-
Pan Gongsheng, administrator of the State Administration of Foreign Exchange (SAFE) recently met with a delegation headed by Larry Fink, Founder and Chairman of BlackRock, Inc. Both sides exchanged ideas on issues such as conditions of the global economy and financial markets. 2019-08-14/en/2019/0814/1546.html
-
Catalogue of Major Effective Laws and Regulations on Foreign Exchange Administration (as of June 30, 2019) 2019-07-24/en/2019/0724/1551.html
-
FILE：Annual Report of the State Administration of Foreign Exchange (2018) 2019-09-05/en/2019/0905/1549.html
-
The year 2019 marks the 70th anniversary of the founding of the People's Republic of China. Over the past seven decades, China has gone through fundamental changes of historic significance after trials and tribulations. Foreign exchange authorities, uniting around the Communist Party of China and the central government, have efficiently allocated and harnessed foreign exchange resources, making great contributions to China's economic growth and national development at different periods. Since the reform and opening-up, foreign exchange authorities have followed the paths of reform towards a socialist market economy, remained committed to the basic national strategy of opening-up, and effectively coped with the impact of all previous global financial crises while promoting trade and investment liberalization and facilitation. Since the 18th CPC National Congress, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, foreign exchange authorities have been committed to serving the new open economic system and the Belt and Road Initiative. As foreign exchange administration has continued to pursue the opening-up policy and the market-oriented reform of RMB exchange rate has constantly made progress, foreign exchange authorities have managed to withstand the intensive risk shocks from cross-border capital flows, effectively ensuring China's economic and financial security in the complex and challenging environment. As a result, foreign exchange administration systems and mechanisms, which are aligned with the new pattern of comprehensive opening-up in the new era and modernization of national governance systems and capabilities, have witnessed constant improvement in practice. A highly centralized foreign exchange administration system that was grounded in national realities provided a strong support for economic recovery and growth (1949-1978) After three years of economic recovery since the founding of the People's Republic of China, China started socialist construction in 1953 under the comprehensive planned economic system. Due to strong demands for foreign exchange in economic activities, foreign exchange that was already scarce was in a serious shortage. To support economic recovery and growth in such political and economic environments, China adopted a highly-centralized foreign exchange administration system, which played a positive role in safeguarding the balance of foreign exchange receipts and payments, maintaining stability of foreign exchange rates, and serving the nation’s foreign policies and socialist construction. Centralized administration and unified operations of foreign exchange were performed in this phase. Foreign exchange administration was the shared responsibility of the Ministry of Foreign Economic Relations and Trade, the Ministry of Finance, and the People's Bank of China, with their roles clearly defined, and foreign exchange operation was the sole responsibility of the Bank of China. Foreign exchange equilibrium and uniform allocation across China were ensured by the National Planned Economic Committee under the guideline of "centralizing receipts and payments, determining payments based on receipts, realizing basic equilibrium and retaining a certain balance". All foreign exchange receipts shall be sold to the government, and foreign exchange was allocated and granted in line with the state plan in case of need. Moreover, the balance of payments (BOP) policy featuring "determining payments based on receipts and determining inflow based on outflow” was adopted to ensure the equilibrium of foreign exchange receipts and payments in accordance with mandatory plans and administrative approaches. Almost no external debt was registered in this period. Following the guideline of "independent growth complemented by foreign assistance" to shore up economic growth, China made petty government loans from the Soviet Union only in the early days of the New China and during the First Five-year Plan period to support fundamental industrial and agricultural development. China paid off both the principal and interest in 1964, ahead of schedule. For a long time that followed, China made no borrowings and forbade FDI. As international relations changed in the 1960s and 1970s, China began turning to the West for foreign investment, chiefly in the forms of export credit and foreign deposits. Overall, however, China leveraged a limited amount of foreign funds in this period. RMB exchange rates stayed stable in this phase. Along with the country’s economic recovery and financial integration, the uniform RMB exchange rate was launched in 1950. Announced by the People's Bank of China, the uniform exchange rate was chiefly used as an instrument for planning and accounting. As domestic prices were gradually stabilized after 1953 and the fixed foreign exchange rate regime was adopted in Western countries, the RMB exchange rate against pound was basically fixed at 6.893:1. After the Bretton Woods System collapsed in 1973, Western countries began adopting a floating exchange rate regime successively. In line with the floatation of exchange rates in Western currencies, RMB exchange rates were adjusted to the weighted averages against a basket of other major currencies to remain stable. With the establishment of a dedicated foreign exchange authority, a foreign exchange administration model which integrated planned administration and market-based adjustment took shape (1979-1993) In December 1978, the Third Plenary Session of the 11th CPC Central Committee decided to introduce the reform and opening-up policy, shifting the focus of the Party and the central government to economic development, which signaled the kick-off of the foreign exchange administration system reform. Ratified by the State Council, the State Administration of Foreign Exchange (SAFE) was officially established on March 13, 1979. After several rounds of adjustments, the existing foreign exchange administration system came into being. The foreign exchange retention system was put in place during this period. To further support foreign-related economic growth, the State Council made it known in August 1979 that, while ensuring centralized administration, consistency and equilibrium, and focused efforts, the foreign exchange retention system would be adopted for trading and non-trading activities, allowing local governments, sectors and enterprises which generated foreign exchange to access a proportional foreign exchange quota, so as to support the exports of materials and technologies necessary for production and business expansion. By linking foreign exchange utilization and earning, the retention system provided a strong boost to the momentum of local governments and enterprises to generate foreign exchange, with trade volume multiplying and turning the deficit in foreign exchange receipts and payments into a surplus. But this system also had its downside, leaving foreign exchange quota in excess or in short supply. Beijing and Shanghai conducted foreign exchange swaps in 1980, allowing enterprises to engage in paid transfers of the retained foreign exchange quota based on government pricing. The first foreign exchange swap center was established in Shenzhen in 1985. As of the end of 1993, there were a total of 108 foreign exchange swap centers across China, which allocated 80% of foreign exchange and formed a dual exchange rate system featuring the co-existence of adjusted foreign exchange rates and official foreign exchange rates. Foreign exchange authorities stepped up FDI attraction in this period. In the initial stage of the reform and opening-up, given the fund shortage for domestic construction and introduction of advanced foreign technology, foreign exchange authorities introduced the "loose control on foreign exchange receipts and strict control on foreign exchange payments" policy in response to government policies, vigorously supporting enterprises to utilize foreign investments and rationally use overseas loans. In 1983, three types of foreign-funded enterprises were allowed to open foreign exchange deposit accounts, freely withdraw and remit out foreign exchange, and price some of their products and services in foreign currency terms in China. After 1986, to address the imbalances between foreign exchange receipts and payments, Sino-foreign joint ventures were allowed to swap foreign exchange within a certain scope, and foreign-funded enterprises to reinvest with RMB profits reaped and enjoy benefits related with foreign exchange investments. Afterwards, foreign exchange authorities and other industrial competent authorities introduced a series of policies and regulations on foreign investment to improve the investment environment in China, increase China's attractiveness to foreign capital and ensure healthy development of foreign investments. The foreign exchange reserves operation and management system took initial shape. When the New China was just founded, it took planned and administrative approaches to balance foreign exchange receipts and payments. In the early stage of reform and opening-up, due to the rapidly-growing demand for foreign exchange along with fast growth of China's foreign-related economy, foreign exchange was in a serious shortage, even with negative foreign exchange reserves in particular years. To ensure the equilibrium of BOP and tighten foreign exchange reserves management, China began building a foreign exchange reserves operation and management system in the 1980s. At that time, China's foreign exchange reserves included state foreign exchange balance and foreign exchange balance of the Bank of China, but after the Bank of China was restructured into a commercial bank, its foreign exchange balance was no longer included in state foreign exchange reserves from 1993 onward. As the market became increasingly important in allocating foreign exchange resources, the foreign exchange administration system that fits the socialist market economy kept improving (1994-2012) In November 1993, the Third Plenary Session of the 14th CPC National Congress adopted the Decisions of the CPC Central Committee on Issues Related to the Building of a Socialist Market Economic System, a framework document for the new round of reform and opening-up. It outlined the fundamental framework of a socialist market economic system, proposed to speed up reform and opening-up as well as socialist modernization, and required "reforming the foreign exchange administration system, building a market-based and managed floating exchange rate system, and a unified and standardized foreign exchange market, so as to gradually make the yuan convertible". In this period, with continued reform and development, China preliminarily established a foreign exchange administration system framework that was fit for the socialist market economy. Innovative foreign exchange administration concepts and approaches were explored. Distinctive practices were adopted by foreign exchange authorities at different stages. In 1993, the foreign exchange administration system reform was kick-started in an all-around manner, with the management mindset of “loose control on foreign exchange receipts and strict control on foreign exchange payments” gradually shifted. In 2001, China accessed to the WTO. In order to adapt to the open economy of a large country, "equilibrium-oriented foreign exchange administration" that is aimed at finding a BOP equilibrium was adopted. In 2009, foreign exchange authorities further proposed "five shifts" in the philosophy and approach of foreign exchange administration, i. e., shifts from focusing on approval to monitoring and analysis, from ex-ante regulation to ex-post management, from behavioral management to participant management, from "assuming guilty until proven innocent" to "assuming innocent until proven guilty", and from a "positive list" to a "negative list". Therefore, foreign exchange authorities became more capable to serve the real economy. The RMB exchange rate formation mechanism was reformed. To adapt to the transition from planned economy to market economy, the official RMB exchange rate and the swap exchange rate were integrated in 1994 into a single and managed floating exchange rate system based on market supply and demand. In 2005, a market-based and managed floating exchange rate regime that is adjusted against a basket of currencies was adopted, indicating RMB exchange rates were no longer pegged solely to the US dollar. In 1994, in response to the RMB exchange rate formation mechanism reform, the foreign exchange retention and payment system was abolished, the bank-based foreign exchange settlement and sales system was established, and a nationwide uniform interbank foreign exchange market was created. In 1998, the foreign exchange swapping business was abolished. By the turn of the new century, with the advancement of the RMB exchange rate formation mechanism reform, the mandatory foreign exchange settlement and sales system came to its end. The RMB convertibility increased. At the end of 1996, China accepted the obligations of Article VIII of the Articles of Agreement of the International Monetary Fund, and announced full RMB current account convertibility and officially removed the remaining restrictions on frequent international payments and transfers. For trade in goods, verification transaction by transaction was replaced by aggregate verification, dynamic monitoring and classified management; for trade in services, approval was further simplified. In 2007, the annual facilitation quota of the individual settlement and sales of foreign exchange was raised from USD 20,000 to USD 50,000 to satisfy residents' needs for foreign exchange for overseas trips and studies. For capital account, foreign exchange administration for FDI and ODI was improved, and the external debt administration system and the qualified institutional investor system were established, in a bid to constantly meet investment and financing needs of domestic and overseas investors. The adverse impact from cross-border capital flows was effectively prevented. During the 1997 Asian financial crisis, while adhering to current account convertibility, foreign exchange authorities intensified authenticity verification and tightened capital account management, thus ensuring orderly foreign exchange receipts and payments and strengthening market confidence. China's commitment of not devaluing the yuan helped avoid competitive currency depreciation in Asia and safeguard the stable economic and financial environment in the region, which was widely acclaimed by the international community. In the wake of the 2008 global financial crisis, major developed economies adopted the QE monetary policy, producing a huge impact on China's foreign exchange situations. By closely tracking the changes, foreign exchange authorities tightened monitoring, early warning and authenticity verification of cross-border capital flows, stabilizing the RMB exchange rates at rational and balanced levels, and effectively averting shocks from external risks. Foreign exchange reserve operations and management were refined. Since the advent of the 21st century, China has no longer been short of foreign exchange and instead, it has come first in the world by foreign exchange reserves since 2006. Facing the sharp fluctuations in global financial markets, China has adopted a three-level foreign exchange reserve management system that involves the State Council, the People's Bank of China and the SAFE, in a bid to refine the mid and long-term strategies, prudentially optimize currency and asset structures, and ensure the security, liquidity and value preservation and appreciation of reserve assets. In addition, foreign exchange reserves have been used for diversified purposes, such as supporting the state-owned commercial bank reform through Central Huijin Investment Ltd. in 2003. The SAFE Co-Financing was created in 2011, laying a foundation for establishing equity investment institutions like the Silk Road Fund, and serving the Belt and Road Initiative as well as international production capacity cooperation. With great efforts spent on the coordination and balance of facilitation and risk prevention, a cross-border capital flow management framework that fits opening-up at a higher level has been built and refined (2013-present) The key to the economic system reform is to coordinate the relations between government and market, giving the market a decisive role in asset allocation while giving better play to the role of the government, the Third Plenary Session of the 18th CPC National Congress clarified in November 2013. The 19th CPC National Congress announced Xi Jinping thought on socialism with Chinese characteristics for a new era, signaling socialism with Chinese characteristics has entered a new era. While following its work guideline of achieving progress while maintaining stability, foreign exchange authorities have been committed to coordinating and balancing the efforts of trade and investment liberalization and facilitation and of guarding against risks arising from cross-border capital flows. Adapting ourselves to opening-up in an open environment, we have refined the integrated management framework of "macro-prudence + micro-regulation", and proactively coped with the severe shocks to foreign exchange markets, thus effectively safeguarding China's economic and financial security. Capital account liberalization has been steadily advanced. Foreign exchange authorities have coordinated transactions and exchanges considering the stage of economic development, financial market developments and financial stability requirements, driving the liberalization of inconvertible accounts and strengthening facilitation to convertible accounts. For direct investment, foreign exchange authorities have dramatically simplified foreign exchange administration for FDI and tightened classified management for ODI, making direct investment basically convertible. With a focus on financial market liberalization, foreign exchange authorities have enabled cross-border securities transaction connectivity, refined the qualified institutional investor system, and fueled the opening of interbank bonds markets and domestic commodity futures markets, expanding the channels for cross-border securities investments. Moreover, foreign exchange authorities have built a macro-prudential management framework for full-scale cross-border financing, diversifying financing channels for market players and reducing their financing costs. Trade facilitation has been constantly enhanced. While adhering to the principle of current account convertibility, foreign exchange authorities have endeavored to safeguard true and authentic international payments and transfers under the current account in line with the law. We have introduced a series of facilitation initiatives to support trade in goods, trade in services, insurance institution, foreign currency banknotes and individual foreign exchange businesses, and to boost applications of blockchain technology in foreign exchange administration. While pressing ahead with the "delegation, regulation and optimized service" reform, we have been committed to improving the SAFE's Internet Plus Government Services initiative to optimize the business environment. We also have supported new trading formats such as cross-border e-commerce, market purchasing trade, and integrated foreign trade services. We have been active in serving regional opening, innovation and special regional construction, and helped with piloting of foreign exchange administration reform in relevant regions. We have vigorously supported trade and investment activities along the Belt and Road, updating annually the Overview of National Foreign Exchange Administration Policy under the Belt and Road Initiative. Heavy shocks to foreign exchange markets have been warded off. Since 2015, under the combined impacts of domestic and foreign factors, China's foreign exchange markets have experienced several rounds of negative spiral featuring "capital outflows, reduction of foreign exchange reserves and RMB depreciation". Facing these tough challenges, foreign exchange authorities followed the arrangements of the CPC Central Committee and the State Council, and promptly developed and implemented a package of measures such as increasing RMB exchange rate elasticity, using a selection of macro-prudential management instruments, and increasing market expectation guidance, thus stabilizing China's foreign exchange markets and safeguarding its economic and financial security. Since 2018, as the US-China trade tension has escalated and external environments become increasingly complex and volatile, foreign exchange authorities, led by the CPC Central Committee, have synthesized the learnings from coping with past external shocks and risks and taken proactive steps, ultimately stabilizing China's foreign exchange markets. The macro-prudential management framework for cross-border capital flows has initially taken shape. To forestall systematic financial risks arising from large-scale, unstable cross-border capital flows, foreign exchange authorities, guided by the market and the principle of ensuring current account convertibility, have regulated trading behaviors of foreign exchange market players against business cycles. We have built and refined the monitoring, early warning and response mechanisms for cross-border capital flows and more effectively used policy instruments such as countercyclical factors of median prices, provisions of risk and macro-prudential framework for full-scale cross-border financing. The Measures for Assessing Micro-compliance and Prudential Operations of Foreign Exchange Business at Banks were introduced to increase the communication efficiency of foreign exchange administration policies. The policy system for micro regulation of the foreign exchange market has been improving. Such micro regulation is aimed at ensuring a stable and reliable policy framework about convertibility, maintaining the orderly competition in foreign exchange markets, safeguarding legal rights and interests of consumers and forestalling operational risks to market players that are associated with foreign exchange. In addition, the policy objectives can be realized through three pillars, i. e., authenticity verification, behavioral regulation and micro-prudential regulation. To this end, foreign exchange authorities, while ensuring usual trade and investment activities, have sustained stability, consistency and predictability of cross-cyclical micro-regulation in foreign exchange markets. We have cracked down upon cross-border arbitrage, underground banks, illegal foreign-exchange margins and other behaviors violating foreign exchange laws and regulations, maintaining a good order in foreign exchange markets. China is still and will remain in the window of opportunity for a long period to come. Foreign exchange authorities will unite more closely around the CPC Central Committee with Comrade Xi Jinping at the core, and guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We will keep firmly in mind the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment. We should strengthen our confidence in the path, theory, system, and culture of socialism with Chinese characteristics. We should resolutely uphold General Secretary Xi Jinping’s core position on the Party Central Committee and in the Party as a whole, and resolutely uphold the Party Central Committee’s authority and its centralized, unified leadership. Following the decisions and arrangements of the CPC Central Committee and the State Council, we will become down-to-earth, break new grounds and make innovations to expand high-level opening-up, guard against risks arising from cross-border capital flows, and serve comprehensive opening-up, in a bid to make greater contributions to the building of a moderately prosperous society in all aspects and the achievement of great victory of socialism with Chinese characteristics in the new era. (The original text is available in the 19th issue of China Finance in 2019) 2019-09-30/en/2019/0930/1574.html
-
In the second quarter of 2019, China's current account registered a surplus of RMB 314.6 billion, and the capital and financial accounts recorded a surplus of RMB 145.6 billion.The financial account (excluding reserve assets) recorded a surplus of RMB 94.1 billion, and reserve assets declined by RMB 51.9 billion. In the first half of 2019, China's current account registered a surplus of RMB 598.4 billion, and the capital and financial accounts recorded a surplus of RMB 291.2 billion. The financial account (excluding reserve assets) recorded a surplus of RMB 307.5 billion, and reserve assets rose by RMB15.7 billion. In the US dollar terms, in the second quarter of 2019, China's current account recorded a surplus of USD 46.2 billion, including a surplus of USD 120.6 billion under trade in goods, a deficit of USD 65.8 billion under trade in services, a deficit of USD 11.9 billion under primary income, and a surplus of USD 3.3 billion under secondary income. The capital and financial accounts recorded a surplus of USD 21.4 billion, including a deficit of USD 60 million under the capital account, a surplus of USD 13.8 billion under the financial account (excluding reserve assets), and a decline of USD 7.6 billion under reserves assets. In the US dollar terms, in the first half of 2019, China's current account recorded a surplus of USD 88.2 billion, including a surplus of USD 208.4 billion under trade in goods, a deficit of USD 129.3 billion under trade in services, a surplus of USD 3.7 billion under primary income, and a surplus of USD 5.4 billion under secondary income. The capital and financial accounts recorded a surplus of USD 43.0 billion, including a deficit of USD 0.1 billion under the capital account, a surplus of USD 45.4billion under the financial account (excluding reserve assets), and an increase of USD 2.4 billion under reserves assets. In SDR terms, in the second quarter of 2019,China posted a surplus of SDR 33.3 billion under the current account, and a surplus of SDR 15.4 billion under the capital and financial accounts. The financial account (excluding reserve assets) registered a surplus of SDR 10 billion, and reserves assets decreased by SDR 5.5 billion. In SDR terms, in the first half of 2019,China posted a surplus of SDR 63.6 billion under the current account, and a surplus of SDR 30.9 billion under the capital and financial accounts. The financial account (excluding reserve assets) registered a surplus of SDR 32.7 billion, and an increase of SDR 1.7 billion under reserves assets. In addition, to facilitate understanding of China’s Balance of Payments and International Investment Position among all users, the BOP Analysis Team of SAFE released China’s Balance of Payments Report for the First Half of 2019（in Chinese）. (End) Abridged Balanceof Payments of China, Second Quarter of 2019 Item Line No. RMB 100 million USD 100 million SDR 100 million 1. Current Account 1 3,146 462 333 Credit 2 50,246 7,374 5,325 Debit 3 -47,101 -6,913 -4,992 1. A Goods and Services 4 3,733 548 396 Credit 5 45,563 6,687 4,829 Debit 6 -41,830 -6,139 -4,433 1.A.a Goods 7 8,218 1,206 871 Credit 8 41,532 6,095 4,402 Debit 9 -33,314 -4,889 -3,531 1.A.b Services 10 -4,486 -658 -475 Credit 11 4,031 592 427 Debit 12 -8,516 -1,250 -903 1.B Primary Income 13 -810 -119 -86 Credit 14 4,215 619 447 Debit 15 -5,026 -738 -533 1.C Secondary Income 16 223 33 24 Credit 17 468 69 50 Debit 18 -245 -36 -26 2. Capital and Financial Account 19 1,456 214 154 2.1 Capital Account 20 -4 -1 0 Credit 21 2 0 0 Debit 22 -6 -1 -1 2.2 Financial Account 23 1,460 214 155 Assets 24 -2,914 -428 -309 Liabilities 25 4,374 642 464 2.2.1 Financial Account Excluding Reserve Assets 26 941 138 100 2.2.1.1 Direct Investment 27 587 86 62 Assets 28 -1,750 -257 -186 Liabilities 29 2,337 343 248 2.2.1.2 Portfolio Investment 30 244 36 26 Assets 31 -1,555 -228 -165 Liabilities 32 1,799 264 191 2.2.1.3 Financial Derivatives (other than reserves) and Employee Stock Options 33 66 10 7 Assets 34 169 25 18 Liabilities 35 -103 -15 -11 2.2.1.4 Other Investment 36 45 7 5 Assets 37 -296 -43 -31 Liabilities 38 341 50 36 2.2.2 Reserve Assets 39 519 76 55 3. Net Errors and Omissions 40 -4,601 -675 -488 Notes: 1.The statement is compiled according to BPM6. Reserve assets are included in capital and financial accounts. 2."Credit" is presented as positive value while "debit" as negative value, and the balance is the sum of the"Credit" and the "Debit". All items herein refer to balance,unless marked with "Credit" or "Debit". 3.The RMB denominated quarterly BOP data is converted from the USD denominated BOP data,using quarterly average central parity rate of RMB against USD. The quarterly accumulated RMB denominated BOP data is derived from the sum total of the RMB denominated data for the quarters. 4.The SDR denominated quarterly BOP data is converted from the USD denominated BOP data,using quarterly average exchange rate of SDR against USD. The quarterly accumulated SDRdenominated BOP data is derived from the sum total of the SDR denominated data for the quarters. 5.This statement employs rounded-off numbers. 6.For detailed data, please see “Data and Statistics” at the website of SAFE. Abridged China’s Balance of Payments, First Half of 2019 Item Line No. RMB 100 million USD 100 million SDR 100 million 1. Current Account 1 5,984 882 636 Credit 2 95,651 14,104 10,158 Debit 3 -89,666 -13,222 -9,523 1. A Goods and Services 4 5,372 791 570 Credit 5 86,034 12,686 9,137 Debit 6 -80,663 -11,895 -8,567 1.A.a Goods 7 14,138 2,084 1,501 Credit 8 77,994 11,500 8,283 Debit 9 -63,856 -9,416 -6,782 1.A.b Services 10 -8,766 -1,293 -931 Credit 11 8,040 1,186 854 Debit 12 -16,806 -2,479 -1,785 1.B Primary Income 13 244 37 26 Credit 14 8,740 1,289 928 Debit 15 -8,496 -1,252 -902 1.C Secondary Income 16 369 54 39 Credit 17 877 129 93 Debit 18 -508 -75 -54 2. Capital and Financial Account 19 2,912 430 309 2.1 Capital Account 20 -6 -1 -1 Credit 21 8 1 1 Debit 22 -14 -2 -1 2.2 Financial Account 23 2,918 430 310 Assets 24 -5,152 -759 -547 Liabilities 25 8,070 1,190 857 2.2.1 Financial Account Excluding Reserve Assets 26 3,075 454 327 2.2.1.1 Direct Investment 27 2,378 352 253 Assets 28 -3,170 -467 -337 Liabilities 29 5,548 819 589 2.2.1.2 Portfolio Investment 30 1,557 230 166 Assets 31 -2,647 -390 -281 Liabilities 32 4,205 621 447 2.2.1.3 Financial Derivatives (other than reserves) and Employee Stock Options 33 4 1 0 Assets 34 116 17 12 Liabilities 35 -112 -16 -12 2.2.1.4 Other Investment 36 -864 -128 -92 Assets 37 706 105 75 Liabilities 38 -1,570 -233 -167 2.2.2 Reserve Assets 39 -157 -24 -17 3. Net Errors and Omissions 40 -8,896 -1,312 -945 Notes: 1.The statement is compiled according to BPM6. Reserve assets are included in capital and financial accounts. 2."Credit" is presented as positive value while "debit" as negative value, and the balance is the sum of the"Credit" and the "Debit". All items herein refer to balance, unless marked with "Credit" or "Debit". 3.The RMB denominated quarterly BOP data is converted from the USD denominated BOP data, using quarterly average central parity rate of RMB against USD. The quarterly accumulated RMB denominated BOP data is derived from the sum total of the RMB denominated data for the quarters. 4.The SDR denominated quarterly BOP data is converted from the USD denominated BOP data, using quarterly average exchange rate of SDR against USD. The quarterly accumulated SDR denominated BOP data is derived from the sum total of the SDR denominated data for the quarters. 5.This statement employs rounded-off numbers. 6.For detailed data, please see “Data and Statistics” at the website of SAFE. 2019-09-27/en/2019/0927/1569.html
-
As at the end of June 2019, China’s external financial assets reached USD 7442.7 billion, external financial liabilities reached USD 5417.5 billion, and net external assets totaled USD 2025.2 billion. In the external financial assets, direct investment assets amounted to USD 1952.2 billion, portfolio investment assets, USD 560.2 billion, financial derivative assets, USD 8.0 billion, other investment assets, USD 1697.0 billion, and reserves assets,USD 3225.2 billion, accounting for 26 percent, 8 percent, 0.1 percent, 23 percent and 43 percent of external financial assets respectively. In external liabilities, direct investment liabilities were USD 2834.8 billion,portfolio investment liabilities, USD 1263.3 billion, financial derivative liabilities, USD 7.7 billion and other investment liabilities, USD 1311.7 billion, accounting for 52 percent, 23 percent, 0.1 percent and 24 percent of the external financial liabilities respectively. In SDR terms, China’s external financial assets and liabilities reached SDR 5353.7 billion and SDR 3896.9 billion respectively, and external net assets totaled SDR 1456.8 billion at the end of June 2019. In addition, to facilitate understanding of China’s Balance of Payments and International Investment Position among all users,the BOP Analysis Team of SAFE released China’s Balance of Payments Report for the First Half of 2019 (in Chinese). (End) China's International Investment Position, End of June 2019 Item Line No. Position in 100 million USD Position in 100 million SD Net Position 1 20,252 14,568 Assets 2 74,427 53,537 1 Direct Investment 3 19,522 14,043 1.1 Equity and Investment Fund Shares 4 16,822 12,100 1.2 Debt Instruments 5 2,701 1,943 1.a Financial Sectors 6 2,665 1,917 1.1.a Equity and Investment Fund Shares 7 2,552 1,836 1.2.a Debt Instruments 8 113 81 1.b Non-financial Sectors 9 16,857 12,126 1.1.b Equity and Investment Fund Shares 10 14,269 10,264 1.2.b Debt Instruments 11 2,588 1,862 2 Portfolio Investment 12 5,602 4,030 2.1 Equity and Investment Fund Shares 13 3,034 2,182 2.2 Debt Securities 14 2,568 1,848 3 Financial Derivatives (other than reserves) and Employee Stock Options 15 80 58 4 Other Investment 16 16,970 12,207 4.1 Other Equity 17 69 50 4.2 Currency and Deposits 18 3,982 2,864 4.3 Loans 19 6,895 4,960 4.4 Insurance, Pension, and Standardized Guarantee Schemes 20 118 85 4.5 Trade Credit and Advances 21 5,382 3,871 4.6 Others 22 524 377 5 Reserve Assets 23 32,252 23,200 5.1 Monetary Gold 24 873 628 5.2 Special Drawing Rights 25 108 78 5.3 Reserve Position in the IMF 26 82 59 5.4 Foreign Exchange Reserves 27 31,192 22,437 5.5 Other Reserve Assets 28 -3 -2 Liabilities 29 54,175 38,969 1 Direct Investment 30 28,348 20,391 1.1 Equity and Investment Fund Shares 31 26,066 18,750 1.2 Debt Instruments 32 2,282 1,642 1.a Financial Sectors 33 1,537 1,106 1.1.a Equity and Investment Fund Shares 34 1,384 996 1.2.a Debt Instruments 35 153 110 1.b Non-financial Sectors 36 26,811 19,286 1.1.b Equity and Investment Fund Shares 37 24,681 17,754 1.2.b Debt Instruments 38 2,129 1,532 2 Portfolio Investment 39 12,633 9,087 2.1 Equity and Investment Fund Shares 40 8,019 5,768 2.2 Debt Securities 41 4,614 3,319 3 Financial Derivatives (other than reserves) and Employee Stock Options 42 77 55 4 Other Investment 43 13,117 9,435 4.1 Other Equity 44 0 0 4.2 Currency and Deposits 45 4,417 3,177 4.3 Loans 46 4,799 3,452 4.4 Insurance, Pension, and Standardized Guarantee Schemes 47 125 90 4.5 Trade Credit and Advances 48 3,463 2,491 4.6 Others 49 216 156 4.7 Special Drawing Rights 50 97 70 Notes:1. This table employs rounded-off numbers. 2.Net International Investment Position refers to assets minus liabilities. Positive figure refers to net assets, and negative figure refers to net liabilities. 3.The SDR denominated data is converted from the USD denominated data, using the exchange rate of SDR against USD at the end of the quarter. 2019-09-27/en/2019/0927/1570.html
-
On the morning of September 30, the State Administration of Foreign Exchange (SAFE) held a national-flag-raising ceremony in the office area of its headquarters to celebrate the 70th anniversary of the founding of the People's Republic of China. Attendees included Pan Gongsheng, Secretary of the CPC Leadership and Administrator of the SAFE, Beijing-based members of the CPC Leadership and chief accountant. The ceremony started at 9:00 am. To the inspiring and exciting March of the Volunteers, the Five-starred Red Flag rose slowly but steadily, fluttering in the morning breeze. All the attendees gave a solemn eye salute to the national flag, while singing the national anthem with excitement. In this manner, they showed their deep respect and affection for their motherland, wishing the Chinese nation prosper and thrive. Over the past seven decades, under the leadership of the Communist Party of China, the Chinese nation has achieved great leaps from gaining independence to realizing economic well-being and to becoming a great power after trials and tribulations, witnessing tremendous changes of historic significance in their motherland. Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core, thinking in big picture terms with a holistic view, has united and led the whole Party, military and Chinese people of all ethnic groups to solve long-standing and deep-seated problems and achieve a resounding success they have long aspired, boosting the accomplishment of historic progress in the causes of the Party and the state, and embracing a new era for socialism with Chinese characteristics. According to Administrator Pan Gongsheng, as the Chinese people are celebrating the 70th anniversary of the founding of the People's Republic of China, holding this simple but solemn ceremony to salute the national flag and wish the motherland all the best is a profound opportunity to educate officials and staff about patriotism and the Communist Party of China. Over the past 70 years, foreign exchange authorities have worked around the Party and the state, effectively allocating and harnessing foreign exchange resources, thus making great contributions to economic growth and national development at different periods of time. Since the 18th CPC National Congress, foreign exchange authorities have proactively served the new open economic system, and mitigated the heavy risks arising from cross-border capital flows, effectively ensuring China's economic and financial security in the complex and challenging environment. Under these circumstances, foreign exchange administration systems and regimes that are a good fit for comprehensive opening up and modernization of national governance systems and capabilities have been refined. As Pan Gongsheng stressed, foreign exchange authorities should unite more closely around the CPC Central Committee with Comrade Xi Jinping at its core, and guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, they should strengthen the "Four Consciousnesses", adhere to the "Four Confidences", and ensure the "Two Maintenances". Following the decisions and arrangements of the CPC Central Committee and the State Council, they should expand high-level opening-up, guard against risks arising from cross-border capital flows, and safeguard economic and financial security, so as to make greater contributions to the building of a moderately prosperous society in all aspects and the achievement of great victory of socialism with Chinese characteristics in the new era. Leaders of all departments of the SAFE and all officials and staff of the SAFE headquarters also attended the ceremony. (The end) 2019-09-30/en/2019/0930/1572.html
-
As shown in the statistics of the State Administration of ForeignExchange (SAFE), in September 2019, the amount of foreign exchange settlementand sales by banks was RMB 1150.2 billion (equivalent to USD 162.5 billion) andRMB 1174.5 billion (equivalent to USD 165.9 billion), respectively, with adeficit of RMB 24.3 billion (equivalent to USD 3.4 billion). In particular, theamount of foreign exchange settlement and sales by banks for customers was RMB 1024.1billionand RMB 1065.2 billion, respectively, with a deficit of RMB 41.2 billion; theamount of foreign exchange settlement and sales for banks themselves is RMB 126.1billion and RMB 109.3billion, respectively, with a settlement of RMB 16.8billion. During the period, newly signed contract amount of forward foreign exchangesettlement and sales was RMB 105.3 billion and RMB 66.9 billion, respectively,with a net newly signed contract amount of forward foreign exchange settlementof RMB 38.4 billion. At the end of September, outstanding amount of forward foreignexchange settlement and sales by the end of the current period was RMB 491.7billion and RMB 490.3 billion, respectively, with a net outstanding amount of forwardforeign exchange settlement of RMB 1.4 billion; the net Delta exposure ofoutstanding options was RMB -246.4billion. During January to September 2019, the accumulative amount of foreignexchange settlement and sales by banks was RMB 9483.9 billion (equivalent toUSD 1382.9 billion) and RMB 9813.2 billion (equivalent to USD 1431.1 billion),with an accumulative deficit of RMB 329.2 billion. In particular, theaccumulative amount of foreign exchange settlement and sales by banks forcustomers was RMB 8731.3 billion and RMB 8992.3 billion, respectively, with anaccumulative deficit of RMB 260.9 billion; the accumulative amount of foreignexchange settlement and sales for banks themselves was RMB 752.6 billion andRMB 820.9 billion, respectively, with an accumulative deficit of RMB 68.3billion. During the period, newly signed contract amount of forward foreign exchangesettlement and sales was RMB 1162.1 billion and RMB 441.8 billion,respectively, with a net newly signed contract amount of forward foreignexchange settlement of RMB 720.3 billion. In September 2019, the amount of cross-border receipts and payments by non-bankingsectors was RMB 2152.1 billion (equivalent to USD 304 billion) and RMB 2168.2billion (equivalent to USD 306.3 billion), respectively, with a deficit of RMB 16.1billion (equivalent to USD 2.3 billion). During January to September 2019, the amount of cross-border receiptsand payments by non-banking sectors was RMB 18032.8 billion (equivalent to USD 2631.5billion) and RMB 18023.1 billion (equivalent to USD 2628.9 billion),respectively, with a surplus of RMB 9.7 billion. Addendum:Glossary and relevant definitions Balance of payments(BOP) refers to all economic transactionsbetween residents and non-residents. Foreignexchange settlement and sales by banks refers to settlement and sale transaction that bank executes for customersand for the banks themselves, including statistic data onsettlements of forward contracts for foreign exchange settlementand sales and the exercises of option, and excludingthe transactions in the interbank foreign exchange market. The statistic reporting date of Foreign exchangesettlement and sales by banks should be the trade day of theForeignexchange settlement and sales transaction. By definition, foreignexchange settlement means foreign exchange holders sell foreignexchange to designated foreign exchange bank, and foreignexchange sales means designated bank sells foreign exchange to foreign exchange buyers. The net position of foreign exchange settlement andforeign exchange sales could be position squared throughtransactions on the inter-bank foreign exchange market, and it is one ofthe major contributors to the country’sforeign exchange reserve fluctuation, though it is not equal to netchange in foreign exchange reserves during the same period Unlikethe principle of balance-of-payments statistics, which cover the transactionsbetween residents and non-residents, foreign exchange settlement and sales bybanks only cover transactions of RMB and foreign currencies between banks and customers or on banks for themselves. Thenewly signed contract amount of forward foreign exchange settlement and sales refers to the binding forward contract between designated foreignexchange bank and client that predetermines foreign exchange currency, amount,exchange rate and tenor which to be executed upon maturity. Thenewly signed forward contract enables corporate to lock inadvance the exchange rate for the purchase or sale of a currency on a futuredate to manage relevant foreign exchange risk arising fromRMB volatility. In general, bank will hedge its foreign exchange risk exposures arise from the newly signed forward contract in the Interbank foreign exchange market. For example,when bank has net foreign exchange long position, bankwill short the equivalent amount of foreign exchange in the Interbank foreignexchange market in advance, or vice versa. Therefore, the newly signedcontract amount of forward foreign exchange settlement and sales is also one of contributors to China’s foreign exchange reserve fluctuation. Theunwind amount of forward foreign exchange settlement and sales refers to, where client is unable to perform the original forwardcontract due to change in its real demand, client to fully or partially closeits forward position by executing another deal with opposite direction to theoriginal contract. Therolling amount of forward foreign exchange settlement and sales refers to client to adjust the settlement date of original contract dueto change in its real demand. Theoutstanding amount of forward foreign exchange settlement and sales by the endof the current period refers to the total amount of forwardcontracts accumulated from all non-matured forward contracts with client. Thenewly signed contractamount and the outstanding amount should satisfy the equationthat: theoutstanding amount of forward foreign exchange settlement and sales by the endof the current period = theoutstanding amount of forward foreign exchange settlement and sales at the endof the previous period + the newly signed contract amount of forward foreignexchange settlement and sales for the period - settlements of forwardcontracts for foreign exchange settlement and sales for the period - the unwindamount of forward foreign exchange settlement and sales for the period. The net Deltaexposure of outstanding options refers to the implied foreignexchange spot risk exposure from outstanding option contracts that bank executedwith client. Bank shall hedge such risk in the foreign exchange market for risk management during deal life cycle. The cross-borderreceipts and payments bynon-banking sectors refers to the receipts andpayments between domestic non-banking sectors (including institutional and individual residents)and non-residentsthrough domestic banks, excluding receipts and payments in cash. In particular,the statisticsincludescross-border receipts and payments between non-banking sectors andnon-residents through domestic banks (including RMB and foreign currency), and domesticreceipts and payments between non-banking sectors and non-residents throughdomestic banks (temporarily excluding domestic receipts and payments in RMBbetween individual residents and non-resident individuals). Data are collected whencustomers conduct receipts and payments with non-resident counterparties atdomestic banks. Specifically, the receipts refer to the capitalof non-bankingsectors received fromnon-residents via domestic banks; the payments refer to the capitalof non-bankingsectors paid to non-residents via domestic banks. Thecross-border receipts and payments by non-banking sectors is based on cash basis,different from the accrual basis required by the Balance of Payments Statistics. The statisticsmerely reflects the cashflows between non-banking sectors and non-residents and does not include bartertransactions or transactions with non-residents conducted by the banksthemselves. Therefore,the scope of thestatistics is narrower than that of the Balance of Payments Statistics. 2019-10-25/en/2019/1025/1576.html
-
From 2020, State Administration of Foreign Exchange will no longer release "Direct investments in Financial Sector (time series)". The available data can be found in "The time-series data of Balance of Payments of China" and "The time-series data of International Investment Position of China". Direct investments in Financial Sector (time series)-in US dollar Direct investments in Financial Sector (time series)-in RMB 2019-11-15/en/2019/0816/1578.html
-
The State Administration of Foreign Exchange (SAFE) has recently released the data on banks' foreign exchange settlement and sales as well as their foreign-related receipts and payments for customers for August 2019. Wang Chunying, SAFE Press Spokesperson and Chief Accountant, answered relevant media questions. Q: Could you brief us on the changes in China's foreign exchange receipts and payments for August 2019? A: In this month, the deficit in banks' foreign exchange settlement and sales contracted and the foreign exchange market maintained a basic equilibrium between supply and demand. Despite a higher deficit in foreign-related receipts and payments recorded in the non-banking sector including individuals and enterprises, the foreign exchange market sustained a basic equilibrium between supply and demand, considering foreign exchange receipts and payments in the banking sector. On the one hand, the deficit in banks' foreign exchange settlement and sales shrank steadily, reaching a slight USD 5.4 billion in August, down by 12% month-on-month and 64% year-on-year. On the other hand, foreign exchange reserves stayed stable and hit USD 3.1072 trillion by the end of August, up by USD 3.5 billion month-on-month. Foreign exchange market expectations remained stable and foreign exchange supply and demand through major channels were steady and orderly. Market players' desire to settle foreign exchange was reinforced and their desire to sell foreign exchange remained stable. In August, the foreign exchange settlement ratio, measure of players' desire to settle foreign exchange, or the ratio of foreign exchange sold by customers to banks to their foreign-related foreign exchange receipts, stood at 73%, up by 6 percentage points month-on-month. The foreign exchange sales ratio, measure of players' desire to purchase foreign exchange, or the ratio of foreign exchange bought by customers from banks to their foreign-related foreign exchange payments, arrived at 69%, consistent with a month earlier. Under this context, trade in goods and direct investment remained as the major contributors to the surplus in foreign exchange settlement and sales for the month; enterprises' purchases of foreign exchange with ROI represented a seasonal decline; individuals' settlement of foreign exchange rose by 8% year-on-year and their purchases of foreign exchange fell by 17%. China's foreign exchange market remained stable, which was more obvious amid the complex and changing external environment. Despite more fluctuating external environment since the beginning of August, China's foreign exchange market was in a good order, and market players' trading behaviors were rational and orderly, indicating China's foreign exchange market was more mature and more adaptable to changes in external environment and also suggesting the significant support from China's economic fundamentals. Going forward, we will work to ensure the continuity and stability of China's foreign exchange administration policies, further liberalize and facilitate cross-border trade and investment, refine the management framework for cross-border capital flows that are aligned with a higher level of opening, so as to further solidify the foundation for stable performance of China's foreign exchange market. 2019-09-19/en/2019/0919/1567.html