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China's External Portfolio Investment Assets at the End of 2021 2022-05-27/en/2022/0527/1956.html
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As shown in the statistics of the State Administration of Foreign Exchange (SAFE), in April 2022, the amount of foreign exchange settlement and sales by banks was RMB 1476.4 billion and RMB 1354.0 billion, respectively, with a surplus of RMB 122.4 billion. During January to April 2022, the accumulative amount of foreign exchange settlement and sales by banks was RMB 5669.7 billion and RMB 5174.2 billion, respectively, with an accumulative surplus of RMB 495.5 billion. In the US dollar terms, in April 2022, the amount of foreign exchange settlement and sales by banks was USD 229.7 billion and USD 210.6 billion, respectively, with a surplus of USD 19.0 billion. During January to April 2022, the accumulative amount of foreign exchange settlement and sales by banks was USD 890.0 billion and USD 812.2 billion, respectively, with an accumulative surplus of USD 77.8 billion. In April 2022, the amount of cross-border receipts and payments by non-banking sectors was RMB 3248.9 billion and RMB 3144.6 billion, respectively, with a surplus of RMB 104.3 billion. During January to April 2022, the accumulative amount of cross-border receipts and payments by non-banking sectors was RMB 13262.7 billion and RMB 12762.7 billion, respectively, with an accumulative surplus of RMB 500.0 billion. In the US dollar terms, in April 2022, the amount of cross-border receipts and payments by non-banking sectors was USD 505.4 billion and USD 489.2 billion, respectively, with a surplus of USD 16.2 billion. During January to April 2022, the accumulative amount of cross-border receipts and payments by non-banking sectors was USD 2082.2 billion and USD 2003.7 billion, respectively, with an accumulative surplus of USD 78.5 billion. Addendum: Glossary and relevant definitions Balance of payments (BOP) refers to all economic transactions between residents and non-residents. Foreign exchange settlement and sales by banks refers to settlement and sale transaction that bank executes for customers and for the banks themselves, including statistic data on settlements of forward contracts for foreign exchange settlement and sales and the exercises of option, and excluding the transactions in the interbank foreign exchange market. The statistic reporting date of Foreign exchange settlement and sales by banks should be the trade day of the Foreign exchange settlement and sales transaction. By definition, foreign exchange settlement means that foreign exchange holders sell foreign exchange to banks, and foreign exchange sales means that banks sell foreign exchange to foreign exchange buyers. The newly signed contract amount of forward foreign exchange settlement and sales refers to the binding forward contract between a bank and its client that predetermines foreign exchange currency, amount, exchange rate and tenor which to be executed upon maturity. The unwind amount of forward foreign exchange settlement and sales refers to, where client is unable to perform the original forward contract due to change in its real demand, client to fully or partially close its forward position by executing another deal with opposite direction to the original contract. The rolling amount of forward foreign exchange settlement and sales refers to client to adjust the settlement date of original contract due to change in its real demand. The outstanding amount of forward foreign exchange settlement and sales by the end of the current period refers to the total amount of forward contracts accumulated from all non-matured forward contracts with client. The net Delta exposure of outstanding options refers to the implied foreign exchange spot risk exposure from outstanding option contracts that bank executed with client. The cross-border receipts and payments by non-banking sectors refers to the receipts and payments between domestic non-banking sectors (including institutional and individual residents) and non-residents through domestic banks, excluding receipts and payments in cash. In particular, the statistics includes cross-border receipts and payments between non-banking sectors and non-residents through domestic banks (including RMB and foreign currency), and domestic receipts and payments between non-banking sectors and non-residents through domestic banks (temporarily excluding domestic receipts and payments in RMB between individual residents and non-resident individuals). Data are collected when customers conduct receipts and payments with non-resident counterparties at domestic banks. Specifically, the receipts refer to the capital of non-banking sectors received from non-residents via domestic banks; the payments refer to the capital of non-banking sectors paid to non-residents via domestic banks. 2022-05-17/en/2022/0517/1954.html
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As shown in the statistics of the State Administration of Foreign Exchange (SAFE), in May 2022, the amount of foreign exchange settlement and sales by banks was RMB 1374.8 billion and RMB 1365.1 billion, respectively, with a surplus of RMB 9.7 billion. During January to May 2022, the accumulative amount of foreign exchange settlement and sales by banks was RMB 7045.0 billion and RMB 6539.3 billion, respectively, with an accumulative surplus of RMB 505.7 billion. In the US dollar terms, in May 2022, the amount of foreign exchange settlement and sales by banks was USD 205.0 billion and USD 203.5 billion, respectively, with a surplus of USD 1.5 billion. During January to May 2022, the accumulative amount of foreign exchange settlement and sales by banks was USD 1095.0 billion and USD 1015.7 billion, respectively, with an accumulative surplus of USD 79.3 billion. In May 2022, the amount of cross-border receipts and payments by non-banking sectors was RMB 3348.2 billion and RMB 3296.4 billion, respectively, with a surplus of RMB 51.8 billion. During January to May 2022, the accumulative amount of cross-border receipts and payments by non-banking sectors was RMB 16610.9 billion and RMB 16059.1 billion, respectively, with an accumulative surplus of RMB 551.8 billion. In the US dollar terms, in May 2022, the amount of cross-border receipts and payments by non-banking sectors was USD 499.2 billion and USD 491.5 billion, respectively, with a surplus of USD 7.7 billion. During January to May 2022, the accumulative amount of cross-border receipts and payments by non-banking sectors was USD 2581.4 billion and USD 2495.2 billion, respectively, with an accumulative surplus of USD 86.2 billion. Addendum: Glossary and relevant definitions Balance of payments (BOP) refers to all economic transactions between residents and non-residents. Foreign exchange settlement and sales by banks refers to settlement and sale transaction that bank executes for customers and for the banks themselves,including statistic data on settlements of forward contracts for foreign exchange settlement and sales and the exercises of option, and excluding the transactions in the interbank foreign exchange market. The statistic reporting date of Foreign exchange settlement and sales by banks should be the trade day of the Foreign exchange settlement and sales transaction. By definition, foreign exchange settlement means that foreign exchange holders sell foreign exchange to banks, and foreign exchange sales means that banks sell foreign exchange to foreign exchange buyers. The newly signed contract amount of forward foreign exchange settlement and sales refers to the binding forward contract between a bank and its client that predetermines foreign exchange currency, amount, exchange rate and tenor which to be executed upon maturity. The unwind amount of forward foreign exchange settlement and sales refers to, where client is unable to perform the original forward contract due to change in its real demand, client to fully or partially close its forward position by executing another deal with opposite direction to the original contract. The rolling amount of forward foreign exchange settlement and sales refers to client to adjust the settlement date of original contract due to change in its real demand. The outstanding amount of forward foreign exchange settlement and sales by the end of the current period refers to the total amount of forward contracts accumulated from all non-matured forward contracts with client. The net Delta exposure of outstanding options refers to the implied foreign exchange spot risk exposure from outstanding option contracts that bank executed with client. The cross-border receipts and payments by non-banking sectors refers to the receipts and payments between domestic non-banking sectors (including institutional and individual residents) and non-residents through domestic banks, excluding receipts and payments in cash. In particular, the statistics includes cross-border receipts and payments between non-banking sectors and non-residents through domestic banks (including RMB and foreign currency), and domestic receipts and payments between non-banking sectors and non-residents through domestic banks (temporarily excluding domestic receipts and payments in RMB between individual residents and non-resident individuals). Data are collected when customers conduct receipts and payments with non-resident counterparties at domestic banks. Specifically, the receipts refer to the capital of non-banking sectors received from non-residents via domestic banks; the payments refer to the capital of non-banking sectors paid to non-residents via domestic banks. 2022-06-15/en/2022/0615/1963.html
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As at the end of March 2022, China's banking sector recorded external financial assets of USD 1568.7 billion, external liabilities of USD 1570.6 billion, and net external liabilities of USD 2.0 billion, including net RMB liabilities of USD 439.6 billion and net foreign currency assets of USD 437.6 billion. Among the external financial assets of the banking sector, by instrument, deposits and loans were USD 1125.6 billion, bonds investment, USD 241.1 billion, and other assets including equity, USD 202.0 billion, accounting for 72 percent, 15 percent and 13 percent of the sector's total external financial assets respectively. By currency, RMB assets were USD 230.5 billion, USD assets were USD 1049.2 billion, and other currency assets were USD 289.0 billion, accounting for 15 percent, 67 percent and 18 percent respectively. By counterpart sector, the amount invested in the overseas banking sector was USD 875.0 billion, accounting for 56 percent; the amount invested in the overseas non-banking sector was USD 693.7 billion, accounting for 44 percent. Among the external liabilities of the banking sector, by instrument, deposits and loans were USD 848.6 billion, bonds investment, USD 299.5 billion, and other liabilities including equity, USD 422.6 billion, accounting for 54 percent, 19 percent and 27 percent of the sector's total external liabilities respectively. By currency, RMB liabilities were USD 670.1 billion, USD liabilities, USD 570.3 billion, and other currency liabilities, USD 330.3 billion, accounting for 43 percent, 36 percent and 21 percent respectively. By counterpart sector, USD 600.0 billion was from overseas banking sector, accounting for 38 percent; while USD 970.7 billion was from overseas non-banking sector, accounting for 62 percent. (End) 2022-06-23/en/2022/0623/1964.html
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Q: The State Administration of Foreign Exchange (SAFE) has just released the latest data regarding China’s foreign exchange reserves. Could you explain the causes for the changes in foreign exchange reserves of May 2022? What will be the future trends? A: By the end of May 2022, China’s foreign exchange reserves stood at US$3.1278 trillion, up by US$8.1 billion, or 0.26%, from the end of April. In May 2022, China’s foreign exchange market was generally stable, and the domestic supply and demand of foreign exchange maintained a basic balance. In the international financial market, influenced by the monetary policies and expectations of major countries, global economic growth prospects, geopolitical situation and other factors, the US dollar index fell slightly, and the financial asset prices of major countries were mixed. Denominated in the US dollar, China’s foreign exchange reserves rose this month due to the combined effects of currency translation and asset price changes. At present, the external situation is complex and severe, the global economy is facing increasing risks and challenges, and the international financial market is still subject to great uncertainty. However, China has effectively coordinated epidemic prevention and control with economic and social development. China’s long-term economic fundamentals have not changed, which will support the overall stability of the foreign exchange reserves. 2022-06-07/en/2022/0607/1962.html
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Recently, the State Administration of Foreign Exchange (SAFE) releases data on China's external portfolio investment assets by country/region and by sector of resident holder at the end of 2021. The statistics show that China's external portfolio investment assets (excluding reserve assets) amounted to USD 979.7 billion by the end of 2021, including USD 648.4 billion in equity investments and USD 331.3 billion in bond investments.The top 5 recipients of Chinese investments were Hong Kong SAR, the United States, Cayman Islands, the British Virgin Islands and the United Kingdom, with the amounts being USD 434.2 billion, USD 204.5 billion, USD 83.0 billion, USD 70.0 billion and USD 24.6 billion respectively. By the end of 2021, other financial corporations (non-bank financial institutions), non-financial sector and banks were the main sectors holding external portfolio investment assets, with the amounts being USD 390.4 billion, USD 351.2 billion and USD 238.1 billion respectively, accounting for 40 percent, 36 percent and 24 percent of China’s total external portfolio investment assets. (End) 2022-05-27/en/2022/0527/1955.html
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According to the statistics of the State Administrationof Foreign Exchange (SAFE), the Chinese foreign exchange market (excludingforeign currency pairs, the same below) recorded total transactions of RMB 17.14 trillion (equivalent to USD 2.67 trillion) in April 2022. In terms of markets, the transactions volume of clientmarket was RMB 3.56 trillion(equivalent to USD 0.55 trillion), and the transactions volume of interbankmarket was RMB 13.58 trillion(equivalent to USD 2.11 trillion). Interms of products, the cumulative transactions volume of the spot market wasRMB 5.88 trillion (equivalent to USD 0.91 trillion), and that of the derivatives market was RMB 11.26 trillion (equivalent to USD 1.75 trillion). From January to April 2022, atotal of RMB 74.81 trillion (equivalent to USD11.75 trillion) was traded in the Chinese foreign exchange market. 2022-05-27/en/2022/0527/1958.html
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Q: The State Administration of Foreign Exchange (SAFE) has just released the latest data regarding China’s foreign exchange reserves. Could you explain the causes for the changes in foreign exchange reserves of April 2022? What will be the future trends? A: By the end of April 2022, China’s foreign exchange reserves stood at US$3.1197 trillion, down by US$68.3 billion, or 2.14%, from the end of March. In April 2022, China’s overall cross-border capital continued with the trend of net inflow, while supply and demand of China’s foreign exchange market were basically balanced. In the international financial market, influenced by factors like the expectations of monetary policies in major countries, geopolitical situation and COVID-19 pandemic, the US dollar index rose sharply, and global financial asset prices fell significantly. Denominated in the US dollar, China’s foreign exchange reserves declined this month due to the combined effects of non-US dollar currency translation decrease and asset price changes. At present, with the increasingly volatile and uncertain external circumstances, the world economic recovery has been slowing down, and the international financial market has seen more fluctuations. In contrast, by responding to COVID-19 and pursuing economic and social development in a well-coordinated way, China has sustained its strong resilience, great potential, and broad room for maneuver in economy with its fundamentals of sound long-term growth unchanged, which is conducive to the overall stability of the foreign exchange reserves. 2022-05-07/en/2022/0507/1961.html
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Dear Secretary Yin Li, Acting Mayor Yin Yong, President Fu Hua, and distinguished guests: Good afternoon, everyone! Since the beginning of this year, due to the impact of “high inflation” and “tight monetary policy”, the international financial market, including the foreign exchange market, has gone through a year of severe volatility, but China’s foreign exchange market has shown significant resilience. Now let me share some of my views on “U.S. dollar cycle and China’s foreign exchange market”, for your reference. The U.S. dollar is characterized by long-term fluctuations and is an important factor affecting the global financial market. Since the collapse of the Bretton Woods system, the U.S. dollar has experienced three major cycles of appreciation and depreciation. The current cycle of dollar appreciation has lasted 11 years since mid-2011. After the international financial crisis in 2008, the world experienced an environment of low growth, low inflation, and low interest rates for a long period of time. Until 2021, the inflation began to rise sharply. The big U.S. dollar cycle is driven by multiple factors. First, changes in long-term economic growth potential are an important determinant, and the growth rate of U.S. labor productivity is highly correlated with the trend of the U.S. dollar. Second, changes in interest rate spreads brought about by policy differentiation across countries drive cross-border capital flows and amplify cyclical fluctuations. Third, there is a self-reinforcing mechanism for the appreciation of the U.S. dollar. As the world’s leading financing currency, the U.S. dollar is caught in a cycle: “appreciation of the U.S. dollar → adjustment of asset prices in emerging markets → capital flowing back to the United States → appreciation of the U.S. dollar”. From the perspective of a long-term historical cycle, the global macro-environment may shift from “great moderation” to “high volatility”. From the 1980s to 2019, the global macro environment was characterized by low inflation and low volatility, which can be regarded as the “Great Moderation Era”. However, this trend has changed in 2021. After the epidemic, the massive stimulus policies of major developed countries boosted demand, but the supply recovery was restricted by supply chain disturbances, tight labor markets, and international geopolitical conflicts. As a result, inflation in major developed countries was much higher than the policy target. The volatility of economic record in major developed countries rose sharply, and the global macro environment may have entered an “Era of High Volatility”. To combat inflation, some of the world’s major central banks have rapidly tightened monetary policy. The Federal Reserve raised interest rates sharply and shrunk its balance sheet, tightening monetary policy in a speed rarely seen in history. The European Central Bank has also moved aggressively to raise interest rates, with the policy rate rising to the highest level since 2009. With inflation still high and economic drivers slowing down, the monetary policies of major central banks around the world are in a dilemma between stabilizing growth and controlling inflation. Since the beginning of this year, “high inflation” and “tight monetary policy” have caused severe shocks in the international financial market. Global equity, bond and other financial asset prices fell across the board, while the U.S. dollar has strengthened rapidly. The U.S. dollar index has appreciated by nearly 20% since the start of the year to above 114, hitting a 20-year high. Since October, based on the market expectation, major central banks would slow down interest rate hikes, and the U.S. dollar index would fall from its highs, but its year-to-date appreciation was still rare over the past 40 years. China’s foreign exchange market has shown new trend, and its resilience has been continuously enhanced. Compared with the previous two periods of U.S. dollar appreciation, the RMB exchange rate has become less sensitive to fluctuations in the U.S. dollar index since 2021. From a global perspective, the RMB depreciated at an average rate in comparison with currencies of the major developed and emerging market. Despite fluctuations, cross-border capital flows were in a stable and orderly manner on the whole. The strengthening of the resilience of the foreign exchange market was driven by various factors. First, the RMB exchange rate showed more two-way fluctuations with greater flexibility, and its role as automatic stabilizer in adjusting the balance of payments became more prominent, thus releasing external pressure in a timely and effective manner. Second, the basic balance of payments surplus played a leading role. In the first three quarters of this year, China recorded a current account surplus of USD 310.4 billion, the highest in history for the same period; and the ratio of the surplus to the GDP in the same period was 2.4%, which remained within a reasonable range of equilibrium. At the meantime, direct investment showed a net inflow, and cross-border capital flows were steady and orderly. Third, the overall external debt structure has been improved. The traditional financing type of external debt rose slightly, and the type structure, currency structure and maturity structure of external debt have been optimized. Fourth, the proportion of RMB used by enterprises in the cross-border transactions continued to increase, which helped reduce the risk of currency mismatch in cross-border transactions. Fifth, the exchange rate hedging tools have been popularized, which significantly enhanced enterprises’ adaptability to exchange rate fluctuations. The using of RMB assets as natural hedge has become increasingly prominent. Since the beginning of this year, the bond yields of major countries in the world have generally risen and prices have fallen, but RMB bonds have become one of the few financial assets with stable prices. Unlike other emerging market bonds, RMB bonds are quasi-safe assets, with risk-return characteristics closer to those of developed countries. China’s macroeconomic policy is dominated by itself, and the interest rate and exchange rate trend are relatively independent, which endows RMB bonds with a better diversification effect in global asset allocation. Looking ahead, China’s foreign exchange market will maintain a stable operation. On the one hand, the risk of economic recession in major developed countries is rising. As inflation is still above the policy target, the monetary policy will generally remain tight, and the U.S. dollar may remain high and volatile in the short term. Financial institutions predict that the momentum of U.S. dollar appreciation weakening, and the strong appreciation cycle may come to an end. On the other hand, the sound long-term economic fundamentals of China’s economy remain unchanged. The “20 optimized measures” will further improve the epidemic prevention and control in a more scientific and precise way, and make it more efficient in coordinating epidemic prevention and control as well as economic and social development. The effective implementation of various policy measures to stabilize economic growth in the early stage will further unleash the growth momentum of the Chinese economy. In addition, the financial authorities have issued a number of financial support policies in tandem with the real estate market authorities and local governments to support rigid and improvement demand for housing, to maintain stable and orderly real estate financing, to increase financial support for ensuring timely deliveries of presold homes, and to protect the legal rights and interests of housing consumers, which will help stop and weaken risk spillovers, and stabilize market expectations and confidence. The above-mentioned policies have played an active role in counter-cyclical adjustment and produced positive market effects. We will adhere to the guidelines and policies of the central government on the development of the real estate market. We will adhere to the principles of marketization and the rule of law, and promote the healthy and sustainable development of China’s real estate market by taking account of long-term and short-term factors, as well as seeking both temporary and permanent solutions. In the future, changes in the internal and external macro-environment will help maintain the sound operation of China’s foreign exchange market. Over the past ten years, we have coordinated opening-up and security, and have achieved remarkable results in the reform and opening-up of the foreign exchange sector. First, the market-oriented formation mechanism of the RMB exchange rate has been gradually improved. The exchange rate has become more flexible, two-way fluctuations have become normal, and the RMB exchange rate has remained basically stable at a reasonable and balanced level. Second, we have made steady progress in opening-up of the capital account, and a relatively high level of convertibility has been achieved. Specifically, cross-border direct investment has become basically convertible, cross-border securities investment has enjoyed two-way opening-up through multiple channels and at multiple levels, and independent cross-border financing activities by market entities have become operable under the framework of macro-prudential management. Third, the subjects, scale, and products of foreign exchange market transactions have grown rapidly, and at the meantime, an open and diversified foreign exchange market with sound functions and orderly competition has basically taken shape. Fourth, the international balance of payments was basically balanced, with greater stability and resilience. The ratio of the current account to GDP has always been maintained within a reasonable range, around 2% in recent years. Cross-border trade, investment and financing became more vibrant, and the scale of cross-border payments grew rapidly. Fifth, the “macro-prudential management plus micro regulation” framework of the foreign exchange market was established. The early warning and response mechanism for the supervision of cross-border capital flows has been continuously improved, and the macro-prudential tools have been further improved. Sixth, we have ensured the safety, liquidity, as well as value preservation and appreciation of the foreign exchange reserve assets. In the future, we will earnestly implement the guiding principles of the 20th National Congress of the Communist Party of China. Through coordinating financial opening-up and security, we will make every effort to build a foreign exchange management system that is compatible with a high-level of opening-up. We will deepen the reform and opening-up in the foreign exchange sector, and improve cross-border trade and investment and financing facilitation, so as to maintain the stable operation of the foreign exchange market as well as the national economic and financial security. I wish this year’s Annual Conference of the Financial Street Forum a complete success. Thank you! 2022-11-21/en/2022/1121/2022.html
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Party Secretary Yin Li, Mayor Yin Yong, Managing Director Kristalina Georgieva, General Manager Agustín Carstens, Ladies and gentlemen, Good afternoon! Let me begin by extending my congratulations to the Beijing Financial Street on its great development achievement over the past 30 years. Under the leadership of the CPC Central Committee and the State Council, and with the vigorous support of the CPC Beijing Municipal Committee and the Beijing Municipal Government, the Financial Street has blazed a trail with Chinese characteristics and played a key role in China’s economic and social development over the past three decades. Today, I would like to take this opportunity to share with you some of my observations on issues related to monetary policy. First, China’s monetary policy has provided significant support to the real economy. This year, the Chinese economy is faced with some challenges and downward pressure due to COVID-19 and some external shocks, and we have re-calibrated monetary policy in a timely fashion so as to provide greater support to the real economy. According to the deployment of the CPC Central Committee and the State Council, we have made use of a host of policy instruments and cut the required reserve ratio (RRR) by 25bps. The drop in loan prime rate (LPR) has translated into lower financing costs for the real economy, and broad money M2, social financing and new RMB loans have all maintained pretty robust growth. Measured by economic performance, China’s macroeconomic policy has proven to be well-calibrated. We have kept the economy stable, preserved price stability at home despite surging inflationary pressure worldwide, and maintained a fine balance between internal and external equilibrium. China’s GDP grew by 3.9 percent year on year (YoY) in Q3. The CPI increased by 2.1 percent YoY in October and its annual growth rate has stayed at around 2 percent over the past five years. Since the beginning of the year, the RMB has seen some depreciation against the US dollar but of a smaller scale compared with other major currencies. The value and purchasing power of RMB has been basically stable. Second, while providing significant support to the real economy, the PBOC has not substantially expanded its balance sheet. As of end-September 2022, the PBOC’s balance sheet was around $6 trillion (RMB40 trillion). Its size has stayed relatively stable over the past five years with an average growth rate of 2.6 percent. In recent years, we have used RRR cuts to provide medium and long-term liquidity. As we know, commercial banks have to put aside a certain amount of deposits at the central bank as required reserves. Cutting the RRR thus increases commercial banks’ excess reserves and allows them to lend more. As lower RRRs lead to higher money multipliers, we have managed to support more credit creation in the absence of significant balance sheet expansion. Since 2018, the PBOC has cut the RRR 13 times and brought the average RRR down to around 8% from its previous level of 15% and released a total of $1.5 trillion equivalent (RMB 10.8 trillion) long-term liquidity. In the meantime, the PBOC’s balance sheet has stabilized at around $5.5-6 trillion equivalent (RMB38 trillion to RMB40 trillion). Yet outstanding M2 has increased to over $35 trillion equivalent (RMB260 trillion) from less than $25 trillion equivalent (RMB170 trillion) at end-2017, which is a telling evidence of substantive monetary support for the real economy. Raising the RRR has played a key role in keeping the RMB value stable and inflation subdued for quite some time in the past. So cutting the RRR this time around has the effect of releasing some of the “frozen-up” liquidity in the past. Since the beginning of this century, China had experienced foreign reserves increasing for quite many years, and the PBOC’s balance sheet continued to grow. We had thus to constantly “freeze up” the increasing RMB liquidity associated with the continuously accumulating foreign reserves through raising the RRR and other sterilization operations. During this period, the size of PBOC’s balance sheet had grown much larger than those of our peers in the major advanced economies. In recent years however, we have by contrast, made many proactive decisions and preemptive adjustments on liquidity supply through a host of measures ranging from RRR cuts, open market operations, to structural monetary policy instruments. It is a far cry from the previous situation when liquidity supply by the PBOC was mainly a passive consequence of accumulation in foreign reserves. The independence of monetary policy has increased noticeably. Third, another feature of China’s monetary policy is its combination of aggregate and structural considerations. Our sound monetary policy not only includes aggregate support, but also has structural characteristics. We have leveraged structural monetary policy tools to enhance the financial support for agriculture, small and medium enterprises (SMEs), the private companies and other structural weak links on the supply side. As a result, finance has now become more accessible, available and affordable. As of end-September 2022, nearly 54 million SMEs have gained access to inclusive loans, four times that of end-2017, with outstanding loans hitting $3.5 trillion equivalent (RMB23 trillion). The weighted average interest rate on new inclusive loans issued in September was 4.7 %, down by 180bps compared with the same period of 2017. Different structural monetary policy tools can be either long-term or ad-hoc. Central bank relending and re-discounts in support of the agrarian sector and SMEs, which you are all quite familiar with and have an outstanding value of $360 billion equivalent (RMB 2.5 trillion), are typical examples of long-term tools. The typical ad-hoc tools that we put in place in recent years, however, include the special-purpose relending facilities in support of scientific and technological innovation, transportation and logistics, equipment upgrading, etc. With an outstanding value of $430 billion equivalent (RMB3 trillion), these ad hoc instruments have well-defined expiration dates or exit plans. When their policy goals are met, they will be phased out in an orderly manner. Last but not least, I would like to talk about the role of structural monetary policy in housing and green finance. China’s housing sector is linked to a lot of upstream and downstream industries. Therefore, its healthy development is of great significance to the overall economy. The housing market is undergoing some adjustments. Joining hands with relevant ministries and local governments, we have tailored policy solutions to local specificities. Such tools include cutting mortgage rates and down payment ratios, with an aim of supporting real housing needs. In some previous incidents, some troubled developers were unable to complete pre-sold housing projects on time. In response, we’ve issued $30 billion equivalent (RMB200 billion) worth of special loans to ensure their timely completion, and have put in place structural policy tools to encourage active participation by commercial banks. Meanwhile, we’ve also expanded support for bond issuance by private firms, including private housing developers, through credit enhancement facilities. We’ve also rolled out a carbon reduction tool to foster green development. Operating on market principles, this tool supports financial institutions’ lending to enterprises focusing on clean energy, emission reduction and carbon reduction. Tapping this tool, financial institutions need to estimate and disclose the carbon cuts financed by such loans. This will help promote the mentality of green development, and the practice of carbon accounting and disclosure. By the end of September 2022, around $35 billion equivalent (RMB240 billion) worth of carbon reduction credit facility has been used, mobilized around $60 billion equivalent (RMB400 billion) worth of carbon reduction loans, and financed carbon cuts of more than 80 million tons. Recently, we’ve included two foreign-funded banks to the list of financial institutions eligible for extending such loans. Going forward, the People’s Bank of China will continue to take Xi Jinping Thought on Socialism with Chinese Characteristics as our guide and implement the guiding principles set forth by the 20th CPC National Congress. We will continue to build a modern central banking system, implement sound monetary policy to serve the real economy, prevent financial risks and deepen financial reforms. We will also continue to support the Financial Street in developing into the national center of financial administration and in contributing even more to China’s modernization. Finally, I wish the Forum a complete success. Thank you! 2022-11-21/en/2022/1121/2020.html