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The State Administration of Foreign Exchange (SAFE) has recently released the data on banks' foreign exchange sales and settlement and their foreign exchange receipts and payments for customers for April 2017, and its spokesperson answered press questions on recent cross-border capital flows. Q: Since the beginning of this year, remarkable progress has been achieved in China's cross-border capital flows. Could you brief us on relevant performance for April? A: China's cross-border capital flows continued the good momentum for stable growth in April, with the highlights as follows: first, foreign exchange supply and demand found a better equilibrium. In the month, banks' foreign exchange settlement grew by 5% year on year while their foreign exchange sales fell by 2%, leading to a deficit of USD 14.9 billion, down by 37% year on year. The amount of contracts signed for forward settlement of foreign exchange went up by 81% year on year, while the amount of contracts signed for forward sales of foreign exchange dropped by 24%, leading to a surplus of USD 5.1 billion, compared with a deficit of USD 1.3 billion the same period last year. Due to the foreign exchange supply and demand factors such as spot and forward foreign exchange sales and settlement and stock options, the domestic supply and demand of foreign exchange continued the basic equilibrium in April, and generally outperformed those of March. Second, the non-banking sector registered a low deficit in foreign-related receipts and payments on a month-on-month basis. The deficit for April was USD 15.3 billion, down by 12% month on month. Specifically, the receipts and payments in RMB terms recorded a deficit of USD 10 billion, down by 11%; the receipts and payments in foreign exchange registered a deficit of USD 5.4 billion, down by 13%. In addition, the balance of China's foreign exchange reserves had grown for three consecutive months, as reflected in the balance of foreign exchange reserves as at the end of April that was released on May 7, and achieved a month-on-month increase of USD 20.4 billion in April. Domestic market participants registered stable foreign-related receipts and payments. First, market participants' foreign exchange settlement rate rose slightly and their foreign exchange purchase rate stayed stable. In April, the foreign exchange settlement via banks for customers as a percentage of the foreign-related foreign exchange receipts hit 63%, up by one percentage point against the first quarter; the share of foreign exchange purchases by customers in the foreign-related foreign exchange payments was 68%, consistent with that of the first quarter. Second, cross-border financing by enterprises continued to rise. As at the end of April, the balance of cross-border financing denominated in foreign currencies for imports such as refinancing and forward L/C rose by USD 2 billion month on month, representing growth for 14 consecutive months. Third, enterprises became more sensible in making ODI. Since the beginning of 2017, China's ODI has been further stabilized, with a higher proportion going to manufacturing, information transmission, software and IT services. Fourth, residents' purchases of foreign exchange dropped further. In April the figure went down either on a year-on-year or on a month-on-month basis and is now at its lowest level for one and a half years. Overall, China's economy has grown stably with a good momentum for development since the beginning of this year, and the growth pace has been further stabilized, indicating strong potential for future development. At the same time, the further opening up of the financial market has continued to produce positive results, solidifying the foundation for stable cross-border capital flows and balanced development. 2017-05-17/en/2017/0517/1267.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 first quarter of 2017, and its press spokesperson answered media questions on relevant issues. Q: Could you brief us on the balance of payments for the first quarter of 2017? A: The preliminary data in the Balance of Payments for the first quarter of 2017 present the following features: First, the surplus under the current account continues to remain in a reasonable range. In the first quarter of 2017, the current account registered a surplus of USD 19 billion, 0.7% of GDP. In particular, trade in goods in the Balance of Payments recorded a surplus of USD 81.7 billion, which fell on a year-on-year basis. But the imports and exports of goods have represented year-on-year increases for the first time since the second quarter of 2015, which were 12% and 23% respectively, indicating the strengthening of domestic and external demand has contributed to the stabilization of foreign trade. Trade in service recorded a deficit of USD 60.1 billion, up by 11% year on year, because the deficit under transportation driven by import growth rose by 34%, and the growth of travel deficit dropped to 5% versus the previous quarter. The primary income registered a surplus of USD 100 million alongside the increase in returns on investment, compared with a deficit of USD 4.1 billion for the same period of the previous year. Second, the deficit in the financial account excluding reserve assets (including net errors and omissions, same below) plummeted. In the first quarter, the financial account excluding reserve assets recorded a deficit of USD 21.5 billion, down by 87% year on year and quarter on quarter, of which, direct investment recorded net inflows of USD 11.4 billion. To be specific, ODI registered net outflows of USD 20.9 billion, down by 64% year on year and 43% quarter on quarter, suggesting market participants have become more reasonable in making outbound investments. FDI recorded net inflows of USD 32.4 billion, which remains at high level. Third, the BOP transactions have led to a slight decrease in reserve assets, with the margin shrinking remarkably. In the first quarter, due to the BOP transactions (excluding the impact from non-trading factors such as exchange rates and prices), China's reserve assets fell by USD 2.6 billion, which was 98% less on a year-on-year and quarter-on-quarter basis. To be specific, foreign exchange reserves dropped by USD 2.5 billion and its reserve position in the IMF decreased by USD 100 million. Overall, China's BOP sustained a basic equilibrium in the first quarter, suggesting that alongside the advancement of the structural reform, economic growth has been increasingly stable, and the fundamentals for China's BOP are good. 2017-05-08/en/2017/0508/1265.html
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Q: The latest data on foreign exchange reserves released by the People's Bank of China (PBC) show that China's foreign exchange reserves as at the end of April 2017 rose by USD 20.4 billion month on month. Could you tell us why the change occurred? A: As at the end of April 30, 2017, China's foreign exchange reserves amounted to USD 3.0295 trillion, rising by a slight USD 20.4 billion or 0.7% month on month. This is the third consecutive month that China's foreign exchange reserves have increased. In April, China's cross-border capital flows continued to find an equilibrium, featuring a basic balance between foreign exchange supply and demand. In the global financial markets, the non-USD currencies appreciated against the USD, with the asset prices picking up. Under the combined impact of these factors, foreign exchange reserves have rebounded. Since the beginning of 2017, China's macro-economic performance has continued to make progress while maintaining stability, with good momentum for growth. The economic growth has recovered slightly, hitting 6.9% in the first quarter, up by 0.1 percentage point quarter on quarter. Other economic indicators all recovered to some extent. As the global economy continues to recover slowly, the global financial markets have performed stably, the RMB exchange rate has stayed stable, and cross-border capital flows and the supply and demand in the foreign exchange markets are basically balanced. Driven by this, enterprises have become more reasonable in buying foreign exchange and their desire to settle foreign exchange has been strengthened. Going forward, as China's supply-side structural reform is deepened, China's economic fundamentals will continue to exhibit a good momentum for growth, the expectations of the RMB exchange rate will stay stable, and cross-border capital flows will develop towards an equilibrium, all of which will boost China's foreign exchange reserves towards further stability. 2017-05-07/en/2017/0507/1264.html
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Q: The latest foreign exchange reserves data released by the People's Bank of China show that China's foreign exchange reserves for June 2017 went up by USD 3.2 billion month on month. Could you explain why such a change occurs? A: As at the end of June, China's foreign exchange reserves amounted to USD 3.0568 trillion, up by USD 3.2 billion or 0.11% month on month, representing an increase for the fifth consecutive month. China's cross-border capital flows sustained stable growth in June, indicating a relative equilibrium between supply and demand of foreign exchange. In the global markets, non-USD currencies appreciated against the US dollar, asset prices fluctuated slightly, the currencies and assets invested with foreign exchange reserves diverged, and foreign exchange reserves rose by a small margin. In the first half of this year, China's cross-border capital flows and the supply-demand of the foreign exchange market remained balanced, the RMB exchange rate rose steadily and foreign exchange reserves rose by USD 46.3 billion or 1.5% from USD 3.0105 trillion of the beginning of this year. Looking ahead, China's economic stabilities and certainties will be strengthened. In terms of industry support, development motives, confidence and environment, China's economic performance will remain stable with the good momentum for growth. Alongside further liberalization of the financial market, healthy development of the foreign exchange market, stable market expectations, and the basic equilibrium of cross-border capital flows and the supply-demand of the foreign exchange market, foreign exchange reserves will sustain stability. 2017-07-07/en/2017/0707/1271.html
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The Brazil-China Cooperation Fund for the Expansion of Productive Capacity (China-Brazil Fund) was officially launched on 30 May 2017 local time in So Paulo, Brazil. China-Latin America Production Capacity Cooperation and Investment Fund Co., Ltd. (China-Latin America Production Capacity Fund) signed the fund establishment documents with the Brazilian Ministry of Planning, Budget and Management (Brazilian Ministry of Planning). The China-Brazil Fund Steering Committee held its first meeting, deliberating and adopting the China-Brazil Fund Operating Procedures, thus officially kick-starting the China-Brazil Fund. Pan Gongsheng, Deputy Governor of the People's Bank of China and Administrator of the State Administration of Foreign Exchange, Li Jinzhang, Ambassador of China to Brazil, and Dyogo Oliveira, Brazilian Minister of Planning, were present at the ceremony. The official launch of the China-Brazil Fund, established based on the consensus between the heads of state of both countries, is a key measure of the China-Latin America Production Capacity Fund to implement China's Belt and Road Initiative and going global strategy, and will be favorable for both sides to carry out production capacity cooperation and seek mutual benefit. Next, the China-Brazil Fund will focus on boosting strategic cooperation between China and Brazil and robust operation of the Fund, based on the market-oriented operation mechanism. 2017-06-02/en/2017/0602/1270.html
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FILE: Annual Report of the State Administration of Foreign Exchange (2003) 2004-07-26/en/2004/0726/1272.html
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FILE: Annual Report of the State Administration of Foreign Exchange (2004) 2005-07-25/en/2005/0725/1273.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange settlement and sales as well as their foreign-related receipts and payments for customers for September 2017. Its press spokesperson answered media questions on relevant issues. Q 1: Could you brief us on the characteristics of China's cross-border capital flows in the first three quarters of this year? A: China's cross-border capital flows found an equilibrium in the first three quarters, and the supply and demand of foreign exchange has been balanced recently. The main characteristics are as follows: First, the deficits in banks' settlement and sales of foreign exchange and in their foreign-related receipts and payment contracted significantly. In the first three quarters, the deficit in banks' settlement and sales was USD 112.9 billion, down by 54% year on year, versus a deficit of USD 3.8 billion in August, and a surplus of USD 300 million in September. In the same period, banks' foreign-related receipts and payments for customers recorded a deficit of USD 111.5 billion, down by 56% year on year, compared with a deficit of USD 3.5 billion in August, and a further deficit of USD 1.7 billion in September. Second, the sales rate of foreign exchange plummeted on a year-on-year basis and corporate demand for foreign exchange financing was on the rise. In the first three quarters, the foreign exchange sales rate that measures the motives of companies for purchasing foreign exchange, or the ratio of customers' purchase of foreign exchange from banks to customers' foreign-related foreign exchange payments, reached 66%, down by eight percentage points year on year. In particular, the rate was 68%, 67% and 63% in the first, second and third quarters respectively, suggesting companies are more sensible in buying foreign exchange, and have conducted foreign exchange financing based on demand, with their purchases of foreign exchange to service debt becoming a rarer case. The domestic outstanding foreign exchange loans by the end of September dropped slightly from the end of the previous year, and went down by more than USD 70 billion year on year. Third, the sales settlement rate rose on a year-on-year basis while maintaining stability, and companies' and individuals' desire to hold foreign exchange was weakened. In the first three quarters, the sales settlement rate that measures the desire to settle foreign exchange, or the ratio of customers' sales of foreign exchange to banks to customers' foreign-related foreign exchange receipts was 63%, up by two percentage points year on year. The ratio was 62%, 63% and 64% in the first, second and third quarters respectively. As for companies' domestic foreign exchange deposits, the balance rose by nearly USD 40 billion in the first quarter, compared with an increase of USD 9 billion in the second quarter and a decrease of USD 25.3 billion in the third quarter. According to the individuals' domestic foreign exchange deposits, the balance rose slightly by USD 300 million in the first quarter, versus a deficit of USD 2 billion in the second and third quarters respectively, indicating a weaker desire to hold foreign exchange among domestic market participants, and a rise in using self-owned foreign exchange in making external payments. Fourth, banks' forward foreign exchange sales and settlement recorded a surplus. In the first three quarters, the value of foreign exchange contracted for forward settlement by banks for customers grew 1.2 times year on year, while that of foreign exchange contracted for forward sales dropped by 5%, leading to a surplus of USD 7.7 billion, compared with a deficit of USD 58.1 billion for the same period last year, indicating markedly weaker expectations of RMB depreciation, and the demand for forward foreign exchange settlement and sales was adjusted. Fifth, the foreign exchange market recorded a basic equilibrium between supply and demand, boosting the balance of foreign exchange reserves to rise continuously. As at the end of September, China's balance of foreign exchange reserves hit USD 3.1085 trillion, up by USD 98 billion from the end of 2016. In particular, the balance of foreign exchange reserves went up for eight consecutive months from February to September. Q2: Could you explain why China's cross-border capital flows have been further balanced recently? What would you say about the prospects? A: China's cross-border capital flows have been increasingly balanced since the beginning of this year, which indicates the developments and changes in the economic and financial environment both at home and abroad. Firstly, China, perseverant in implementing new development concepts in building its economy, deepens the supply-side structural reform, enhances the quality and benefits of developments, and optimizes its economic structure, leading to an obvious trend of more stable economy with a good momentum for growth and stronger internal foundation. Specifically, the new open economic system has been refined, the reform and opening up measures in the financial market have been implemented and the equilibrium of cross-border capital flows has been boosted, including the optimization and improvement of the RMB exchange rate market formation mechanism, introduction of a series of policies for fueling the growth of foreign-owned enterprises, the official launch of the Bond Connect between mainland China and Hong Kong, as well as the inclusion of A shares in the MSCI Emerging Markets index. Secondly, the global economy continues to recover, and the financial markets have been less fluctuating, suggesting a stable external environment. The latest projections from the International Monetary Fund (IMF) show that the global economy will grow at a rate of 3.6% in 2017, 0.4 percentage point faster than in 2016. Moreover, although the FED has raised the interest rates for two times thus far and plans to shrink the balance sheet, market expectations are stable, and the USD exchange rates have been depreciating since the beginning of this year. Going forward, China's cross-border capital flows will continue to stay stable, which is supported by three fundamentals. Firstly, the economic fundamentals will be stronger. Since the beginning of this year, international organizations have revised upward their projections of China's economy for 2017 many times. The IMF, for example, increased its expectations from 6.5% that was projected at the beginning of this year to the current 6.8%, and the World Bank, from 6.5% to 6.7%, denoting the international community is more optimistic about China's economy. China will continue to implement the new development concepts and build a modern economic system to boost the sustained and healthy development of the economy. Secondly, the policy fundamentals will provide guarantee. China will participate more in and boost economic globalization and developed a higher-level open economy. On the one hand, along with the improving business environment in China and the implementation of opening up policies, foreign capital inflows will continue to stay stable. On the other hand, the domestic bond and stock markets will cement their ties with global markets and relevant facilitation measures will be introduced, which will be helpful to promote overseas investors to invest in the domestic capital market. Thirdly, the market fundamentals will be strengthened. The enhancement of the RMB exchange rate formation mechanism, further diversified market participants, and weaker expectations of one-way sustained appreciation and depreciation will help to curb the significant fluctuations of cross-border capital and ensure the overall equilibrium between supply and demand of foreign exchange. The above fundamentals will continue to play a fundamental role in the future. In particular, after the success of the 19th CPC National Congress, China will secure a decisive victory in building a moderately prosperous society to achieve its first centennial goals and open up a new chapter to build a modern socialist country with Chinese characteristics to move on to achieve its second centennial goals. Under such circumstances, there surely will be a stronger confidence in the long-term economic and social development of China in both domestic and overseas markets, and a more solid foundation for stable cross-border capital flows in China. Q3: What impact will the Fed's shrinking of the balance sheet on China's cross-border capital flows? A: The Fed's interest rate hikes and shrinking of the balance sheet will not fundamentally shake the stability of China's cross-border capital flows. Since the Fed's first interest rate hiked at the end of 2015, China has witnessed a process from outflows to equilibrium in its cross-border capital flows. The main causes are: First, a gradual process will remain as the main characteristics of the Fed's boost to the normalization of its monetary policy. Since the Fed began to raise the interest rates, the gradual process has proved to have weakened the impact on the markets. After the September FOMC meeting, the chair of the Fed stressed in answering media questions that "the balance sheet will be shrunk in a gradual and predictable process". As a matter of fact, this accords with the economic and financial performance in the US. Given that the US' long-term economic growth prospects remain weak, an in-depth analysis shall be required on the impact of the Fed's monetary policy adjustment on its economy; the US' inflation has been low with fluctuations recently; and the rapid growth in the US' asset prices in recent years has drawn wide concern in the market that the fast adjustment of the Fed's monetary policy will prick the asset bubble. Second, the US' interest rates and exchange rates are exposed to more diversified factors, including the Fed's monetary policy adjustment. As for interest rates, after the first interest rate hike at the end of 2015, the Federal Funds rate rose by one percentage point overnight, but the longer-term interest rates have grown in a descending order, indicating market interest rate will also be impacted by the long-term prospects of economic growth. As for foreign exchange rates, there are complex contributing factors, such as the US economic performance, and the economic and financial conditions in other major economics, in addition to the Fed's monetary policy. For example, during the Fed's balance sheet expansion, the USD exchange rate did not fall continuously, but featured two-way fluctuations; but since the beginning of this year, the Fed has raised interest rates for two times, but the USD exchange rate has depreciated. Third, China has been stronger in adapting and responding to the changes in external environment. Firstly, China still has various fundamental advantages, such as relatively higher economic growth, a stable big picture, robust financial market, surplus under the current account, and adequate foreign exchange reserves. Secondly, China's ability to make response has been strengthened, such as a more remarkable momentum for growth in China's economy while maintaining stability, further opening up of domestic markets, enhanced RMB exchange rate formation mechanism, and more sensible investing and financing activities among market participants. Q4: Since the beginning of this year, China has witnessed strengthened elasticity in two-way fluctuations of the RMB exchange rate. Do you have any ideas on hedging against exchange rate risk? Will the SAFE enhance relevant education and training? A: As the RMB exchange rate is increasingly volatile, exchange rate risk management is more crucial to companies' production and operation. But some domestic enterprises have to raise their awareness of hedging against exchange rate risks: firstly, exchange rate risk shall be looked at in an objective manner. Some enterprises lack the concept of risk neutrality, and are used to betting on unilateral direction such as appreciation or depreciation, thus replacing precise risk management with subjective market judgment. Secondly, an accurate understanding of hedging shall be developed. Some enterprises are reluctant to pay for hedging, or use hedging as a profit tool, neglecting its essential function of risk aversion by locking up the impact of exchange rate uncertainties on companies' profits from primary business. The SAFE will continue to guide the market to accurately understand exchange rate risk and improve exchange rate risk management. Firstly, boosting the in-depth development of the foreign exchange market by supporting financial institutions to make innovations to serve the real economy and foreign exchange products that adapt to the market demand. Secondly, guiding banks in prudential operations and urging banks to ensure customer risk education and management. Thirdly, guiding enterprises to build an accurate awareness of exchange rate risk, develop an accurate understanding of exchange rate risk aversion instruments, and hedge exchange rate exposure, avoiding deviation from principal business and reality. Our experience and recommendation of corporate exchange rate hedging: enterprises shall adapt to the normal of two-way fluctuations of RMB exchange rate, change the uncertainties into certainties of two-way fluctuations through hedging, with a focus on primary business; enterprises shall understand their transactions, valuate derivatives before transaction and decide on the level of risk restriction; enterprises shall also engage in proper hedging, regarding derivative deals as the instruments to lock up risks rather than a way to make money. For enterprises, hedging against foreign exchange rate risk through RMB foreign exchange derivatives requires continuous education on risks to investors, and also is a process of learning from doing and accumulation. Q5: As China's cross-border capital flows are being stabilized with a good momentum, what changes will take place to the orientation of policies for foreign exchange administration? A: Going forward, foreign exchange authorities will get united around the CPC Central Committee with Comrade Xi Jinping at its core and implement the gist of the 19th CPC National Congress. They will support the unified leadership of the CPC Central Committee on finance and carry out the decisions and plans of the CPC Central Committee and the State Council. With a focus on serving the real economy, guarding against financial risks and deepening financial reform, they will strive to enhance cross-border trade and investment facilitation, boost sustained and healthy economic development, guard against cross-border capital flow risks, and safeguard China's economic and financial security, so as to make great contribution to the fulfillment of the two centennial goals and the realization of the Chinese dream of the great renewal of the Chinese nation. Two basic principles shall be adhered to in foreign exchange administration: first, foreign exchange administration shall serve the real economy and the reform and opening up, and support and boost the two-way liberalization of the financial market to enhance trade and investment facilitation. Second, efforts shall be made to guard against risks arising from cross-border capital flows, protect the macro-economy and financial stability from being impacted by disorderly and high-intensity cross-border capital flows and maintain the stability of the foreign exchange market, in a bid to create a healthy, benign, and stable foreign exchange market environment for reform and opening up. Four basic connotations shall be stressed on the orientation of policies: first, adhering to reform and opening up and refining the foreign exchange administration framework to further promote trade and investment facilitation and ramp up the efficiency and level of foreign exchange administration in serving the real economy. Second, stably realizing capital account convertibility to drive reform and opening up in finance in an active and prudent way. Third, establishing a macro-prudential administration and micro market regulation system for cross-border capital flows, and cracking down on foreign exchange irregularities to maintain China's financial stability and economic security. Fourth, refining the RMB exchange rate formation mechanism to drive the in-depth development of the foreign exchange market. Efforts shall be made to preserve and grow the value of foreign exchange reserves while ensuring the security and liquidity of foreign exchange reserves. 2017-10-19/en/2017/1019/1377.html
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On the afternoon of September 28, 2017, the Theory Study Central Team of the CPC Leadership of the State Administration of Foreign Exchange (SAFE) got the opportunity of celebrating the 80th anniversary since On Practice and On Contradiction were published to organize the study on philosophy and its use, along with the implementation of the gist of the National Financial Work Conference and of the speech delivered by Secretary General Xi Jinping on July 26, as well as his remarks on Party governance based on systems and regulations and intra-Party regulations and systems. At the study, which was chaired by Pan Gongsheng, Secretary of the CPC Leadership and Administrator of the SAFE, members of the CPC Leadership had in-depth discussions and exchanges concerning foreign exchange administration and thinking. Attendees of the study included officials from relevant departments of the SAFE Head Office. At the study, comprehensive and in-depth learning and discussions were held on the theoretical contributions and contemporary value of Marxist philosophy against the background of the production of On Practice and On Contradiction. The CPC Leadership of the SAFE believes that On Practice and On Contradiction by Mao Zedong are great accomplishments based on China's revolution and traditional philosophy, provide a significant philosophical basis for Marxist philosophy with Chinese characteristics, and help CPC members build a scientific worldview and methodology, playing a significant part in the history of Chinese revolution, or even in the history of the CPC, and therefore will serve a guiding role in building a socialist economy with Chinese characteristics. Since the 18th National Congress of the Communist Party of China, the CPC Central Committee with Comrade Xi Jinping at its core has focused on pressing ahead with the supply-side structural reform, and enriched and refined the new concepts, ideas and strategies on governing China, achieving remarkable progress that is of great practical and historical importance in reform, development, and stability, internal politics, diplomacy and national defense, and governance of the CPC, the country and its military forces, and making breakthroughs in reforms in key areas and links. These new practices that integrate Marxism with China's reality give a full display of the strong vitality of On Practice and On Contradiction in modern times. The SAFE's CPC Leadership stresses that CPC organizations and leaders at various levels develop a full understanding of the practical significance of studying philosophy and its use, and study classics such as On Practice and On Contradiction, to raise their awareness, sum up experience and make innovations. They shall have an in-depth understanding of the theoretical principles of Marxist epistemology and material dialectics, and of the underlying meanings of "seeking truth from facts"," proceeding from reality in all things we do", "no investigation, no right to speak", and "analysis of contradictions", to base their beliefs and convictions on the rational recognition of sciences and theories. They shall also have a profound knowledge of the rationales, basic views and methodology of Marxist philosophy, and further their understanding and grasp of the gist of important speeches by Secretary General Xi Jinping and the stance, views and methodology of Marxism laid out in the new philosophy, thinking and strategies on state governance by the CPC Central Committee. By following the experience of integrating Marxism with China's reality, they shall study and use philosophy, become more conscious of emancipating their minds and seeking truth from facts, and more ready to do things with critical thinking, and integrate Marxist stances, views and methodology with the theories, directions, guidelines and policies of the CPC and implement them in foreign exchange administration. They shall study and implement the gist of the National Financial Work Conference and understand the accomplishments in financial reform and developments in China. With a focus on "serving the real economy, guarding against financial risks and deepening financial reform", they shall analyze and understand the current economic and financial conditions, capture the principal contradictions and principal aspects of contradictions in social and economic developments, and strengthen critical and strategic thinking, to adapt to the new normal of foreign exchange administration and be poised for the upcoming 19th National Congress of the Communist Party of China with excellent performance. As emphasized by the CPC Leadership of the SAFE, the remarks of Secretary General Xi Jinping on Party governance based on systems and regulations address major issues regarding the building of intra-Party regulations and systems under the new circumstances, and show the progress of the building of intra-Party regulations and systems, key measures adopted, accomplishments already made and fresh experience accumulated by the CPC Central Committee with Comrade Xi Jinping at its core. These remarks enrich and develop the Marxist theory of Party building and provide a significant reference for enhancing the building of intra-Party regulations and systems. Party organizations of the SAFE at various levels and all Party members shall develop a comprehensive and systematic understanding of the thoughts of Xi Jinping on governing the CPC based on systems and regulations, and of the significant impact of intra-Party regulations and systems on governing the CPC based on systems and regulations, enhance the study and promotion of intra-Party regulations and systems, and boost the effective implementation of intra-Party regulations and systems so as to deepen the comprehensive and strict governance of the CPC. According to Pan Gongsheng, in the run-up to the 19th National Congress of the Communist Party of China, foreign exchange authorities shall act in strict compliance with the political discipline and norms, and raise the "four awareness" to become highly aligned with the CPC Central Committee with Comrade Xi Jinping at its core in thoughts, politics and action, and firmly uphold the authority of the CPC Central Committee. They shall intensify monitoring and analysis of foreign exchange markets and cross-border capital flows to maintain the stable performance of foreign exchange markets. They shall also keep strict confidentiality, ensure national security, and pay attention to safe production to safeguard stable operation of all business systems for foreign exchange. They shall pay close attention to market expectation management to effectively keep market confidence stable. Persistent efforts shall be made to clean up undesirable work styles, uphold integrity, combat corruption, and keep alert to corruption. The leaders shall strictly perform their responsibilities in shift work and leading teams on different shifts, to ensure efficient operation of the emergency mechanism. Moreover, a prior plan shall be made to get well prepared for the in-depth study and implementation of the gist of the 19th National Congress of the Communist Party of China. 2017-09-29/en/2017/0929/1335.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange sales and settlements and banks' foreign-related payments and receipts for customers for November 2017, and its press spokesperson answered media questions on recent cross-border capital flows. Q: Could you brief us on China's cross-border capital flows for November? A: China's foreign exchange market continued to see equilibrium between supply and demand in November. According to the foreign exchange reserves data released on December 7, the balance of foreign exchange reserves as at the end of November amounted to USD 3.1193 trillion, up by USD 10.1 billion month on month, recovering for 10 consecutive months, primarily due to the basic equilibrium between domestic demand and supply of foreign exchange. As for the composition of the demand and supply of foreign exchange, a deficit of USD 7.5 billion was recorded in foreign exchange sales and settlements in November. On the other hand, to mitigate risks and preserve value, enterprises' net sales of foreign exchange in RMB-foreign exchange derivatives markets including forwards and options rose in the month, leading to a decrease of USD 4.1 billion in foreign exchange position of banks for the month, hence increasing the supply of foreign exchange. With other factors taken into consideration, the supply and demand of foreign exchange in China found a basic equilibrium in the month. In addition, foreign-related receipts and payments of non-banking sectors such as companies and individuals registered a deficit of USD 12.9 billion for the month, of which, the receipts and payments of foreign exchange were relatively balanced with a small deficit of USD 1.4 billion. Cross-border capital flows through major channels were stable and reasonable. First, the willingness of market participants to settle foreign exchange was strengthened while their desire to purchase foreign exchange was weakened. In November, the ratio of foreign exchange settlement by bank customers to foreign-related foreign exchange receipts reached 61.0%, up by 5.4 percentage points year on year; the ratio of foreign exchange purchases by bank customers to foreign-related foreign exchange payments was 62.7%, down by 9.5 percentage points year on year. Second, foreign exchange sales and settlement under trade in goods remained in surplus and capital inflows and foreign exchange settlement under FDI climbed. In November, foreign exchange sales and settlements under trade in goods of banks for customers recorded a surplus of USD 15.7 billion, up by 29% year on year; foreign exchange capital settlement under FDI almost doubled on a year-on-year basis. Third, foreign exchange purchased by individuals continued to fall stably. In November, foreign exchange purchased by individuals plummeted by 44% year on year and was 15% lower than the monthly average of January-October 2017, indicating a low level in recent years. China's economy continued to perform stably with good momentum for growth, providing a fundamental guarantee for stable cross-border capital flows. In November, foreign demand continued to be strengthened and domestic demand remained robust, driving USD-denominated exports to rise by 12% year on year, a sub-high since the beginning of this year; and China's imports grew by 18%; official PMI was 51.8, up by 0.2 percentage point month on month, falling within the expansion range for 16 straight months. Following the general work guideline of making progress while maintaining stability and the new concept for development, China will focus on the supply-side structural reform going forward, pressing ahead with the efforts of stabilizing growth, promoting reform, adjusting structure, benefiting the public and guarding against risks, with the aim of boosting the sustainable and healthy development of the economy and society and laying a solid foundation for the basic equilibrium of China's balance of payments in the medium and long term. 2017-12-18/en/2017/1218/1387.html