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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' sales and settlements of foreign exchange and their foreign-related receipts and payments for customers for January 2017. The SAFE press spokesperson answered media questions on relevant issues to make further clarification. Q: Could you brief us on the new changes in China's cross-border capital flows since the beginning of the year 2017. A: Since the beginning of 2017, the pressure from cross-border capital outflows facing China has been relieved remarkably. First, the deficit in banks' sales and settlements of foreign exchange has contracted. In January 2017, a deficit of USD 19.2 billion was registered under banks' sales and settlements of foreign exchange, down by 59% month on month and 65% year on year. In particular, a deficit of USD 15.6 billion was recorded under sales and settlements of foreign exchange in the non-banking sector such as enterprises and individuals, down by 64% month on month and 77% year on year. Second, a declining deficit was recorded under foreign-related receipts and payments in the non-banking sector. In January, the non-banking sector posted a deficit of USD 9.7 billion under foreign-related receipts and payments, down by 21% month on month and 83% year on year. To be specific, a surplus of USD 1.7 billion in foreign exchange receipts and payments, and a deficit of USD 11.4 billion in RMB receipts and payments were posted. The recent positive changes in the supply and demand of foreign exchange in China are multifaceted. First, market participants prefer settling foreign exchange to buying foreign exchange. In January, the ratio of customers' foreign exchange settlements with banks to the banks' foreign-related foreign exchange receipts was 62%, up by 4 percentage points month on month, while the ratio of customers' foreign exchange purchases with banks to the banks' foreign-related foreign exchange payments was 71%, down by 3 percentage points. Second, enterprises' cross-border foreign exchange financing has risen stably, and their repayment of domestic foreign exchange loans has dropped further. In January, the balance of cross-border financing for imports such as refinancing and forward L/C went up by USD 4.1 billion month on month, marking growth for the 11th consecutive month; enterprises' purchases of foreign exchange to service domestic foreign exchange loans had hit rock bottom since March 2013, down by 45% month on month. Last but not least, domestic players' demand for purchasing foreign exchange has been further stabilized. In January, for example, enterprises' purchases of foreign exchange with ODI funds dropped by 8% month on month, and with ROI, by 20% month on month; and individuals' purchases of foreign exchange under travel for trips and study abroad fell by 28% month on month. China's overall cross-border capital flows are presenting a more remarkable feature of reaching an equilibrium. Despite the many uncertainties in the external environments that are easy to trigger short-term fluctuations in global financial markets, China's middle and long-term development trends of cross-border capital flows will remain unchanged, with the economic fundamentals still serving as the fundamental support. Since the beginning of 2017, China's economy has continued to operate within a reasonable range. In January, the official manufacturing PMI remained above the boom and bust line for the 6th consecutive month, and PPI rose positively for the 5th consecutive month. Moreover, China's import and export of goods secured rapid year-on-year growth. 2017-02-17/en/2017/0217/1249.html
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In 2016, the State Administration of Foreign Exchange (SAFE) received and processed 39 proposals and motions from the delegates to the NPC and the members of the CPPCC, which covered supporting enterprise going global, boosting RMB internationalization, providing financial support for the Belt and Road Initiative, RMB capital account convertibility and supporting the development of pilot FTZ. The SAFE attached great importance to the processing efforts, arranged relevant work, and made great efforts to carry out the related tasks. As a result, the processing of the relevant proposals and motions for 2016 was completed successfully, which can be attributable to the following aspects: first, close attention from the leadership and thoughtful arrangements. With the significance of the proposals and motions processing stressed by the SAFE's Party Leadership Group, the leaders in charge of this processing effort convened a special meeting to make arrangements and raise requirements for the processing. Second, improved systems and standardized processing. A special measure has been developed to make sure the processing is institutionalized and standardized. Third, good coordination and communication to enhance the processing level. The SAFE took various measures to communicate with the delegates and further listened to their opinions and suggestions to ensure the quality of the processing. Fourth, strengthened training and rigorous overseeing. Training was provided for the persons processing the proposals and motions and supervision was improved to make sure every proposal and motion was replied and every inquiry got response. After the completion of the processing, a wrap-up meeting was held to identify and summarize the experience gained and good practices in this processing effort. 2017 is a year of great importance in the 13th Five-year Plan period and a year when the supply-side structural reform will go deeper. The SAFE shall make the processing of proposals and motions from the 2017 NPC and CPPCC testimony to the implementation of the gist of the 18th CPC National Congress, the Third, Fourth, Fifth and Sixth Plenums of the 18th CPC Central Committee and the Central Economic Work Conference, and continue to improve its work styles and work hard to do well in the processing of the proposals and motions from the 2017 NPC and CPPCC, and embrace the 19th CPC National Congress with real actions. 2017-02-27/en/2017/0227/1250.html
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To expand the opening up of the foreign exchange market and boost the liberalization of the interbank bond market, the State Administration of Foreign Exchange (SAFE) has recently released the Circular of the State Administration of Foreign Exchange on Foreign Exchange Risk Management for Foreign Institutional Investors in the Interbank Bond Market (Huifa No. 5 [2017], "Circular"). The Circular mainly includes the following: Firstly, any foreign institutional investor in the interbank bond market could handle the RMB-foreign exchange derivatives business with a qualified domestic financial institution to enhance the level of opening-up of the foreign exchange market. Secondly, under the principle of transaction for actual requirements, foreign institutional investors shall carry out the foreign exchange derivatives business only for the purpose of hedging against the foreign exchange risk exposure arising from the investments in the interbank bond market with funds remitted from abroad, so as to guarantee the order of the foreign exchange market. Thirdly, diverse trading tools and mechanisms will be provided for foreign institutional investors' foreign exchange derivatives business to facilitate foreign exchange risk management. The Circular shall come into force as of the date of issuance. 2017-02-27/en/2017/0227/1251.html
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Q: It has been recently reported that China, in order to crack down on capital flight, has introduced measures to constrain cross-border financing instruments and impact imports. What would you say about this? A: The State Administration of Foreign Exchange (SAFE) has not introduced recently any measures to intensify foreign exchange management with regard to import financing. For the authentic and legitimate foreign exchange receipts and payments under trade, relevant documents could be presented to a bank for direct handling. Cross-border guarantees such as overseas loans under domestic guarantees will continue to be handled in accordance with the Regulations on Foreign Exchange Administration for Cross-border Guarantees. The cross-border guarantees with authentic trade and investing backgrounds and relevant products will not be affected. 2017-01-25/en/2017/0125/1246.html
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On January 23, 2017, Pan Gongsheng, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange (SAFE) met with a delegation headed by Mr. Joerg Wuttke, president of the European Union Chamber of Commerce in China (EUCCC) in Beijing. The two sides exchanged ideas on the outlook for China's economic development, its cross-border capital flows and foreign exchange administration policies. According to Pan Gongsheng, China has sustained stable and healthy economic development. It was in the vanguard of the world for its GDP year-on-year growth of 6.7% in 2016, boasting fundamental factors in place that will support the equilibrium of the balance of payments in a long period to come. China has been committed to building a loose and orderly investment environment, in a bid to make its markets more transparent and standardized. Foreign exchange authorities will focus on ensuring the continuity and consistency of its foreign exchange administration policies. They will work to enhance trade and investment facilitation, ensure foreign-funded enterprises are not constrained in normal outward remittances of their profits, and support capable enterprises that meet certain conditions to engage in authentic ODI in compliance with regulations. Meanwhile, the authorities will make great efforts to intensify the authenticity and compliance reviews, with focus on preventing cross-border capital flow risks and safeguarding the health and stability of the foreign exchange markets. 2017-01-24/en/2017/0124/1245.html
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On January 11, 2017, Pan Gongsheng, deputy governor of the People's Bank of China and administrator of the State Administration of Foreign Exchange met with Axel A. Weber, chairman of the Board of Directors of UBS AG in Beijing. The two sides exchanged views on issues such as the development of China's bond markets, flows of cross-border capital and bilateral cooperation. 2017-01-11/en/2017/0111/1243.html
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FILE: Template on International Reserves аnd Foreign Currency Liquidity(аs аt Dec 31 2016) 2017-01-26/en/2017/0126/611.html
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FILE: Template on International Reserves аnd Foreign Currency Liquidity(аs аt Apr 30 2017).xls 2017-05-31/en/2017/0531/614.html
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FILE: Template on International Reserves аnd Foreign Currency Liquidity(аs аt Feb 28 2017) 2017-03-31/en/2017/0331/612.html
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FILE: Template on International Reserves аnd Foreign Currency Liquidity(аs аt Mar 31 2017) 2017-04-28/en/2017/0428/613.html