relevant issues. Q: Could you brief us on China's balance of payments for the first three quarters of 2017? A: According to the preliminary data in the Balance of Payments for the first three quarters of this year, a twin surplus was registered under the current account and the financial account (excluding reserve assets, but including net errors and omissions for the first three quarters, the same below), and reserve assets rose. First, the current account retained a reasonable surplus and foreign trade increased on a year on year basis. In the first three quarters, a surplus of USD 106.3 billion was recorded under the current account, and its ratio to GDP for the same period was 1.2%. Another surplus of USD 335.4 billion was recorded under trade in goods in the Balance of Payments, with import and export of goods rising by 10% and 17% year on year respectively, which indicates that foreign trade has recovered and maintains a good momentum for growth driven by the continued strengthening of domestic and foreign demand. Second, the financial account (excluding reserve assets) registered a surplus. In the first three quarters, the financial account (excluding reserve assets) recorded a surplus of USD 60.8 billion, compared with a deficit of USD 389.1 billion in the comparable coverage for the same period last year. In particular, direct investment recorded a net inflow of USD 21.3 billion, versus a net outflow of USD 79.8 billion for the same period last year. To be specific, ODI recorded a net outflow of USD 64.8 billion, and FDI, a net inflow of USD 86.1 billion, which are relatively high in both directions. Third, reserve assets rose. In the first three quarters, China's reserve assets rose by USD 58.9 billion as a result of the BOP transactions (excluding the impact of non-transaction factors such as exchange rate and price), compared with a drop of USD 294.1 billion for the same period last year. To be specific, foreign exchange reserves increased by USD 59.8 billion and the reserve position in the IMF fell by USD 900 million. Overall, China's balance of payments remained robust and its cross-border capital flows stayed stable with a good momentum for growth in the first three quarters, suggesting a more solid foundation for the basic equilibrium in the Balance of Payments in the future. 2017-11-06/en/2017/1106/1378.html
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Q: The foreign exchange reserves data recently disseminated by the People's Bank of China show that China's foreign exchange reserves for November 2017 rose by USD 10.1 billion month-on-month. Could you explain such a rise in foreign exchange reserves? What will be the future trends in foreign exchange reserves? A: As at the end of November 2017, China posted USD 3.1193 trillion in foreign exchange reserves, up by USD 10.1 billion or 0.3% month-on-month, marking the tenth consecutive month of increases. In November, China's cross-border capital flows and trading behaviors of domestic and foreign market participants remained stable and balanced; the global financial markets went through slight fluctuations, the foreign exchange rates of major non-USD currencies rose and the asset prices changed, thus leading to the rise in China's foreign exchange reserves. Since the beginning of this year, China's economy has developed steadily with a remarkable momentum for growth, restructuring has gone deeper, the shift between new and old dynamics has sped up, and the quality and benefits have kept increasing, providing a strong boost to more stable and balanced cross-border capital flows. The robust balance of payments has provided a solid guarantee for the continuous and stable recovery of foreign exchange reserves. Looking ahead, the success of the 19th CPC National Congress has strengthened the confidence of domestic and foreign market participants in China's economic development, indicating stronger foundation and conditions for China to sustain stable economic development with a strong momentum for growth. Along with the deepening of the interest rate and foreign exchange rate market reforms, market expectations will be improved, suggesting the foundation for the equilibrium of the balance of payments and stable cross-border capital flows will be solidified, which will be favorable for the overall stability of foreign exchange reserves. 2017-12-07/en/2017/1207/1385.html
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Q：The latest data disseminated by the People's Bank of China on foreign exchange reserves show that China's foreign exchange reserves as at the end of October 2017 grew by a slight USD 700 million from the end of September. Could you brief us on the causes behind such a change? What will be the future trends on foreign exchange reserves? A: As at the end of October, China's foreign exchange reserves hit USD 3.1092 trillion, USD 700 million more than that of September. In October, China's cross-border capital flows and the trading behaviors of domestic and overseas market participants were further balanced, indicating a basic equilibrium in the supply and demand of foreign exchange. In global financial markets, non-USD currencies depreciated against the USD, and asset prices rose. Under the combined impact of various factors, China's foreign exchange reserves stayed stable. China's economic performance has remained steady since the beginning of this year. With structure optimized, new dynamics' growth picking up, and quality and benefits remarkably enhanced, the economy has continued its stable growth while maintaining a good momentum, thereby boosting the balance of China's cross-border capital flows. The balance of payments has found a basic equilibrium. The foreign exchange reserves have reached a stable level after recovery. Looking ahead, along with the success of the 19th CPC National Congress, the market confidence in China' long-term economic and social development, domestic or overseas, will be strengthened further, and the foundation for the equilibrium and good order of cross-border capital flows and the balance of payments will be solidified, which will be favorable for foreign exchange reserves to stay stable. 2017-11-07/en/2017/1107/1380.html
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In the third quarter of 2017, China's current account registered a surplus of RMB 247.2 billion, and the capital and financial accounts (including net errors and omissions for the third quarter, the same below) recorded a deficit of RMB 247.2 billion. To be specific, the financial account (excluding reserve assets, but including net errors and omissions for the third quarter, the same below) recorded a deficit of RMB 47.8 billion, and reserve assets rose by RMB 199.5 billion. In the first three quarters, China's current account registered a surplus of RMB 722.6 billion, and the capital and financial accounts recorded a surplus of RMB 20.4 billion. To be specific, the financial account (excluding reserve assets) recorded a surplus of RMB 419.1 billion, and reserve assets rose by RMB 398 billion. In the US dollar terms, in the third quarter, China's current account recorded a surplus of USD 37.1 billion, including a surplus of USD 121 billion under trade in goods, a deficit of USD 68.1 billion under trade in services, a deficit of USD 13.3 billion under primary income and a deficit of USD 2.5 billion under secondary income. The capital and financial accounts registered a deficit of USD 37.1 billion, including a surplus of USD 10 million under the capital account, and a deficit of USD 7.2 billion under the financial account (excluding reserve assets) and an increase of USD 29.9 billion under reserve assets. In the US dollar terms, in the first three quarters, the current account registered a surplus of USD 106.3 billion, including a surplus of USD 335.4 billion under trade in goods, a deficit of USD 203.2 billion under trade in services, a deficit of USD 16.7 billion under primary income, and a deficit of USD 9.2 billion under secondary income. The capital and financial accounts recorded a surplus of USD 1.8 billion, including a deficit of USD 100 million under the capital account, a surplus of USD 60.8 billion under the financial account (excluding reserve assets) and an increase of USD 58.9 billion under reserve assets. In SDR terms, in the third quarter, China posted a surplus of SDR 26.3 billion under the current account, and a deficit of SDR 26.3 billion under the capital and financial accounts. To be specific, the financial account (excluding reserve assets) registered a deficit of SDR 5.1 billion, and reserves assets increased by SDR 21.2 billion. In SDR terms, in the first three quarters, China posted a surplus of SDR 76.6 billion under the current account, and a surplus of SDR 2.4 billion under the capital and financial accounts. To be specific, the financial account (excluding reserve assets) registered a surplus of SDR 44.6 billion, and reserves assets rose by SDR 42.1 billion. 2017-11-06/en/2017/1106/1379.html
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The State Administration of Foreign Exchange (SAFE) has recently published the Guidelines on External Financial Assets and Liabilities and Foreign Transaction Statistics (2017 Version) (Huizongfa No. 106 [2017]). The guidelines, a supplement to the Statistics System of External Financial Assets and Liabilities and Foreign Transactions (Huifa No. 15 [2016]), are a summary of the answers to business problems encountered in the early period and the experience in verification, with the aim of further standardizing the declaration of external financial assets and liabilities and foreign transaction statistics, guiding the declarers to accurately understand the declaration requirements and enhance the data quality in statistics declaration. 2017-11-30/en/2017/1130/1382.html