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Q: The latest data released by the People's Bank of China on foreign exchange reserves show that China's foreign exchange reserves as at the end of July 2018 rose by USD 5.8 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of July 2018, China's foreign exchange reserves stood at USD 3,117.9 billion, up by USD 5.8 billion or 0.19% month on month. In July, China's cross-border capital flow was generally stable and the foreign exchange market maintained a basic equilibrium in supply and demand. Under the combined impact of the basically unchanged US dollar index, the slightly fluctuated price of financial assets, the exchange rate translation of major non-USD currencies and the asset price changes in global financial markets, China’s foreign exchange reserves steadily increased. Since the beginning of this year, the global financial markets have become increasingly volatile, witnessing the rising of both the exchange rate and interest rate of US dollar. Some emerging economies have been hit hard, global trade frictions have intensified, and the complexity and uncertainty of the external environment have both increased remarkably. Against this backdrop, China's economy remained stable and gained momentum for growth. Preliminary results have been achieved in guarding against and mitigating financial risks, with the economic structure continuously optimized, the foreign exchange market operating stable in general, and the flexibility of RMB exchange rate remarkably strengthened. Looking ahead, the international economic and financial environments will be complex and tough, global trade protectionism will continue aggravating, the macroeconomic policies of major countries will be diverging and the international financial market fluctuations will increase. However, China's economic and policy fundamentals are expected to still remain robust and cross-border capital flow and foreign exchange market operation will be able to maintain overall stability. Under such factors at home and abroad, China's foreign exchange reserves are expected to remain stable in fluctuation. 2018-08-07/en/2018/0807/1471.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 at the end of September 2018 dropped by USD 22.7 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of September 2018, China's foreign exchange reserves recorded USD 3.087 trillion, down by USD 22.7 billion or 0.7% month on month. In September, China's foreign exchange market performed stably and the foreign-related transactions of market participants are rational and orderly. On the global financial markets, the US Dollar Index basically remained unchanged from the end of August, because the exchange rate of major non-USD currencies witnessed both rising and falling and the prices of major national bonds fell slightly. Due to the combined impact of exchange rate translation and asset price changes, China’s foreign exchange reserves fell slightly. In the year to date, in the face of complex external environment, China adhered to the general work guidelines of making progress while maintaining stability, and deepened reform and opening up. As a result, the economy maintained overall stability and gained momentum for growth, the economic structure was constantly optimized, the two-way fluctuation resilience of RMB exchange rate was continuously strengthened, the balance of payments maintained basic equilibrium, and China’s foreign exchange reserves remained stable. Looking ahead, although the external environment still contains great uncertainty, China's economy has a strong capability of adapting to and resisting external risks, and the sound fundamentals will continue to provide a solid foundation for the smooth operation of the foreign exchange market. Under such factors at home and abroad, China's foreign exchange reserves are expected to stay stable amid fluctuations. 2018-10-07/en/2018/1007/1469.html
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Q: The latest data released by the People's Bank of China on foreign exchange reserves show that China's foreign exchange reserves as at the end of August decreased by USD 8.2 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of August 2018, China's foreign exchange reserves stood at USD 3,109.7 billion, down by USD 8.2 billion or 0.26% month on month. In August, the supply and demand of China's foreign exchange market remained stable and the cross-border capital flows maintained a basic equilibrium. Global trade frictions, geopolitical economic situations and other uncertainties continued to intensify, and the US dollar index rose in fluctuation. As a result, China's foreign exchange reserves declined slightly. Since the beginning of this year, there has been a remarkable increase in international political and economic risk factors, some emerging market economies have suffered from heavy shocks and the international financial market volatility has increased. However, China's foreign exchange reserves remained basic stability, mainly because China's economy maintained stability while ensuring progress and gained momentum for growth, the foreign exchange market operated smoothly and the flexibility of RMB exchange rate was further enhanced. Looking ahead, in spite of the complex international environment and rising uncertainties on financial markets, China's economy is expected to maintain the fundamentals of good resilience, strong adaptability and much leeway to improve. In the meanwhile, firmly adhering to the goal of reform and opening-up will be conducive to maintaining the adaptive equilibrium of the balance of payments. Under such factors at home and abroad, China's foreign exchange reserves are expected to remain stable in fluctuation. 2018-09-07/en/2018/1129/1472.html
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The State Administration of Foreign Exchange (SAFE) has recently released the preliminary data in the Balance of Payments for the second quarter and the first half of 2018. Its press spokesperson has answered media questions on relevant issues. Q: Could you brief us on the new characteristics of the balance of payments for the second quarter of 2018, relative to the first quarter? A: The preliminary data in the Balance of Payments for the second quarter show that China's BOP maintained a basic equilibrium and reserve assets rose. Below are the new characteristics: First, the current account was in surplus, with a higher surplus under trade in goods, and a stable deficit under trade in services. In the second quarter, the current account recorded a surplus of USD 5.8 billion, including a surplus of USD 104.2 billion under trade in goods, and a deficit of USD 73.7 billion under trade in services in the Balance of Payments. Transportation, travel and intellectual property fees remained in deficit. Second, the financial account excluding reserve assets continued to be in surplus, featuring net cross-border capital inflows. In the second quarter, the financial account excluding reserve assets registered a surplus of USD 18.2 billion, and cross-border capital continued with net inflows that started from the first quarter of 2017. Third, FDI stayed high. In the second quarter, China posted USD 29.9 billion in net inflows of direct investment. ODI recorded net outflows of USD 28.7 billion, and FDI registered net inflows of USD 58.6 billion, which was high. Fourth, reserve assets increased slightly. In the second quarter, China's reserve assets rose by USD 23.9 billion due to BOP transactions (excluding non-transaction factors like foreign exchange rate and price). Specifically, foreign exchange reserves went up by USD 22.9 billion. Overall, China's balance of payments maintained a basic equilibrium in the second quarter. It is noteworthy that the receipts and payments under the current account have entered an equilibrium range in recent years, with a slight surplus or deficit counted as a basic equilibrium. Going forward, the balance of the current account is expected to stay within a reasonable range, and the BOP will continue with an overall equilibrium. 2018-08-06/en/2018/0806/1449.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the preliminary data on the balance of payments for the third quarter and the first three quarters of 2018. The SAFE spokesperson Wang Chunying answered media questions on relevant issues. Q: Could you brief us on the new characteristics of the balance of payments for the third quarter of 2018, relative to the second quarter? A: The preliminary data on the balance of payments for the third quarter show surplus under the current account and deficit under the financial account (excluding reserve assets, but including net error and omission for the same quarter, the same as below). The main characteristics are as follows: Firstly, the surplus under the current account continued to pick up. In the third quarter, the surplus under the current account stood at USD 16 billion, up by 200% from the second quarter. Specifically, the surplus of trade in goods and services was USD 18.6 billion, among which, the surplus of trade in goods in the BOP was USD 100.8 billion and the deficit of trade in services USD 82.2 billion. Primary income was changed from deficit of USD 20.7 billion in the second quarter to surplus of USD 1.1 billion, which is mainly attributed to the rapid increase in income of various outbound investments in the third quarter. The secondary income posts a deficit of USD 3.7 billion, representing a slight decline. Secondly, the financial account (excluding reserve assets) showed a deficit. In the third quarter of 2018, the financial account (excluding reserve assets) registered a deficit of USD 18.8 billion. Specifically, direct investment recorded a net inflow of USD 1.3 billion, among which, ODI registered a net outflow of USD 23 billion, and FDI recorded a net inflow of USD 24.3 billion. Besides, based on incomplete statistics,portfolio investments in the third quarter showed a net inflow of nearly USD 50 billion, while other investment such as deposit and loan registered a net outflow of roughly USD 10 billion. Thirdly, reserve assets fell slightly. In the third quarter of 2018, China's reserve assets decreased by USD 3 billion due to the BOP transactions (excluding the impact of non-transaction factors such as exchange rate and price), among which, foreign exchange reserves decreased by USD 3.1 billion. Overall, China's balance of payments continued to maintain the equilibrium in the third quarter of 2018. Since China's economic operation has maintained stability while ensuring progress, the transformation and upgrade has been further promoted and quality and efficiency has been steadily improved, China's current account balance will remain within a reasonable range in the future, and the cross-border capital will maintain bi-directional flow and overall equilibrium. 2018-11-05/en/2018/1105/1470.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated China's external debt data as at the end of December 2017, and an official from the SAFE answered media questions on relevant issues regarding China's external debt. Q: Could you brief us on the overall changes in external debt for 2017? How to evaluate the external debt risks facing China now? A: China's external debt was on the rise in 2017. As at the end of December, the full-scale outstanding external debt (including domestic and foreign currencies) hit USD 1.7106 trillion, up by USD 294.8 billion year on year. In terms of quarters, external debt rose fastest in the second and third quarters, amounting to USD 124.9 billion and USD 117.2 billion respectively; the outstanding external debt climbed by USD 35.5 billion in the fourth quarter, which was very low. As for debt vehicles, the growth in external debt in China was primarily driven by the increases in currencies & deposits, and debt bonds, with their contribution to the overall expansion of external debt reaching 42% and 37% respectively. The external debt risks facing China are within control now. As at the end of 2017, the liability ratio, or the ratio of outstanding external debt to GDP was 14%; the debt ratio, or the ratio of outstanding external debt to export income from trade in goods and services was 71%; the debt servicing ratio, or the ratio of payments of principal and interest on external debt in the middle and long term and payments of interest on external debt in the short term to export income from trade in goods and services, was 7%, and the ratio of short-term external debt to foreign exchange reserves was 35%. All of the above indicators are below the internationally accepted safe levels. Q: What are the drivers of the growth in China's outstanding external debt? A: In 2017, the growth in China's outstanding external debt was primarily driven by the stable macro economic performance and the yielding of policy dividends. On the one hand, China witnessed stable economic development with strong momentum for growth and steady increase in economic development indicators. China's GDP for 2017 hit RMB 82.7 trillion, up by 6.9% year on year; imports and exports totaled RMB 27.8 trillion, up by 14.2% year on year; the two-way fluctuations of RMB exchange rate were more resilient, with RMB exchange rate expected to stay stable. All of these are the basic drivers of the growth in China's external debt. On the other hand, a wealth of reformative measures were introduced, enhancing the facilitation of cross-border financing by domestic players. In the year, the People's Bank of China (PBC) and the SAFE stepped up their efforts to improve the macro-prudential administration policy for full-scale cross-border financing, actively supporting financial institutions and enterprises to carry out cross-border financing in domestic and foreign currencies on their own and enabling domestic institutions to expand financing channels and reducing financing costs by making full use of the two markets and two types of resources. Moreover, the inter-bank bond market was more liberalized. In particular, the Bond Connect between the mainland and Hong Kong opened the domestic financial market wider to foreign investors, arousing foreign institutions' interest in holding more domestic bonds, and as a result, the domestic bonds they hold kept rising. Going forward, the PBC and SAFE will implement the requirement of improving the framework of regulation underpinned by monetary policy and macro-prudential policy, which was proposed at the 19th CPC National Congress. They will improve the macro-prudential administration policy with focus on bank and short-term capital flows, and make full use of its roles in counter-cyclical adjustment. While effectively preventing risks, they will step up efforts to serve the real economy and promote sustainable and healthy economic development. 2018-03-29/en/2018/0329/1422.html
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The State Administration of Foreign Exchange (SAFE) has recently published the Balance of Payments and the International Investment Position for the third quarter and the first three quarters of 2017, and its press spokesperson answered media questions regarding relevant issues. Q: Could you brief us on China's balance of payments for the first three quarters of 2017? A: China witnessed twin surplus under the current account and the financial account in the Balance of Payments (excluding reserve assets) and increased reserve assets for the first three quarters of 2017. A surplus was registered under the current account. In the first three quarters, a surplus of USD 109.8 billion was recorded under the current account, contributing 1.3% to China's GDP, which remained reasonable. To be specific, a surplus of USD 334.7 billion was registered in trade in goods in the Balance of Payments, with exports of USD 1.5953 trillion and imports of USD 1.2605 trillion, which increased by 10% and 17% year on year respectively, indicating stronger momentum for the recovery foreign trade. A surplus was registered under the financial account that excludes reserve assets. A surplus of USD 112.1 billion was registered under the financial account that excludes reserve assets in the first three quarters of 2017, compared with a deficit of USD 313.9 billion for the same period the previous year. On the one hand, outbound investments remained steady. China posted a net increase of USD 213 billion in external financial assets due to the balance of payments transactions in the first three quarters. Specifically, net ODI went up by USD 65.1 billion; net external securities investment rose by USD 64.1 billion; and other investments such as external deposits and loans increased by USD 85.8 billion net. On the other hand, overseas investors continued to increase investments in China. In the first three quarters, the net external liabilities grew by USD 325.1 billion. To be specific, FDI climbed by USD 87.9 billion net; securities investment in China rose by USD 82.1 billion net; and other investments such as non-resident deposits attracted and loans obtained jumped by USD 155.9 billion net. An increase was recorded in reserve assets. In the first three quarters, China's reserve assets rose by USD 58.9 billion due to the balance of payments transactions (excluding non-trading factors such as exchange rate and price), compared with a decrease of USD 294.1 billion the same period of the previous year. In particular, foreign exchange reserves went up by USD 59.8 billion and reserve position in the IMF went down by USD 900 million. As the sustained recovery of the global economy helps strengthen the external demand, China's economy is operated within a reasonable range and the financial market is further opened up, China's balance of payments is expected to continue the basic equilibrium going forward. Q: What would you say about China's International Investment Position as at the end of September 2017? A: As at the end of September, China witnessed increased external financial assets and liabilities against the end of the previous year. China posted USD 1.7064 trillion in net external assets as at the end of September, including USD 6.7928 trillion in external assets, USD 5.0864 trillion in external liabilities, which went up by 5.0% and 9.0% respectively against the end of the previous year (same below). External assets were on an upward trend. To be specific, ODI rose by USD 75.9 billion or 5.8%; securities investment grew by USD 88.7 billion or 24.3%; financial derivative instruments went up by USD 1.5 billion or 28.8%; other investments increased by USD 53.6 billion or 3.2%; and reserve assets climbed by USD 106.5 billion or 3.4%. External liabilities continued to recover. Specifically, FDI grew by USD 87.4 billion or 3.0%; securities investment rose by USD 162.1 billion or 20.0%; financial derivative instruments went down by USD 1.8 billion or 26.8%; and other investments rose by USD 172.7 billion or 17.5%. In terms of the composition of external assets, reserve assets was USD 3.2044 trillion, 47% of total assets; ODI was USD 1.3931 trillion, 21% of total assets; securities investment was USD 453.8 billion, 7% of total assets; financial derivative instruments was USD 6.7 billion, 0.1% of total assets; and other investments hit USD 1.7347 trillion, 26% of total assets. With regard to the composition of external liabilities, FDI was USD 2.9533 trillion, 58% of total liabilities, the highest among external liabilities; securities investment was USD 970.7 billion, 19% of total liabilities; financial derivative instruments was USD 4.8 billion, 0.1% of total liabilities; and other investments reached USD 1.1576 trillion, 23% of total liabilities. Overall, China sustained its No. 1 position worldwide by reserve assets. With orderly outbound investments and rising inbound investments, China's international investment position is robust. 2017-12-28/en/2017/1228/1388.html
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The State Administration of Foreign Exchange (SAFE) has recently released the data on banks' foreign exchange settlement and sales and their foreign-related receipts and payments for clients for January 2018, and its press spokesperson answered media questions on recent cross-border capital flows. Q: China's cross-border capital flows found an equilibrium in 2017. What have been the trends of cross-border capital flows since the beginning of 2018? A: China has seen a basic equilibrium between foreign exchange supply and demand since the very beginning of this year. First, the balance of foreign exchange reserves has been rising. According to the data on foreign exchange reserves released on February 7, the balance of foreign exchange reserves as at the end of January stood at USD 3.1615 trillion, up by USD 21.5 billion month on month, as a result of the equilibrium in the domestic supply and demand of foreign exchange, the foreign exchange rate appreciation of non-USD currencies and changes in asset prices. Second, banks' foreign exchange sales and settlements and domestic supply and demand of foreign exchange have remained in balance. Banks' foreign exchange settlements went up by 28% year on year and banks' foreign exchange sales grew by 11% year on year in January, leading to a deficit of USD 900 million, which was down by 95% year on year, indicating slight surplus and deficit have continued to alternate. If the impact of forward trading and options trading of enterprises were taken into consideration, the domestic supply and demand of foreign exchange would have reached a basic equilibrium in January. Third, the non-banking sectors' foreign-related receipts and payments have been in surplus. In January, the non-banking sectors such as enterprises and individuals registered a surplus of USD 24.6 billion in foreign-related receipts and payments, including a surplus of USD 25.7 billion in foreign exchange capital receipts and payments. The supply and demand of foreign exchange from major channels have stayed stable. On the one hand, foreign exchange sales and settlements under trade in goods and the capital and financial accounts have continued to register surpluses. In January, the sales and settlements of foreign exchange under trade in goods for clients recorded a surplus of USD 18.7 billion, the sales and settlements of foreign exchange under the capital and financial accounts for clients registered a surplus of USD 4.2 billion. In particular, direct investment and portfolio investment recorded a surplus of USD 900 million and USD 1.9 billion respectively. On the other hand, enterprises' returns on investment and individuals' purchases of foreign exchange have remained low. In January, foreign exchange purchases under the return on investment went down by 31% month on month and 23% year on year; and individuals' purchases of foreign exchange climbed by 11% month on month, indicating more foreign exchange was used by individuals under travel before the Chinese New Year, but it declined by 12% year on year. The development trend that two-way cross-border capital flows will remain generally balanced has taken shape in China. Recently, the steady economic growth in China has gained momentum. The market views of major currencies have been rationally diverged, with stable growth expected; the RMB exchange rate has presented a trend of ups and downs and two-way fluctuations, promoting cross-border capital flows to be more stable in China, and the foreign exchange market to achieve a balance on its own. Going forward, as the supply-side structural reform goes deeper, China's economic structure will be further optimized and its momentum for endogenous growth will be strengthened, suggesting China will witness stable and rapid economic growth. Globally the economy will continue to recover, but the global financial performance and the normalization of the monetary policies of major developed economies will continue to suffer from instability and uncertainties. Under such circumstances, the two-way fluctuations of the RMB exchange rate will become a norm and the RMB exchange rate will stay basically stable at a reasonable and balanced level, which is favorable for China's cross-border capital to flow in two ways and remain generally balanced in the medium and long term. 2018-02-26/en/2018/0226/1419.html
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The State Administration of Foreign Exchange (SAFE) has recently released the data on banks' foreign exchange settlements and sales and their foreign-related receipts and payments for clients for February 2018, 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 February 2018? A: The domestic foreign exchange market remained self-balanced in February 2018. First, foreign exchange supply and demand maintained a basic equilibrium in China. A deficit of USD 8.2 billion was registered in banks' foreign exchange sales and settlements in the month, higher than a month ago, but other factors that impact foreign exchange supply and demand continued to play a balancing role. For example, as banks' foreign exchange positions reduced by USD 6 billion, foreign exchange supply increased in the month. Second, non-banking sectors such as enterprises witnessed slight fluctuations in foreign-related receipts and payments. A deficit of USD 6.2 billion was recorded in foreign-related receipts and payments in the month, versus a surplus in January because of high export receipts among Chinese enterprises and foreign capital inflows in the run-up to the Chinese Spring Festival. In the two months, foreign-related receipts and payments registered an accumulated surplus of USD 18.5 billion, versus a deficit of USD 7.8 billion for the same month last year. In addition, the balance of foreign exchange reserves as at the end of February declined month on month due to exchange rate conversion and recovery of asset prices, but the supply and demand of foreign exchange still maintained an equilibrium. The supply or demand of foreign exchange through major channels stayed stable. According to the data for January and February, after adjustment of the impact of the Chinese Spring Festival, the surplus of foreign exchange sales and settlements under trade in goods has grown stably since the beginning of the year, and foreign exchange sales and settlements under trade in goods for clients by banks recorded a surplus of USD 35.8 billion, up by 16% year on year; foreign exchange sales and settlements under direct investment continued with a surplus; foreign exchange settlements under FDI continued to rise, and foreign exchange purchases under ODI remained stable in January and February; enterprises' ROI and personal purchases of foreign exchange fell stably. Recently, despite heightened volatility of the global financial markets, domestic economy has operated stably, market expectations have been reasonably diverged, the RMB exchange rate against US dollars has continued with two-way fluctuations and remained stable, and the domestic supply and demand of foreign exchange has maintained a self-balance, indicating a stronger momentum for two-way cross-border capital flows and general equilibrium at present. 2018-03-19/en/2018/0319/1421.html
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Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China (PBC) show that China's foreign exchange reserves as at the end of December 2017 went up by USD 20.7 billion month on month. Could you brief us on the causes of such a change? What will be the future trends? A: As at the end of December 2017, China's foreign exchange reserves hit USD 3.1399 trillion, up by USD 20.7 billion or 0.66% month on month, marking the 11th month of consecutive growth. In December, China's cross-border capital flows and trading by domestic and foreign market participants stayed stable and balanced. Globally, the financial markets fluctuated slightly. The foreign exchange rates of major non-USD currencies and asset prices rose, driving China's foreign exchange reserves to go up. Through out the year, China's foreign exchange reserves recovered stably after a drop to USD 2.9982 trillion in January, with the figure for the yearend climbing by USD 129.4 billion or 4.3% from that of the beginning of the year. China's macroeconomic performance remained stable in the year with a strong momentum for growth, boosting cross-border capital flows to be more stable and balanced. The equilibrium of the balance of payments provided a guarantee for the continuous and steady recovery of foreign exchange reserves. 2018 is the first year to implement the spirit of the 19th CPC National Congress, key to building a moderately prosperous society in all respects and implementing the 13th Five-year Plan. Under the leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China will adhere to the general work guideline of making progress while maintaining stability, the new development philosophy and the requirement for high-quality development, to enhance the stability and resilience of economic performamce and ensure the development trend of mainitaing stability with a strong moement for grwth. As external demand rises, finanical marketa are further liberalized and market expectations are improved alongside the continuous global econonic recovery, China's balance of payments and foreign exchange reserves will remain stable and balanced going forward. 2018-01-07/en/2018/0107/1393.html