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According to statistical data released by the State Administration of Foreign Exchange (SAFE), in July 2012 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD127.5 billion and USD127 billion respectively. The surplus of foreign exchange settlement and sales amounted to USD500 million. During the same period, the total amount involved in contracts for forward settlement of foreign exchange with banks on behalf of clients was USD11.8 billion; the total amount involved in contracts for forward sale of foreign exchange was USD15.2 billion; and net forward exchange sales totaled USD3.4 billion. During the first seven months of 2012, the cumulative amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD872.5 billion and USD842.6 billion respectively. The surplus of foreign exchange settlement and sales was USD30 billion. During the same period, the cumulative amount in contracts for forward settlement of foreign exchange with banks on behalf of clients was USD95.7 billion, the cumulative amount in contracts for forward sale of foreign exchange was USD104.5 billion, and the cumulative net forward sale of foreign exchange with banks on behalf of clients totaled USD8.8 billion. In July 2012 foreign-related receipts and payments of domestic banks on behalf of clients amounted to USD218.4 billion and USD209.6 billion respectively; and the surplus of foreign-related receipts and payments totaled USD8.8 billion. In the first seven months of 2012, the cumulative foreign-related receipts and payments of banks on behalf of clients amounted to USD1443.7 billion and USD1355.8 billion respectively; and the cumulative surplus of foreign-related receipts and payments reached USD88 billion. Addendum: Glossary and relevant definitions The Balance of Payments refers to all economic transactions occurring between residents and non-residents in China , including all financial transactions and barter arrangements resulting in changes in the assets and liabilities of residents and non-residents. Foreign exchange settlement and sales by banks refer to settlement and sales carried out by designated foreign exchange banks either for their clients or for themselves, excluding data on transactions on the inter-bank foreign exchange market. Foreign exchange settlement and sales by banks on behalf of clients (including foreign exchange settlement and sales by the banks themselves) refer to settlement and sales by designated foreign exchange banks for clients. The time of conversion between RMB and the foreign currency is regarded as the time-point for the statistics on the foreign exchange settlement and sales by the banks. Specifically, foreign exchange settlement refers to the sale of foreign exchange to designated foreign exchange banks by owners of foreign exchange; foreign exchange sales refer to the sale of foreign exchange by designated foreign exchange banks to the users of foreign exchange. The difference between the foreign exchange settlement and sales is regarded as an offset balance. This difference, which is offset by the banks through transactions on the inter-bank foreign exchange market, is a major factor resulting in changes in the country’s foreign exchange reserves. But it is not equivalent to the net change in foreign exchange reserves during the same period. The principle for transactions between residents and non-residents does not apply to the preparation of statistics on foreign exchange settlement and sales by banks on behalf of clients; such statistics only cover RMB and foreign currency transactions between banks and clients, namely, RMB and foreign currency exchange transactions that fall outside the category of the balance-of-payments statistics. Contracts for forward settlement and sales of foreign exchange refer to contracts for forward settlement (sale) of foreign exchange executed between banks and their clients through consultation, during which the foreign currency, amount, exchange rate, and term for the forward settlement (sale) of foreign exchange are agreed upon; where the foreign exchange is to be received (paid), and the foreign exchange settlement (sale) is to be handled on the basis of the amount of foreign currency and the exchange rate specified in such contracts. The forward foreign exchange settlement and sales business enables enterprises to lock into an exchange rate in advance for future foreign exchange settlement or sales and effectively to avoid the risks of changes in the RMB exchange rate. In general, banks will hedge the risk exposure arising from the forward foreign exchange settlement and sales business through the inter-bank foreign exchange market. For example, where the total amount involved in the contracts for forward settlement of foreign exchange executed by banks is more than that in the contracts for forward sales of foreign exchange, the banks generally will sell an equivalent amount of foreign exchange in advance on the inter-bank foreign exchange market, and vice versa. Therefore, the forward settlement and sales of foreign exchange business is also a factor that affects changes in China ’s foreign exchange reserves. Foreign-related receipts and payments by banks on behalf of clients refer to receipts and payments occurring between domestic non-bank resident institutions/individuals (collectively called the non-bank sector) 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. In particular, they include cross-border receipts and payments between non-bank sectors and non-residents through domestic banks (including RMB and foreign exchange), and domestic receipts and payments between non-bank sectors and non-residents through domestic banks (temporarily excluding receipts and payments in RMB between individual domestic residents and individual domestic non-residents). The statistics are collected at the time when the clients carry out the foreign-related receipts and payments at the domestic banks. Specifically, the foreign-related receipts of banks on behalf of clients refer to funds collected by non-bank sectors from non-residents via domestic banks; external payments by banks on behalf of clients refer to funds paid by non-bank sectors to non-residents via domestic banks. Although the foreign-related receipts and payments by banks on behalf of clients are an integral part of the balance-of-payments statistics, the accounting method for the statistics, different from the accrual accounting basis required for the balance-of- payments statistics, is based on a cash basis. In addition, it merely reflects capital flows between the non-bank sectors and non-residents and does not include barter transactions or foreign transactions conducted by the banks themselves. Furthermore, the scope of the statistics on the foreign-related receipts and payments of banks on behalf of clients is smaller than the scope of the balance-of-payments statistics. 2012-08-24/en/2012/0824/1064.html
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As of the end of June 2012, China ’s outstanding external debt (excluding that of Hong Kong SAR, Macao SAR, and Taiwan Province ) reached USD785.172 billion. Specifically, the outstanding registered external debt reached USD495.072 billion and the balance of trade credit between enterprises totaled USD290.1 billion. With respect to the term structure, outstanding long- and medium-term external debt (with the remaining term) was USD196.95 billion and outstanding short-term external debt (with the remaining term) was USD588.222 billion. Specifically, trade credit between enterprises and bank trade financing respectively accounted for 49.32 percent and 24.57 percent of the total. The two accounted for 73.89 percent of the outstanding short-term external debt (with the remaining term). In terms of the type of debtor, the outstanding debt of Chinese-funded financial institutions was USD253.215 billion, accounting for 51.15 percent of the outstanding registered external debt; the outstanding debt of foreign-funded enterprises was USD141.54 billion, accounting for 28.59 percent; and the outstanding debt of foreign-funded financial institutions was USD57.284 billion, accounting for 11.57 percent. In terms of the types of debt, the balance of international commercial loans amounted to USD428.575 billion and the balance of foreign government loans and loans granted by international financial organizations amounted to USD66.497 billion. In terms of the currency structure, USD debt accounted for 77.77 percent, Euro debt 7.51 percent, and JPY debt 6.99 percent of the outstanding registered external debt. In terms of the sectors in which the debt is invested, with reference to the Industrial Classification of the National Economy, the outstanding medium- and long-term registered external debt (based on contract terms) invested in the manufacturing sector accounted for 23.67 percent, the transportation, storage, and postal sector 13.31 percent, and the electric power, coal, gas, and water production and supply sector 6.90 percent. In the first half of 2012, China newly borrowed USD21.255 billion in medium- and long-term external debt, repaid USD14.779 billion in principal of long- and medium-term external debt, and paid USD1.198 billion in interest. The net inflows under the outstanding long- and medium-term external debt were USD5.278 billion, down 25.24 percent on a year-on-year basis. Addendum: Definition of terms and interpretations Classification of the term structure of external debt. There are two classification methods for the classification of external debt in terms of the term structure. First, classification on the basis of the contract term, i.e., it is classified as medium- and long-term external debt in cases where the contract term is more than one year, and it is classified as short-term external debt in cases where the contract term is one year or less; second, classification on the basis of the remaining term, i.e., on the basis of the above classification method, medium- and long-term external debt due within one year will be classified as short-term external debt. In order to differentiate between the two classification methods, in this news release any indication of the classification method, i.e., the contract term or remaining term, follows the definitions of the medium- and long-term external debt and the short-term external debt. Trade credit between enterprises refers to the external liability arising from directly extending credit between the seller and buyer of goods, specifically transactions between residents in Mainland China and foreign non-residents (including non-residents in Hong Kong SAR, Macao SAR, and Taiwan Province), i.e., the debt incurred due to the difference between the time of payment and that of the transfer of ownership of the goods. Trade credit between enterprises includes credit directly provided by the supplier (e.g., the overseas exporter) for commodity transactions and services, and advance payments made by buyers (e.g., overseas importers) for goods, services, and on-going business (or business to be undertaken). Bank trade financing refers to loans related to trade extended by a third party (e.g., banks) to exporters or importers, for instance, loans extended by foreign financial institutions or export credit agencies to buyers. Trade-related credit is a broad concept. In addition to trade credit between enterprises, it also includes other kinds of credit provided for trade activities. According to the definition, trade-related credit includes trade credit between enterprises, bank trade financing, short-term notes related to trade, and so forth. 2012-09-14/en/2012/0914/1068.html
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The SAFE recently released the preliminary data on China 's Balance of Payments Statement for Q2 and H1 of 2012. In Q2 of 2012, the surplus under the current account totaled USD59.7 billion. Specifically, the surpluses in goods and current transfers reached USD91.3 billion and USD1 billion respectively, whereas the deficits in trade in services and income amounted to USD18.7 billion and USD13.9 billion respectively. Meanwhile, China ’s deficit under the capital and financial account (including net errors and omissions) totaled USD71.4 billion. In particular, net inflows of direct investments amounted to USD38.6 billion. International reserve assets (exclusive of the influence of non-transaction changes in value such as exchange rates and prices) registered a drop of USD11.8 billion. Specifically, transactions in foreign exchange reserve assets registered a drop of USD11.2 billion, the reserve position in the IMF registered a drop of USD400 million, and special drawing rights registered a drop of USD100 million. In H1 of 2012, the surplus under the current account was USD83.2 billion and the deficit under the capital and financial account (including net errors and omissions) was USD20.3 billion whereas international reserves registered a rise of USD62.9 billion. Balance of Payments1 (Preliminary Data) Unit: USD100 million Item 2 # Q2 of 2012 H1 of 20123 I. Current Account 1 597 832 A. Goods and Services 2 726 764 a. Goods 3 913 1132 Credit 4 5262 9574 Debit 5 4349 8443 b. Services 6 -187 -368 Credit 7 470 906 Debit 8 657 1274 1. Transportation 9 -114 -229 Credit 10 100 184 Debit 11 214 414 2. Travel 12 -89 -185 Credit 13 127 240 Debit 14 215 425 3. Communication Services 15 1 3 Credit 16 4 9 Debit 17 3 6 4. Construction Services 18 19 46 Credit 19 26 61 Debit 20 8 15 5. Insurance Services 21 -42 -84 Credit 22 9 17 Debit 23 51 100 6. Financial Services 24 -1 -1 Credit 25 2 5 Debit 26 3 6 7. Computer and Information Services 27 26 53 Credit 28 35 69 Debit 29 9 16 8. Royalties and Licensing Fees 30 -45 -85 Credit 31 2 4 Debit 32 47 89 9. Consulting Services 33 31 66 Credit 34 79 157 Debit 35 48 91 10. Advertising and Public Opinion Polling 36 3 9 Credit 37 11 23 Debit 38 8 14 11. Audio-visual and Related Services 39 -1 -2 Credit 40 0 1 Debit 41 1 2 12. Other Business Services 42 25 42 Credit 43 72 134 Debit 44 48 92 13. Government Services, n.i.e. 45 0 -1 Credit 46 2 4 Debit 47 2 5 B. Income 48 -139 33 C. Current Transfers 49 10 35 II. Capital and Financial Account 4 50 -714 -203 Of which, Direct Investments 51 386 875 III. Reserves Assets 52 118 -629 3.1 Monetary Gold 53 0 0 3.2 Special Drawing Rights 54 1 -1 3.3 Reserves Position in the Fund 55 4 8 3.4 Foreign Exchange 56 112 -636 3.5 Other Claims 57 0 0 Note: 1. This statement employs rounded-off numbers. 2. “Other items” refer to the differences, except for those marked as "Credit" or "Debit." 3. The preliminary data in this statement for H1 of 2012 are the sum total of the formal data for Q1 of 2012 and the preliminary data for Q2 of 2012. 4. The data under the capital and financial account in this statement are the balance between the current account balance and the amount of change in reserve assets, including net errors and omissions. 2012-07-31/en/2012/0731/1062.html
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The SAFE recently released the official data on China’s Balance of Payments Statement for Q2 and H1 of 2012. In Q2 of 2012, the surplus under China’s current account totaled USD53.7 billion. Specifically, according to the statistical coverage of the balance of payments, the surplus in goods and current transfers reached USD90.9 billion and USD600 million respectively, whereas the deficit in trade in services and income amounted to USD22.2 billion and USD15.6 billion respectively. Meanwhile, the deficit under the capital and financial account totaled USD41.2 billion. In particular, net inflows of direct investments, portfolio investments, and net outflows of other investments amounted to USD41.1 billion, USD11.1 billion, and USD94.4 billion respectively. International reserve assets (exclusive of the influence of non-transaction changes in value, such as exchange rates and prices) registered a drop of USD11.8 billion. Specifically, transactions in foreign exchange reserve assets registered a drop of USD11.2 billion, and special drawing rights and the reserve position in the IMF experienced a drop of USD500 million. In the first half of 2012, China’s surplus under the current account totaled USD77.2 billion. The ratio of the surplus under the current account to GDP during the same period was 2.1 percent. Meanwhile, China’s surplus under the capital and financial account totaled USD14.9 billion. China’s international reserve assets posted an increase of USD62.9 billion. In addition, in order to facilitate understanding of the data and analysis of China’s balance of payments among all social groups, the BOP Analysis Team of the SAFE released China’s Balance of Payments Report for the First Half of 2012. 2012-08-31/en/2012/0831/1065.html
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In order to further increase the transparency of foreign exchange administration policies and to support the real economy, the State Administration of Foreign Exchange has updated the Catalogue of Existing Effective Laws and Regulations on Foreign Exchange Administration (as of the end of June 2011) and has formulated the Catalogue of Existing Effective Laws and Regulations on Foreign Exchange Administration (as of the end of July 2012) (the “Catalogue”) on the basis of the recent putting in order of the regulations. The Catalogue includes a total of 400 policies and regulations on foreign exchange administration, retaining the eight major items, including general foreign exchange business, foreign exchange business under the current account, foreign exchange business under the capital account, regulations on the foreign exchange business of financial institutions, the RMB exchange rate and the foreign exchange market, as well as the balance of payments statistics and foreign exchange business statistics, foreign exchange inspections and application of the laws and regulations, and scientific administration of foreign exchange, which, in order to facilitate public inquiries, are further divided into some sub-items based on the specific types of business. Furthermore, in order to better serve the public and to improve the transparency of foreign exchange administration, the State Administration of Foreign Exchange simultaneously put online some of the policies and regulations that had been issued in previous years. The State Administration of Foreign Exchange will continue the putting in order of the regulations and will regularly update the Catalogue so as to increase knowledge and use by banks, enterprises, and individuals in an effort to promote the facilitation of trade and investment. 2012-09-05/en/2012/0905/1067.html
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Recently, in order to improve the transparency of the balance of payments statistical data, the SAFE prepared and published China’s Quarterly Balance of Payments Statements from 1998 to 2009 (see Annex I) prepared on the basis of the historical data, and simultaneously published the Annual Balance of Payments Statements from 1998 to 2009 (see Annex II) prepared on the basis of the quarterly accumulated data on a yearly basis. The data in the Quarterly Balance of Payments Statements published at this time strictly follow the requirements of the International Monetary Fund’s Balance of Payments Manual, Fifth Edition, and the data on such items as reserve assets, relevant profits from foreign direct investment in China, and foreign aid from government departments have been adjusted, further extending the length of the Balance of Payments Quarterly Time Series Data. Thus, China ’s Balance of Payments Statements include annual time series data from 1982 and quarterly time series data from 1998. For the complete time series data, see the column “Statistical Data.” 2012-07-30/en/2012/0730/1061.html
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In 2014, the State Administration of Foreign Exchange (SAFE) received and processed in 2014 52 proposals and motions in total from the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC), which mainly involved operations and administration of foreign exchange reserves, trade and investment facilitation, support of companies going global, overseas investments by individuals, and foreign exchange administration policies for special economic regions. The SAFE attached great importance to the processing efforts, arranged relevant work, and made great efforts to carry out the related tasks. As a result, the processing of the relevant proposals and motions for 2014 was completed successfully, which can be attributable to the following aspects: first, close attention from the leadership and thoughtful arrangements. With the significance of the proposals and motions processing stressed by the SAFE's Party Leadership Group, the leaders in charge of this processing effort convened a special meeting to make arrangements and raise requirements for the processing. Second, improved systems and standardized processing. A special measure has been developed to make sure the processing is institutionalized and standardized. Third, good coordination and communication to enhance the processing level. The SAFE took various measures to communicate with the delegates and further listened to their opinions and suggestions to ensure the quality of the processing. Fourth, strengthened training and rigorous overseeing. Intensive training was provided for the persons processing the proposals and motions and supervision was improved to make sure every proposal and motion was replied. After the completion of the processing, a wrap-up meeting was held to identify and summarize the experience gained and good practices in this processing effort. The year 2015 is a critical year in deepening the reforms in China in an all-round way, the first year in fully promoting the rule of law in China as well as the last year of the Twelfth Five-Year Plan period. The SAFE should take the processing effort of 2015 as a touchstone for the implementation of the gist of the 18th CPC National Congress, the Third and Fourth Plenums of the 18th CPC Central Committee and the Central Economic Work Conference and continue to improve its work styles, so as to do well in the processing of the proposals and motions from the NPC and CPPCC in 2015. 2015-03-11/en/2015/0311/1149.html
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In order to facilitate settlement and sales of foreign exchange by banks and based on the Administrative Measures for Foreign Exchange Settlement and Sales by Banks (People’s Bank of China DecreeNo. 2 [2014], hereafter referred to as the “Measures”), the State Administration of Foreign Exchange recently issued a Circular on Printing and Distributing the Detailed Rules for the Implementation of the Administrative Measures for Foreign Exchange Settlement and Sales by Banks (Huifa No. 53 [2014], hereafter referred to as the “Rules”). In order to carry out the reform agenda regardingstreamlining administration and delegating power to lower levels, these Rules integrate the regulations on market entry for foreign exchange settlement and sales by banks, administration of spot foreign exchange settlement and sales, management of RMB and foreign exchange derivatives and the comprehensive position of foreign exchange settlement and sales by banks, and make adjustments to some of their content. The highlights are as follows: First, management of market entry for foreign exchange settlement and sales and RMB/foreign exchange derivatives transactions will be integrated, and the filing procedures for foreign exchange settlement and sales by banks will be simplified. Second, the requirement of unified service marksfor RMB and foreign currency conversions for individuals is abolished and substituted by the provision that banks conducting foreign exchange settlement and sales to individuals shall put the service mark in a conspicuous position. Third, daily examinations of the comprehensive position of foreign exchange settlement and sales will be substituted by a weekly examination, while the policy that links the comprehensive position of foreign exchange settlement and sales with the foreign exchange loan-to deposit ratio is abolished. Fourth, the approval authority forRMB and foreign currency conversion of the equity capital (working capital) of banks will be delegated to lower levelsandthe approvals for the foreign exchange settlement and sales by banks on behalf of their debtors will be cancelled. Last, the principles of “understanding your transactions, knowing your customers, and performing due diligence” are specified for foreign exchange settlement and sales. The Rules will come into effectas of January 1, 2015. 2015-01-20/en/2015/0120/1144.html
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In order to promote the construction of a credit system in the field of foreign exchange, strengthen penalties for dishonesty, and urge foreign exchange market players to operate in compliance with the laws, the Department of Management and Inspection of the State Administration of Foreign Exchange (SAFE) and the Credit Information Center of the People’s Bank of China signed a Memorandum of Cooperation regarding the collection of information on foreign exchange violations to be included in the basic database on financial credit information (the “Memorandum of Cooperation”). According to the Memorandum of Cooperation, starting from January 1, 2015, information on foreign exchange violations by enterprises and public institutions which have been involved in substantial violations and have received administrative penalties for evasion of foreign exchange controls, illegal purchases of foreign exchange, inward remittances in violation of the regulations, illegal settlements of foreign exchange, arbitrary changes in the use of foreign exchange funds or foreign exchange settlement funds, and illegal trading of foreign exchange will be included in the basic database on financial credit information of the People’s Republic of China (the “Credit Information System”). The relevant information on the foreign exchange violations will be added to the Credit Information System on a quarterly basis and will remain displayed in the system for five years. The goal of the inclusion of information on foreign exchange violations in the Credit Information System is to implement the relevant requirements of the Outline for the Planning of the Construction of a Social Credit System (2014–2020) (Guofa No. 21 [2014]), to promote the exchange and sharing of credit information of the financial regulatory authorities, to expand the application of foreign exchange credit information, to strengthen the imposition of penalties for dishonesty in the field of foreign exchange, and to promote operations by foreign exchange market players that are in full compliance with the laws. All foreign exchange market players shall seize this opportunity to further enhance their awareness of operations in compliance with the laws, strengthen internal controls, enhance their level of management, and standardize operational behavior in terms of their foreign exchange business. 2014-12-17/en/2014/1217/1141.html
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FILE: No. 3 of the Publicity Material Series on the Balance of Payments and International Investment Position Manual (Sixth Edition)—Relevant Requirements of the IMF and China’s Preparatory Work and Implementation Plan 2014-12-04/en/2014/1204/1138.html