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The State Administration of Foreign Exchange (SAFE) has recently released the Balance of Payments (BOP) and International Investment Position (IIP) for the first quarter of 2018. Its press spokesperson answered media questions on relevant issues. Q: Could you brief us on China's balance of payments for the first quarter of 2018? A: China's BOP found an adaptive equilibrium in the first quarter of 2018. The financial account excluding reserve assets was in surplus, the receipts and payments under the current account were further balanced and reserve assets rose. The financial account excluding reserve assets registered a higher surplus. In the first quarter, the financial account excluding reserve assets recorded a surplus of USD 98.9 billion, growing 1.7-fold year on year. On the one hand, outbound investments stayed stable. In the quarter, the external financial assets arising from BOP transactions jumped by USD 72 billion net, up by 32% year on year. Specifically, ODI went up by USD 17.9 billion net, external securities investment rose by USD 33.5 billion net, and other investments such as external deposits and loans increased by USD 20.8 billion net. On the other hand, overseas investors continued to increase investments in China. In the quarter, external liabilities grew by USD 170.9 billion net. To be specific, FDI grew by USD 73 billion net, securities investment in China rose by USD 43.8 billion net; and other investments in China such as non-resident deposits attracted and overseas loans obtained jumped by USD 54.4 billion net. The receipts and payments under the current account were further balanced. In the first quarter, the current account registered a deficit of USD 34.1 billion. The surplus under trade in goods shrank as imports outpaced exports. Driven by the higher deficit under transportation and travel, trade in services recorded an increased deficit. The balance of the current account contributed -1.1% to China's GDP, which was within the reasonable range though. Reserve assets rose. In the first quarter, China witnessed an increase of USD 26.2 billion in reserve assets as a result of BOP transactions (excluding non-trading factors such as foreign exchange rates and prices), versus a decrease of USD 2.6 billion a year earlier. In particular, foreign exchange reserves went up by USD 26.6 billion and its reserve position in the IMF decreased by USD 400 million. Q: What would you say about China's international investment position for March 2018? A: As at the end of March, China's international investment position remained robust, with external assets and liabilities rising from a year earlier. China recorded USD 1.5725 trillion in net external assets as at the end of March. To be specific, China's external assets amounted to USD 7.0252 trillion and its external liabilities hit USD 5.4527 trillion, up by 1.4% and 6.7% quarter on quarter respectively (same below). External assets went up. Specifically, direct investment assets rose by USD 24.5 billion or 1.7%; securities investments picked up by USD 17.3 billion or 3.5%; financial derivative assets perked up by USD 1.8 billion or 30.1%; other investment assets climbed by USD 51.5 billion or 3.0%; and reserve assets increased by USD 4.4 billion or 0.1%. External liabilities rose. Direct investment liabilities rose by USD 165.5 billion or 5.7%, owing to higher direct investments of foreign investors in the Chinese market, as well as foreign exchange rate conversion along with RMB appreciation; securities investment liabilities increased by USD 109.6 billion or 10.5%, as a result that foreign investors increased their holding of securities issued by China domestically and globally, as well as of value reassessment; financial derivative liabilities grew by USD 700 million or 20.4%; and other investment liabilities went up by USD 65.3 billion or 5.6%. Looking at the items, we found from external assets that direct investment assets reached USD 1.4974 trillion, 21% of total assets; securities investment assets amounted to USD 514.5 billion, 7% of total assets; financial derivative assets were USD 7.8 billion, 0.1% of total assets; other investment assets reached USD 1.7652 trillion, 25% of total assets; and reserve assets hit USD 3.2403 trillion, 46% of total assets. Of external liabilities, direct investment liabilities hit USD 3.0670 trillion, 56% of total liabilities, making it No. 1 in external liabilities; securities investment liabilities reached USD 1.1535 trillion, 21% of total liabilities; financial derivative liabilities were USD 4.1 billion, 0.1% of total liabilities; and other investment liabilities amounted to USD 1.2281 trillion, 23% of total liabilities. 2018-06-29/en/2018/0709/1444.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange settlement and sales and banks' foreign-related receipts and payments for customers for April 2018. 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 April 2018? A: China's foreign exchange market remained stable in April. First, banks recorded a surplus of USD 10.6 billion in their foreign exchange settlement and sales in the month, and an accumulated deficit of USD 7.6 billion for January to April, indicating a relative equilibrium in the supply and demand in the foreign exchange market. Second, non-banking sectors such as enterprises registered a deficit of USD 9.9 billion in foreign-related receipts and payments in the month, and an accumulated surplus of USD 800 million for January to April, suggesting relevant market participants have maintained balanced cross-border capital flows in the year to date. In particular, a surplus of USD 900 million was recorded in foreign-related foreign exchange receipts and payments in the month. Third, the balance of China's foreign exchange reserves declined in the month, due to foreign exchange rate conversion and asset price correction. All these showed that the foreign exchange market has been operated stably. Major items on the supply and demand in the foreign exchange market presented a momentum for stable and orderly growth. First, trade in goods remained a major supply item of foreign exchange. The non-banking sectors like enterprises reported a surplus of USD 30.6 billion in foreign exchange settlement and sales under trade in goods in April, up by 84% month on month, which was generally aligned with the balance of foreign trade reported by the Customs and its movement trends. Second, a basic balance with slight earnings was registered in foreign exchange settlement and sales under the capital and financial account. In the month, the non-banking sectors recorded a surplus of USD 2.3 billion in foreign exchange settlement and sales under the capital and financial account, down by 42% month on month. Third, the deficit in foreign exchange settlement and sales under trade in services for enterprises and individuals dropped slightly but stably. In the month, the deficit was USD 17.8 billion, down by 19% month on month and by a slight 2% year on year. Foreign exchange purchases by individuals stayed steady. In the month, the amount of the contracts signed for forward foreign exchange settlement and sales rose by 1.6 and 3.1 times year on year respectively, leading to a surplus of USD 5 billion, indicating risk aversion associated with foreign exchange rate was remarkably strengthened under the impact of two-way fluctuations of the RMB exchange rate. Since the beginning of April, the global financial markets have witnessed heightened volatility. The USD exchange rate and interest rate were strengthened, emerging markets were under heavier pressure from capital outflows and currency depreciation, but China's cross-border capital flows stayed steady, indicating China's economic fundamentals have played a fundamental role in stabilizing the expectations of the foreign exchange market. Going forward, as China's economy continues to perform stably, China's foreign exchange market will adapt better to the changes in external environment and continue with the rational and balanced landscape of cross-border capital flows. 2018-05-18/en/2018/0613/1439.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange settlement and sales and banks' foreign-related receipts and payments for customers for May 2018. 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 May 2018? A: China's cross-border capital flows stay stable currently. In May, banks registered a surplus of USD 19.4 billion in foreign exchange settlement and sales, as a result that companies and individuals adjusted their domestic assets in RMB and foreign currencies as expectations of foreign exchange remained stable. The non-banking sector like domestic companies posted a deficit of USD 7.4 billion in foreign-related receipts and payments, 26% lower than that of April, while foreign-related foreign exchange receipts and payments recorded a surplus of USD 2.6 billion, which was relatively balanced. The balance of foreign exchange reserves fell by USD 14.2 billion in May, owing to the combined impact of depreciation of the non-USD currencies against the US dollars and higher asset prices. The domestic foreign exchange market continued stable operation. Cross-border capital flows through major channels grew stably and remained balanced. On the one hand, trade in goods remained as the major channel for net cross-border capital inflows and foreign exchange supply. In May, banks' foreign-related receipts and payments under trade in goods for customers (customs coverage) was in surplus and picked up by 42% month on month; banks' foreign exchange settlement and sales under trade in goods for customers was also in surplus and climbed by 32% month on month. The foreign-related receipts and payments and foreign exchange settlement and sales under direct investment and portfolio investment of domestic non-banking sector such as domestic companies remained in surplus. On the other hand, due to seasonal factors, companies' purchases of foreign exchange under returns of investment and individuals' purchases of foreign exchange both rose. In May, foreign exchange purchased under ROI neared USD 7 billion, up by 98% month on month; and foreign exchange purchased by individuals perked up by a slight 2% month on month but fell by 10% year on year. Moreover, as companies' risk aversion associated with foreign exchange rates became stronger, the amounts of the contracts signed for forward foreign exchange settlement and sales grew by 5% and 22% month on month respectively, or rose 1.3-fold and twice year on year. Banks' forward foreign exchange settlements and sales recorded a surplus of USD 1.7 billion, suggesting companies' overall expectations of foreign exchange rates remained stable. The global financial markets have continued to be volatile since May, with some emerging economies struggling with capital outflows and currency depreciation. Nevertheless, China's economy has stayed stable with a strong momentum for growth. The market expectations have been stabilized and changes in external environment have been dealt with, providing a fundamental guarantee for the stable operation of China's foreign exchange market. 2018-06-19/en/2018/0709/1443.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated China's external debt data as at the end of March 2018, and an official from the SAFE answered media questions on recent situations of China's external debt. Q: Could you brief us on China's external debt for the first quarter of 2018? A: China's external debt continued rising in the first quarter of 2018. As at the end of March 2018, China's full-scale outstanding external debt registered USD 1.8435 trillion (in both domestic and foreign currencies), up by USD 132.9 billion or 7.8% quarter on quarter, primarily driven by the increases in currencies and deposits as well as debt securities. To be specific, the increases in currencies and deposits contributed 36% of the growth in total external debt, owing to the increased deposits of foreign non-resident institutions and individuals in domestic banks; the rise in debt securities accounted for 34% of the growth in total external debt, attributable to the strong interest of foreign non-resident institutions in investing in China's bond market. Q: What would you say about China's foreign debt situations? A: Overall, the rise in China's foreign external debt mirrored China's economic growth and wider opening up. First, China's economy got off to a good start in the first quarter. Its GDP grew by 6.8% year on year and foreign trade, 9.4% year on year, indicating the quality and benefits of China's economic growth have been improving, thus laying a foundation for the continued increase in its external debt. Second, as the domestic bond market has been further liberalized, coupled with the good performance of China's bond market in the year to date, foreign institutional investors have become enthusiastic for buying more RMB bonds in the Chinese market, and nearly 80% of them invested in medium and long-term bonds. As a result, the share of debt securities in full-scale external debt rose from 8% at the end of 2014 to 21% at the end of March, which has become the new growth driver of China's external debt, and also shows foreign investors' solid confidence in China's economy. Next, the SAFE will keep a keen eye on the changes in domestic and international conditions, improve the external debt and capital flow management system under the macro-prudential management framework. While boosting the facilitation of cross-border investments and financing, the SAFE will strengthen ongoing and ex-post monitoring and analysis to guard against the risks arising from unusual cross-border capital flows and safeguard China's economic and financial security. 2018-06-29/en/2018/0709/1445.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the preliminary data in the Balance of Payments for the first quarter of 2018, and its press spokesperson answered media questions on relevant issues. Q: Could you brief us on the new characteristics of the balance of payments for the first quarter of 2018? A: The preliminary data in the Balance of Payments for the first quarter show that the current account was in deficit, the financial account (excluding reserve assets) (including net errors and omissions for the quarter, the same below) was in surplus, and reserve assets rose, with the main new characteristics as follows: First, the deficit in the current account was caused by seasonal factors and rapid increase in import of goods. In the first quarter, the current account recorded a deficit of USD 28.2 billion, with a surplus of USD 53.4 billion under trade in goods in the Balance of Payments, down by 35% year on year. To be specific, export of goods was USD 529.6 billion, up by 11% year on year, and import of goods was USD 476.2 billion, up by 21% year on year. The import growth outpaced the export growth, further balancing trade in goods. Moreover, as Chinese people are on holidays at the beginning of the year, the balance of trade in goods for the first quarter is usually at the low level of the year. It is expected that the receipt and payment under the current account will remain in a reasonable range throughout the year. Second, the financial account excluding reserve assets was in surplus, featuring net cross-border capital inflows. In the first quarter of 2018, the financial account excluding reserve assets registered a surplus of USD 54.5 billion, and cross-border capital recorded net inflows, which has been so since the second quarter of 2017. Third, FDI rose rapidly, suggesting overseas investors are optimistic about China's economic prospects. In the first quarter, China posted USD 50.2 billion in net inflows of direct investment, which was three times higher than that in the same period last year. For composition, ODI recorded net outflows of USD 18.1 billion, down by 12% year on year; and FDI registered net inflows of USD 68.2 billion, 1.1 times higher than that in the same period last year. Fourth, reserve assets continued to increase, resulting in an adaptive equilibrium in the balance of payments. In the first quarter, China's reserve assets rose by USD 26.2 billion due to BOP transactions (excluding non-transaction factors like foreign exchange rate and price). Specifically, foreign exchange reserves went up by USD 26.6 billion, compared with a decrease of USD 2.5 billion in the same period last year. Overall, China's balance of payments maintained a basic equilibrium in the first quarter, with cross-border capital continuing with net inflows, and reserve assets rising stably, indicating a solid foundation for the overall equilibrium in the balance of payments in the future. 2018-05-04/en/2018/0612/1437.html
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Q: The latest data disseminated by the People's Bank of China on foreign exchange reserves show that China's foreign exchange reserves as at the end of June 2018 rose USD 1.5 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of June 2018, China's foreign exchange reserves recorded USD 3.1121 trillion, up by USD 1.5 billion or 0.05% month on month. In June China's foreign exchange market performed stably and the balance of payments found an adaptive equilibrium. But global financial markets were more volatile and the US Dollar Index picked up by a slight 0.5% because major non-USD currencies declined against the US dollars and asset prices changed. As a result, China's foreign exchange reserves climbed marginally. In the year to date, China's economy has maintained stability while ensuring progress and gained momentum for growth. But due to divergence of the global economic recovery and rising trade frictions, some emerging economies have been under the pressure of capital outflows and currency depreciation. Nevertheless, in China, market expectations have been stabilized thanks to the robust fundamentals, and cross-border capital flows have remained steady. Looking ahead, China will focus on the supply-side structural reform, deepening the reform and opening up and strengthening innovation drive, indicating China's economy is sophisticated enough to maintain stable growth, which will provide a fundamental guarantee for the stable operation of the foreign exchange market. On the other hand, as trade protectionism rises, the FED continues to hike interest rates and reduce balance sheets, and global liquidity is tightened, the uncertainties of external environment have been heightened. Under such factors at home and abroad, China's foreign exchange reserves are expected to stay stable amid fluctuations. 2018-07-09/en/2018/0709/1466.html
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Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China show that China's foreign exchange reserves by the end of April 2018 fell by USD 18 billion month on month. Could you tell us why? What will be the trends in the future? A: As at the end of April 2018, China registered USD 3.1249 trillion in foreign exchange reserves, down by USD 18 billion or 0.57% month on month. In April, China's cross-border capital flows remained stable and the supply and demand in the foreign exchange market maintained an equilibrium. Under the combined impact of an increase of more than 2% in the US Dollar Index on the international financial markets, the depreciation of major non-USD currencies against the USD and callback of asset prices, China's foreign exchange reserves declined slightly. Since the beginning of this year, China's economic performance has got off to a good start, with transformation and upgrading deepened and quality and benefit rising. The RMB exchange rate against the USD fluctuated in two ways and stayed stable, expectations of the foreign exchange rate rationally diverged, and the supply and demand of foreign exchange found an adaptive equilibrium. Looking ahead, China's economy will be well positioned for stable development with a strong momentum for growth. As the new landscape of opening up is advanced and the financial market is liberalized in two directions, China's cross-border capital will keep overall balance between inflows and outflows. At the same time, despite uncertainties, the world economy will continue to recover. As both domestic and overseas factors play their roles, China's foreign exchange reserves are expected to remain stable on the whole. 2018-05-07/en/2018/0612/1438.html
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Q: The latest foreign exchange reserves data disseminated by the People's Bank of China show that China's foreign exchange reserves for May dropped by USD 14.2 billion month on month. Could you tell us why? What will be the future trends of foreign exchange reserves? A: As at the end of May 2018, China's foreign exchange reserves recorded USD 3.1106 trillion, down by USD 14.2 billion or 0.46% month on month. China's foreign exchange market performed stably in May. The US Dollar Index in global financial markets picked up by 2.3%, because non-USD currencies declined against the US dollars, but asset prices rose. As a result, China's foreign exchange reserves fell slightly. In the year to date, China's economy has gained momentum for growth. To be specific, production demand rose steadily, employment and prices remained stable, economic structure was optimized and upgraded, and quality benefits were improved. The foreign exchange supply and demand has remained balanced, and cross-border capital flows of market participants have found an equilibrium. Looking ahead, China's economy will be fully able and sophisticated to maintain stability with a strong momentum for growth. On that basis, China's foreign exchange market will adapt better to changes in external environment and continue the landscape of rational and balanced cross-border capital flows. On the other hand, as the global economy continues to recover, economies' growth will be diverged, indicating the financial market will still be faced with uncertainties. Under such factors at home and abroad, China's foreign exchange reserves are expected to stay stable. 2018-06-07/en/2018/0613/1440.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the Balance of Payments and International Investment Position for the second quarter and the first half of 2017, and the press spokesperson of the SAFE answered media questions on relevant issues. Q: Could you brief us on China's balance of payments for the first half? A: The first half witnessed a twin surplus under the current account and the financial account (excluding reserve assets) and rising reserve assets. The surplus under the current account was within a reasonable range. In the first half, the current account registered a surplus of USD 69.3 billion, accounting for 1.2% of China's GDP and staying within the reasonable range. In particular, trade in goods in the Balance of Payments recorded a surplus of USD 214.4 billion. The export of goods was USD 1.0269 trillion and the import was USD 812.6 billion, rising by 12% and 18% year on year respectively, suggesting China's foreign trade is being stabilized, with a good momentum for growth. The financial account (excluding reserve assets) registered a surplus. In the first half, the financial account (excluding reserve assets) hit a surplus of USD 67.9 billion, compared with a deficit of USD 178.7 billion for the same period of the previous year. On the one hand, outbound investments stayed stable. In the first half, the net external financial assets derived from BOP transactions rose by USD 134.2 billion. To be specific, the net ODI assets grew by USD 41.1 billion, the net outbound portfolio investment assets, USD 40.1 billion, and other net investment assets including external deposits and loans, USD 53.6 billion. On the other hand, overseas investors increased their investments in China. In the first half, China's net external liabilities grew by USD 202.1 billion. Specifically, net FDI rose by USD 55 billion, net foreign portfolio investment, USD 20.6 billion, and other net investments such as non-residents' deposits and loans, USD 126.7 billion. Reserve assets kept rising. In the first half, China's reserve assets went up by USD 29 billion, which was attributed to the BOP transactions (excluding the impact from non-trading factors such as foreign exchange rates and prices), compared with a drop of USD 157.8 billion for the same period of the previous year. To be specific, foreign exchange reserves grew by USD 29.4 billion, while the reserve position in the IMF wend down by USD 400 million. Looking ahead into the second half, along with the continuous recovery of the world economy, external demand will grow, commodity prices will be further stabilized, the domestic economy will remain within the reasonable range, and the financial market will be further liberalized, indicating China's balance of payments will hopefully find a basic equilibrium. Q: Could you tell us about China's International Investment Position as at the end of June 2017? A: As at the end of June 2017, China's external financial assets and liabilities increased from the end of the previous year. China posted USD 1.7515 trillion in net external assets as at the end of June 2017. To be specific, the external assets hit USD 6.6446 trillion, and the external liabilities, USD 4.8931 trillion, up by 2.8% and 4.9% respectively from the end of the previous year (the same below). All of the external assets were on a steady upward trend. Specifically, direct investment assets increased by USD 52.5 billion or 4.0%; portfolio investment assets went up by USD 49.2 billion or 13.5%; financial derivative assets climbed by USD 700 million or 13.9%; other investment assets increased by USD 23.1 billion or 1.4%; and reserve assets jumped by USD 52.5 billion or 1.7%. All of the external liabilities continued recovering. In particular, direct investment liabilities rose by USD 58.6 billion or 2.0%; portfolio investment liabilities increased by USD 49.6 billion or 6.1%; financial derivative liabilities fell by USD 1.7 billion or 25.5%; and other investment liabilities went up by USD 120.6 billion or 12.2%. Looking at the items, we found from external assets that the reserve assets hit USD 3.1504 trillion, 47% of total assets; direct investment assets reached USD 1.3697 trillion, 21% of total assets; portfolio investment assets were USD 414.3 billion, 6% of total assets; financial derivative assets amounted to USD 6 billion, 0.1% of total assets; and other investment assets reached USD 1.7042 trillion, 26% of total assets. In terms of external liabilities, direct investment liabilities hit USD 2.9245 trillion, accounting for 60% of total liabilities, which remained the highest among external liabilities; portfolio investment liabilities reached USD 858.3 billion, 18% of the total liabilities; financial derivative liabilities were USD 4.9 billion, 0.1% of total liabilities; and other investment liabilities amounted to USD 1.1054 trillion, 23% of total liabilities. Overall, China still takes the top spot worldwide by reserve assets. Its outbound investments are made in an orderly manner and foreign investments rise stably, indicting its international investment position is robust. 2017-09-28/en/2017/0928/1324.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 August 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 August? A: China's cross-border capital flows were further balanced in August. First, the supply and demand of foreign exchange in China remained balanced. In August, banks' foreign exchange settlements rose by 11% month on month, and their sales of foreign exchange went up by 1%, leading to a deficit of USD 3.8 billion, down by 75%. The value of foreign exchange contracted for forward settlements and sales recorded a surplus for fifth consecutive month, which was USD 3.1 billion, up by 18% month on month. Under the combined impact of foreign exchange supply and demand factors, such as banks' spot and forward foreign exchange settlements and sales, and options, a better equilibrium between the supply and demand of foreign exchange was maintained in China in the month than in July. Second, the deficit in foreign-related payments and receipts of the non-banking sector contracted remarkably. In August, foreign-related receipts of the non-banking sector jumped by 14% month on month, and foreign-related payments grew by 6%, leading to a deficit of USD 3.5 billion, down by 84%. In addition, as at the end of August, China's foreign exchange reserves amounted to USD 3.0915 trillion, up by USD 10.8 billion month on month, representing its seventh consecutive month of growth. Domestic market participants witnessed more stable foreign-related transactions, which featured more capital inflows into major channels such as trade and investment. First, market participants' desire to settle foreign exchange rose while their desire to purchase foreign exchange set a new record low. In August, the ratio of banks' foreign exchange settlements for customers to foreign-related foreign exchange receipts was 62.2%, up by 0.2 percentage point month on month; the ratio of banks' foreign exchange purchases for customers to foreign-related foreign exchange payments was 61.5%, down by 1.2 percentage point month on month, consistent with the level of the beginning of 2014. Second, cross-border capital inflows and net foreign exchange settlements under trade in goods increased. In August, the surplus of foreign trade under trade in goods dropped slightly on a month-on-month basis, but the surplus of banks' foreign-related receipts and payments for customers and the surplus of banks' foreign exchange settlements and sales for customers under trade in goods (Customs statistics) went up by 48% and 26% month on month respectively. Third, FDI and foreign exchange settlements rose rapidly. In August, FDI rose by more than 30% month on month, and foreign exchange capital settlements climbed by more than 20% month on month. Moreover, foreign exchange purchases and payments under enterprises' ROI culminated in August, and individuals' purchases of foreign exchange were much lower than the same period last year. Recently China's economy has been performing well with a good momentum for growth, continuing to strengthen market confidence. The RMB exchange rate has experienced two-way fluctuation and stable growth, making domestic market participants more sensible in foreign-related transactions in terms of expectations and behaviors. Going forward, as China's domestic economic fundamentals become more stable, the level of opening up is further deepened, and market expectations are further stabilized, China's cross-border capital flows will sustain a stable, orderly and balanced pattern. 2017-09-18/en/2017/0918/1323.html