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As shown in the statistics of the State Administration of Foreign Exchange (SAFE), in July 2021, the amount of foreign exchange settlement and sales by banks was RMB 1390.0 billion and RMB 1326.8 billion, respectively, with a surplus of RMB 63.2 billion. During January to July 2021, the accumulative amount of foreign exchange settlement and sales by banks was RMB 9218.1 billion and RMB 8279.0 billion, respectively, with an accumulative surplus of RMB 939.2 billion. In the US dollar terms, in July 2021, the amount of foreign exchange settlement and sales by banks was USD 214.7 billion and USD 204.9 billion, respectively, with a surplus of USD 9.8 billion. During January to July 2021, the accumulative amount of foreign exchange settlement and sales by banks was USD 1424.8 billion and USD 1279.5 billion, respectively, with an accumulative surplus of USD 145.3 billion. In July 2021, the amount of cross-border receipts and payments by non-banking sectors was RMB 3317.4 billion and RMB 3198.8 billion, respectively, with a surplus of RMB 118.6 billion.During January to July 2021, the accumulative amount of cross-border receipts and payments by non-banking sectors was RMB 21704.4 billion and RMB 20363.0 billion, respectively, with an accumulative surplus of RMB 1341.4billion. In the US dollar terms, in July 2021, the amount of cross-border receipts and payments by non-banking sectors was USD 512.4 billion and USD 494.1 billion, respectively, with a surplus of USD 18.3billion.During January to July 2021, the accumulative amount of cross-border receipts and payments by non-banking sectors was USD 3354.3 billion and USD 3147.0 billion, respectively, with an accumulative surplus of USD 207.3 billion. Addendum: Glossary and relevant definitions Balance of payments (BOP) refers to all economic transactions between residents and non-residents. Foreign exchange settlement and sales by banks refers to settlement and sale transaction that bank executes for customers and for the banks themselves, including statistic data on settlements of forward contracts for foreign exchange settlement and sales and the exercises of option, and excluding the transactions in the interbank foreign exchange market. The statistic reporting date of Foreign exchange settlement and sales by banks should be the trade day of the Foreign exchange settlement and sales transaction. By definition, foreign exchange settlement means foreign exchange holders sell foreign exchange to designated foreign exchange bank, and foreign exchange sales means designated bank sells foreign exchange to foreign exchange buyers. The newly signed contract amount of forward foreign exchange settlement and sales refers to the binding forward contract between designated foreign exchange bank and client that predetermines foreign exchange currency, amount, exchange rate and tenor which to be executed upon maturity. The unwind amount of forward foreign exchange settlement and sales refers to, where client is unable to perform the original forward contract due to change in its real demand, client to fully or partially close its forward position by executing another deal with opposite direction to the original contract. The rolling amount of forward foreign exchange settlement and sales refers to client to adjust the settlement date of original contract due to change in its real demand. The outstanding amount of forward foreign exchange settlement and sales by the end of the current period refers to the total amount of forward contracts accumulated from all non-matured forward contracts with client. The net Delta exposure of outstanding options refers to the implied foreign exchange spot risk exposure from outstanding option contracts that bank executed with client. The cross-border receipts and payments by non-banking sectors refers to the receipts and payments between domestic non-banking sectors (including institutional and individual residents) and non-residents through domestic banks, excluding receipts and payments in cash. In particular, the statistics includes cross-border receipts and payments between non-banking sectors and non-residents through domestic banks (including RMB and foreign currency), and domestic receipts and payments between non-banking sectors and non-residents through domestic banks (temporarily excluding domestic receipts and payments in RMB between individual residents and non-resident individuals). Data are collected when customers conduct receipts and payments with non-resident counterparties at domestic banks. Specifically, the receipts refer to the capital of non-banking sectors received from non-residents via domestic banks; the payments refer to the capital of non-banking sectors paid to non-residents via domestic banks. 2021-08-20/en/2021/0820/1854.html
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The State Administration of Foreign Exchange (SAFE) recently released the preliminary data of the balance of payments for the second quarter and the first half of 2021. Wang Chunying, SAFE Deputy Administrator and Press Spokesperson, answered media questions on relevant issues. Q: What are the characteristics of China’s balance of payments in the first half of 2021? A: The preliminary data shows that, in the first half of 2021, China maintained a basic equilibrium in its balance of payments. The current account reached surplus of US$122.2 billion, accounting for 1.5% of its gross domestic product during the period, which remained within the reasonable equilibrium range. Direct investment witnessed a net inflow. First, the trade surplus in goods increased year on year. In the first half of 2021, trade in goods on BOP basis posted a surplus of US$230.6 billion, up 35% year on year. Specifically, the export of goods reached US$1.4536 trillion, an increase of 36% year on year, reflecting the combined influence of improved domestic production capacity and pick-up in external demand. The import of goods registered US$1.2229 trillion, a year-on-year increase of 37%, which was mainly attributed to the recovery of the domestic demand and high international commodity prices. Second, the trade deficit in services narrowed year on year. In the first half of 2021, the trade deficit in services recorded US$43.8 billion, a year-on-year decrease of 43%. Travel, intellectual property royalties, and transportation were the main deficit items. Specifically, the deficit in travel declined 28% from a year ago to US$44.4 billion as cross-border tourism and study abroad were affected by the spread of COVID-19 overseas. The deficit in intellectual property royalties was US$15.6 billion, up 21% year on year, with both revenue and expenditure on intellectual property royalties increased, reflecting the mutual benefit and win-win results of China’s efforts to expand international cooperation in the field of intellectual property. The deficit in transportation registered US$7.5 billion, down 61% from the same period last year, as revenue from transportation services grew faster than expenditure. Third, China saw a relatively high surplus in foreign direct investment. In the first half of 2021, the net inflow of foreign direct investments was US$123.7 billion. The net inflow of direct investment to China reached US$179.6 billion, among which the net inflow was US$97.6 billion and US$82 billion, respectively, in the first quarter and the second quarter, both maintaining at a relatively high level. The net outflow of China’s foreign direct investment was US$55.9 billion, indicating that the outward foreign direct investment of enterprises was in a stable and orderly manner. China is accelerating the construction of a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. The basis of internal and external economic development is much stronger, which lays a solid foundation for the stability and basic balance of China’s current account and is conducive to maintaining equilibrium in the balance of payments. 2021-08-06/en/2021/0806/1855.html
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The State Administration of Foreign Exchange (SAFE) has recently released data on surrender and purchase of foreign exchange and banks’ foreign-related receipts and payments on behalf of clients for July 2021. The SAFE Deputy Administrator and Press Spokesperson Wang Chunying answered media questions on foreign exchange receipts and payments for July 2021. Q: Could you brief us on the changes in China’s foreign exchange receipts and payments for July 2021? A: The supply and demand of foreign exchange market were generally balanced in July. Major indicators showed that surrender and purchase of foreign exchange and non-banking sector’s foreign-related receipts and payments posted surpluses of US$9.8 billion and US$18.3 billion respectively, both lower than the monthly average level of the first half of the year, indicating that more equilibrium has been reached in China’s foreign exchange receipts and payments as well as in its foreign exchange supply and demand. By the end of July, foreign exchange reserves stood at US$3.2359 trillion, up by 0.68% over the end of June, mainly due to such factors as the appreciation of non-US dollar currencies against the US dollar and rising global asset prices. The willingness of market entities to surrender and purchase foreign exchange was generally stable. In July, both the surrender and purchase ratios maintained the average levels of recent months, indicating that the transactions and expectations of market entities were basically stable. Among them, the surrender ratio that measures clients’ willingness to sell their foreign exchange, i.e., the ratio of foreign exchange clients sold to banks to their foreign exchange receipts from foreign-related transactions, recorded 69%; the purchase ratio that measures clients’ willingness to buy foreign exchange, i.e., the ratio of foreign exchange bought by clients from banks to their foreign exchange payments for foreign-related transactions was 64%. Cross-border capital flows through major channels were rational, orderly and generally balanced. Cross-border receipts and payments under trade in goods continued to register a surplus in July, and the net inflow of foreign direct investment in China remained high. The increased net holdings of domestic bonds by foreign investors indicated that the renminbi-denominated assets remained attractive. On the other hand, corporate dividend payouts reached the seasonal peak, roughly the same level as the same period of the previous years. The net payment of service trade continued to run low, and the foreign direct investment by domestic entities remained generally stable. At present, the global epidemic is still evolving and the recovery of the world economy is uneven, indicating a more complex and severe external environment. However, China has achieved a stable and sustained economic recovery, and momentum of development is gathering. Steady progress has been made in the two-way opening-up of financial market and the foreign exchange market has become more mature, which will provide a strong support for the steady development of China’s foreign exchange receipts and payments. 2021-08-20/en/2021/0820/1862.html
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On the morning of July 26, the State Administration of Foreign Exchange (SAFE) held a video conference on foreign exchange administration for the second half of 2021. The meeting conveyed the study and implementation of the essential arrangements of the CPC Central Committee and the State Council on economic and financial work. It reviewed the work in the first half of the year and analyzed the economic, financial, and foreign exchange situation at home and abroad. The meeting also carried out research and deployment on key tasks for the second half of the year. Pan Gongsheng, Secretary of the CPC Leadership and Administrator of the SAFE, delivered the work report. Members of the SAFE CPC Leadership and the Chief Accountant also attended the meeting. The meeting believed that, in the year to date, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, SAFE has been earnestly implementing the decisions and arrangements of the CPC Central Committee and the State Council, ensuring “stability on the six fronts” and “security in the six areas.” It has continuously promoted reforms and opening-up in the foreign exchange sector. SAFE has also effectively maintained the basic stability of the foreign exchange market and China’s economic and financial security. This helped create a favorable foreign exchange market environment for the celebration of the 100th anniversary of the founding of the Communist Party of China (CPC). First, SAFE has promoted high-quality development of Party building. Through thorough study and implementation of the guiding principles in General Secretary Xi Jinping’s Keynote Speech at the Party History Study and Education Mobilization Conference, SAFE has made solid progress in party history study and education, and further promoted the practical activities of “I do practical work for the masses”. The Administration has also launched a series of activities to celebrate the 100th anniversary of the founding of the CPC. Led by the political building of the Party, the Administration will step up to further rigorous self-discipline of the Party. Second, SAFE has deepened the reform and opening-up in the foreign exchange sector and facilitated cross-border trade and investment. SAFE has promoted pilot projects to facilitate foreign exchange receipts and payments of trade, improved foreign exchange transactions for individuals, supported the healthy development of new forms of trade, carried out pilot projects to integrate local and foreign currency capital pools for multinational corporations, and enriched the application scenarios of cross-border financial blockchain service platforms. Third, SAFE has achieved positive results in preventing risks of cross-border capital flows. It has strengthened the macro-prudential management and expectation management, and provided guidance to enterprises in establishing the concept of “exchange rate risk neutrality”. SAFE has also effectively addressed breaches of laws and regulations in the foreign exchange field and maintained healthy order in the foreign exchange market. Fourth, SAFE has continuously improved the operation and management of foreign exchange reserves. Foreign exchange reserves have remained stable at around US$3.2 trillion. The meeting stressed that, in the second half of 2021, SAFE should continue to base themselves on the new development stage, implement the new development concept, build a new development pattern, better coordinate development and security, constantly reform and improve the foreign exchange management system and mechanism that are compatible with the new system of a higher-level open economy, and promote the high-quality development of foreign exchange management. The meeting set out the key tasks for foreign exchange administration in the second half of 2021. First, SAFE will step up to comprehensively govern the Party with strict discipline. Through earnest study and implementation of the spirit of General Secretary Xi Jinping’s important speech at the celebration of the 100th anniversary of the founding of the CPC, SAFE will closely link the study and education of the Party’s history with the work of the foreign exchange management, and make sure the full and effective implementation of “I do practical work for the masses” task list. SAFE will accentuate Party conducts and uphold integrity, perform strict supervision and management of cadres, and build a high-quality and professional foreign exchange management team who are loyal, incorruptible and responsible. Second, SAFE will unswervingly promote reform and opening-up in the foreign exchange field. It will ensure the comprehensive implementation of all the existing facilitation policies and further expand the scope of facilitation pilot projects such as receipts and payments of foreign exchange in trade, cross-border investment by private equity funds, and fund pools with integrated domestic and foreign currency for multinational enterprises. SAFE will also actively support new forms and models of foreign trade, facilitate foreign exchange transactions for individuals, and provide support mechanisms for regional openness and innovation. Third, SAFE will improve the integrated management framework of “macro-prudence and micro-regulation” in the foreign exchange market. It will improve cross-border capital flows by strengthening macro-prudential measures, improve the micro-regulation of the foreign exchange market by transforming the regulatory approach. SAFE will delve into establishing the authenticity check management mechanism mainly with due diligence in advance, monitoring in the process, spot check after the event, and substantive review and exemption with due diligence. SAFE will severely crack down on illegal activities in the foreign exchange field, such as underground banks and cross-border gambling. Fourth, SAFE will deepen reform to “streamline administration and delegate power, improve regulation, and upgrade services”. It will continue to streamline administrative licensing matters, standardize the handling of administrative licensing matters, encourage more foreign exchange administration to be conducted online, and upgrade “Internet + government services”. Fifth, SAFE will improve the ability to operate and manage foreign exchange reserves, promote the capability construction of scientific and technological operation and management, and ensure the safety and flow of foreign exchange reserves, as well as the maintenance and appreciation of their value. Sixth, SAFE will consolidate the essential work of foreign exchange administration. It will strengthen research around the “14th Five-Year” foreign exchange administration reform plan and revision of the Regulations on Foreign Exchange System, build a high-level statistical system of balance of payments, and promote the construction of “digital foreign exchange administration” and “safe foreign exchange administration”. Officials at or above the director level from all departments and subsidiaries of the SAFE attended the meeting in the main venue. Comrades in charge of the Discipline Inspection and Supervision Office of the CPC Central Commission for Discipline Inspection and the National Commission of Supervision in the PBOC, the Financial Audit Bureau I of the National Audit Office, and relevant departments of the PBOC were invited to attend the meeting. SAFE branches (administrative offices) participated in the meeting at the branch venues. (End) 2021-07-26/en/2021/0726/1853.html
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Shanghai Head Office of the People's Bank of China (“PBC”); all branches and business management departments of the PBC; all central sub-branches of the PBC in capital cities of provinces (autonomous regions); the central sub-branch of the PBC in Shenzhen; sub-bureaus and foreign exchange administration departments of the State Administration of Foreign Exchange (“SAFE) in all provinces, autonomous regions and municipalities directly under the Central Government, SAFE sub-bureaus in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo: The PBC and the SAFE decide to lower the macro-prudential adjustment parameter for cross-border financing of companies to 1 from 1.25. The Notice takes effect on the same date of its release. For companies that see their risk-weighted outstanding cross-border financing exceeds the upper limit due to the revision, they are allowed to hold cross-border financing contracts signed prior to the release of the Notice to maturity. Other matters in relation to macro-prudential management for cross-border financing shall still be subject to Notice of the People's Bank of China on Matters Concerning the Macro-Prudential Management for Full-covered Cross-border Financing (Yinfa No. 9 [2017]). The People’s Bank of China The State Administration of Foreign Exchange January 7, 2021 2021-01-08/en/2021/0107/1861.html
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Q: The State Administration of Foreign Exchange (SAFE) has just released the latest data on China’s foreign exchange reserves. Could you explain the causes of changes in foreign exchange reserves for July 2021? What will be the future trends? A: By the end of July 2021, China’s foreign exchange reserves recorded US$3.2359 trillion, up by US$21.9 billion or 0.68% month on month. In July, China maintained basic balance in the supply and demand in the foreign exchange market, with stable market expectations. Mainly driven by the COVID-19 resurgence, the monetary policy expectations and macroeconomic data of major economies, non-US dollar currencies strengthened slightly in the international financial market, and the prices of global financial assets went up. China’s foreign exchange reserves, priced by the US dollar, increased this month due to the combined impact of currency conversion and changes in asset prices. Amid the ongoing uncertainty around the COVID-19 pandemic that leads to the evolving global economic and financial landscape filled with instability, the Chinese economy steadily recovers with good momentum for growth and high-quality development remains firmly in place, which will provide support for the overall stability of foreign exchange reserves. 2021-08-07/en/2021/0807/1856.html
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According to the statistics of the State Administrationof Foreign Exchange (SAFE), the Chinese foreign exchange market (excludingforeign currency pairs, the same below) recorded total transactions of RMB 21.32 trillion (equivalent to USD 3.29 trillion) in July 2021. In terms of markets, the transactions volume of clientmarket was RMB 3.10 trillion(equivalent to USD 0.48 trillion), and the transactions volume of interbankmarket was RMB 18.22 trillion(equivalent to USD 2.81 trillion). Interms of products, the cumulative transactions volume of the spot market wasRMB 8.21 trillion (equivalent to USD 1.27 trillion), and that of the derivatives market was RMB 13.11 trillion (equivalent to USD 2.02 trillion). From January to July 2021, a total of RMB 133.95 trillion (equivalent to USD 20.70 trillion) was traded in the Chinese foreign exchangemarket. 2021-08-27/en/2021/0827/1860.html
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In November 2021,China’s international trade in goods and services recorded receipts of RMB 2186.0 billion and payments of RMB 1898.1 billion based on statistics of balance of payments (BOP), registering a surplus of RMB 287.9 billion. Specifically, trade in goods registered receipts of RMB 1978.5 billion, payments of RMB 1658.3 billion, recording a surplus of RMB 320.2 billion; trade in services recorded receipts of RMB 207.5 billion, payments of RMB 239.8 billion, resulting in a deficit of RMB 32.3 billion. In the US dollar terms, in November 2021, the receipts and payments of China's international trade in goods and services were USD 341.8 billion and USD 296.8 billion respectively, registering a surplus of USD 45.0 billion. Specifically, the receipts and payments from trade in goods were USD 309.4 billion and USD 259.3 billion respectively, resulting in a surplus of USD 50.1 billion. Trade in services registered receipts and payments of USD 32.4 billion and USD 37.5 billion respectively, recording a deficit of USD 5.0 billion. (End) International Trade in Goods and Services of China (Based on the BOP statistics) November 2021 Item In 100 million of RMB In 100 million of USD Goods and services 2879 450 Credit 21860 3418 Debit -18981 -2968 1. Goods 3202 501 Credit 19785 3094 Debit -16583 -2593 2. Services -323 -50 Credit 2075 324 Debit -2398 -375 2.1 Manufacturing services on physical inputs owned by others 75 12 Credit 79 12 Debit -4 -1 2.2 Maintenance and repair services n.i.e 23 4 Credit 44 7 Debit -21 -3 2.3 Transport -9 -1 Credit 901 141 Debit -910 -142 2.4 Travel -565 -88 Credit 61 10 Debit -627 -98 2.5 Construction 37 6 Credit 82 13 Debit -45 -7 2.6 Insurance and pension services -26 -4 Credit 53 8 Debit -79 -12 2.7 Financial services 0 0 Credit 28 4 Debit -28 -4 2.8 Charges for the use of intellectual property -120 -19 Credit 48 7 Debit -168 -26 2.9 Telecommunications, computer and information services 61 9 Credit 267 42 Debit -207 -32 2.10 Other business services 207 32 Credit 495 77 Debit -289 -45 2.11 Personal, cultural, and recreational services -10 -2 Credit 6 1 Debit -16 -3 2.12 Government goods and services n.i.e 6 1 Credit 10 2 Debit -4 -1 Notes: 1. The trade in goodsand services in this table refers to the transactions between residents andnon-residents, based on the same standard as that for BOP statement. The monthly data are preliminary and may be inconsistent with the quarterly data in the BOP statement. 2. The data on international trade in goods and services are prepared in USD, and the RMB data for the current month is derived by converting the USD data at the monthly average central parity rate of the RMB against the USD. 3. This table employs rounded-off numbers. Definition of Indicators: Goods and Services: refers to the trade in goods and services between residents and non-residents, which is based on the same standard as that for the BOP statement. 1. Goods: refers to transactions in goods whereby the economic ownership is transferred between the Chinese residents and non-residents. The credit side records export of goods, while the debit side records import of goods. The data of goods account are mainly from the customs statistics of imports and exports, but differ from the statistics of the customs mainly in the following aspects:first, the goods in the BOP statement only reflect the goods whose ownership has been transferred (e.g. goods under the trade modes such as general trade and processing trade with imported materials), while the goods whose ownershipis not transferred (e.g. manufacturing services with supplied materials or with exported materials) are included in the statistics of trade in services instead of the statistics of trade in goods; second, as required by the BOP statistics, the goods imported and exported are valued on the FOB basis, but as required by the customs, the goods exported are valued on the FOB basis, whereas goods imported are on the CIF basis. Therefore, for the purpose of the BOP statistics, the international transport and insurance premiums are taken out from the value of imported goods and included in the trade in services; and third, the data on net export of goods in merchanting which are not included in the customs statistics are supplemented. 2. Services: includes manufacturing services on physical inputs owned by others, maintenance and repair services n.i.e, transport, travel,construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunications, computer and information services, other business services, personal, cultural and recreational services, and government goods and services n.i.e. The credit side records services supplied, while the debit side records services received. 2.1 Manufacturingservices on physical owned by others: processor only provides processing, assembly, packaging and other services and charges service fee from the owner, while the ownership of the goods isnot transferred between the owner and the processor. The credit side records the manufacturing services supplied by the Chinese residents on physical inputs owned by non-residents, and vice versa for debit side. 2.2 Maintenance and repair services: refer to the maintenance and repair services supplied by residents to non-residents or vice versa on goods and equipment (such as vessel, aircraft, and other transportation facility) owned by the receiving party. The credit side records the maintenance and repair services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.3 Transport: refers to the process of transporting people and goods from one place to another, and the relevant supporting and auxiliary services, as well as postaland delivery services. The credit side records the international transport, postal and delivery services supplied by residents to non-residents, and vice versa for debit side. 2.4 Travel: refers to goods consumed and services purchased by travelers in various economies as non-residents. The credit side records the goods and services provided by the Chinese residents to non-residents who have stayed in China for less than one year, as well as non-residents studying abroad and seeking medical treatment for indefinite period of stay. The debit side records the goods and services purchased by the Chinese residents when traveling, studying or seeking medical services abroad from non-residents. 2.5 Construction services: refer to the establishment, renovation, maintenance or expansion of fixed assets in the form of buildings, land improvement, roads, bridges and dams and other engineering buildings of engineering nature, relevant installation,assembly, painting, pipeline construction, demolition and project management,as well as site preparation, measurement and blasting and other special services. The credit side records the construction services provided by the Chinese residents outside the economic territory. The debit side records the construction services received by the Chinese residents in the Chinese economic territory from non-residents. 2.6 Insuranceand pension services: refers to various insurance services and commission to agents related with insurance transaction. The credit side records the life insurance and annuity, non-lifeinsurance, reinsurance, standardized guarantee services and relevant supporting services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.7 Financial services: refer to financial intermediation and supporting services, excluding those covered by insurance and pension services. The credit side records the financial intermediation and supporting services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.8 Charges for the use of intellectual property: refer to licensed use of intangible, non-productive/non-financial assets and exclusive rights between residents and non-residents and the licensed use of existing original works or prototypes. The credit side records the intellectual property-related services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.9 Telecommunications, computer and information services: refer tocommunications services between residents and non-residents and transactions of services related to computer data and news, excluding commercial services delivered via telephone, computer and Internet. The credit side records the telecommunications, computer and information services supplied by residents to non-residents, and vice versa for debit side. 2.10 Other business services: refer to other types of services between residents and non-residents, including research and development services, professional and management consulting services, technical and trade-related services. The credit side records the other business services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.11 Personal, cultural and recreational services: refer to transactions of personal, cultural and recreational services between residents and non-residents, including audiovisual and related services (films,radio, television programs and music recordings) and other personal, cultural and recreational services (health, education, etc.). The credit side records the related services supplied by the Chinese residents to non-residents, and vice versa for debit side. 2.12 Government goods and services n.i.e: refer to various goods and services provided and purchased by governments and international organizations not included in other categories of goods and services. The credit side records the goods and services not included elsewhere and supplied by the Chinese residents to non-residents, and vice versa for debit side. 2021-12-30/en/2021/1230/1902.html
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The State Administration of Foreign Exchange (SAFE) has recently issued the Guidelines on Code of Conduct for the Foreign Exchange Market (Huifa No. 34 [2021], hereinafter referred to as the Guidelines). The SAFE Deputy Administrator and Press Spokesperson Wang Chunying answered media questions on relevant content of the Guidelines. Q: Could you brief us on the background of the Guidelines? A: In recent years, countries around the world have generally strengthened the governance of the foreign exchange market, in order to promote it operate in a more standardized manner. For example, financial regulators of major economies, using the Bank for International Settlements as a platform, formulated the FX Global Code in 2017, and established a Global Foreign Exchange Committee to promote the implementation of the guidelines. China is also an important participant. The SAFE attaches great importance to and actively promotes the standardized operation of the foreign exchange market. Under its guidance, the China Foreign Exchange Trade System organized market makers in the interbank foreign exchange market to formulate and issue the Guidelines on Professional Ethics and Market Practices in the Interbank Foreign Exchange Market in 2014. Under the joint instruction of the SAFE and the People’s Bank of China, in reference to the FX Global Code and based on the practice of China’s foreign exchange market, the Guidelines for China’s Foreign Exchange Market were released by the self-regulatory mechanism for the national foreign exchange market in 2017. The SAFE instructed the China Foreign Exchange Trade System to revise the Trading Rules of Interbank Renminbi Foreign Exchange Market in 2020. These laws and regulations mentioned above have played a positive role in promoting and standardizing the development of China’s foreign exchange market. In order to further guide the standardized operation of the foreign exchange market, the SAFE formulated the Guidelines on the basis of summarizing the previous supervision experience and learning the opinions of relevant departments, market subjects and the public through full investigation. The Guidelines enriched the existing supervision and regulation system of the foreign exchange market, and promoted honest, fair, orderly and efficient operation of the foreign exchange market. Q: Could you tell us the scope and subjects of the Guidelines? A: The scope of application of the Guidelines includes the interbank market and the over-the-counter (OTC) market. The subjects of the Guidelines are defined as all parties involved in the foreign exchange market. The institutions engaging in foreign exchange transactions, China Foreign Exchange Trade System, Shanghai Clearing House, and the money brokerage companies are all incorporated into the concept of “market participants”. All the market participants shall abide by the code of conduct on an equal basis. Among them, banks and other financial institutions, as the main suppliers of financial services, are the core participants in providing foreign exchange market services from a professional perspective, and as a result they are the major supervision subjects of the Guidelines. Q: Could you tell us the core content of regulation under the Guidelines? A: The Guidelines focus on regulating transactions in the foreign exchange market, and the core content is transaction management and information management. Market participants shall process customer trading instructions or orders in a fair, transparent and honest manner, properly eliminate or manage conflicts of interest, conduct proprietary foreign exchange transactions reasonably. They shall not transfer profits, engage in trading activities using non-public information, or engage in market manipulation or fraud. Market participants shall effectively identify and protect sensitive information, exchange transaction information in a manner in accordance with regulations, properly preserve transaction information records and exchange information records, and perform information disclosure obligations to customers or the public. Q: Could you tell us the impact of the Guidelines on banks and foreign exchange markets? A: The issuance of the Guidelines is an important measure for the construction and governance of China’s foreign exchange market, and it plays a positive role in promoting the development of the foreign exchange market. First, the Guidelines will facilitate the smooth and orderly operation of the foreign exchange market. The Guidelines are the crystallization of practices in the foreign exchange market, reflecting the needs of banks and other financial institutions. Since its establishment in 1994, China’s foreign exchange market has generally maintained stable and standardized operation. As early as 2014 and 2017, China issued the Guidelines on Professional Ethics and Market Practices in the Interbank Foreign Exchange Market and the Guidelines for China’s Foreign Exchange Market in the form of market self-regulatory codes. Based on practical experience in the market, the Guidelines upgrade the effective rules in the above self-regulatory codes into regulations to further provide legal guarantee for the standardized operation of the foreign exchange market. Second, the Guidelines are conducive to further exerting the role of the foreign exchange market in serving the real economy. The Guidelines put forward specific requirements for banks and other financial institutions to perform the principles of openness, fairness, justice and integrity in OTC foreign exchange transactions conducted by customers, which will have positive impacts on participants in China’s foreign exchange market and better serve the real economy. Third, the Guidelines help China’s foreign exchange market in docking of mature rules in the international market. Benchmarking the FX Global Code and the latest practice of international financial regulatory reform, the Guidelines contribute to promoting the integration of China’s foreign exchange market management rules with international standard. Thus, it is of positive significance for China’s banks to participate in global competition and expand the opening-up of the financial market. In recent years, banks have continued to promote various tasks in terms of system, equipment, personnel and other aspects in compliance with the self-regulatory requirements of the foreign exchange market, and consolidated the foundation of standardized operation. The Guidelines are generally based on market practices and experience and will not affect banks’ normal participation in foreign exchange transactions or their existing foreign exchange business with their customers. Q: The Guidelines set up a transitional period for OTC foreign exchange transactions conducted by banks and other financial institutions. Could you tell us what are the main considerations? A: The formulation of the Guidelines draws on the latest international regulatory experience, absorbs the self-regulatory standard on dealing with customers from the FX Global Code and the Guidelines for China’s Foreign Exchange Market. When conducting OTC foreign exchange transactions, it requires banks and other financial institutions to handle customer transaction orders fairly, protect customer sensitive information, and must not take advantage of market position of comparative advantage, or take improper behavior to harm the interests of customers. According to the opinions solicited in the early stage, banks and other financial institutions still need to make some preparations for the implementation of the Guidelines for customers’ OTC foreign exchange transactions, for instance, retaining exchange records related to the transactions of enterprises and other customers. The transitional period can facilitate banks and other financial institutions to carry out relevant preparations. 2021-12-03/en/2021/1203/1910.html
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In the third quarter of 2021, China's current account registered a surplus of RMB 476.2 billion, and the capital and financial accounts recorded a deficit of RMB 311.9 billion. The financial account (excluding reserve assets) recorded a surplus of RMB 84.7 billion, and reserve assets rose by RMB 397.3 billion, of which RMB 271.6 billion was from the allocation of Special Drawing Right (SDR) by IMF. In the first three quarters of 2021, China's current account registered a surplus of RMB 1271.2 billion, and the capital and financial accounts recorded a deficit of RMB 677.9 billion. The financial account (excluding reserve assets) recorded a surplus of RMB 268.2 billion, and reserve assets rose by RMB 946.7 billion. In SDR terms, in the third quarter of 2021, China posted a surplus of SDR 51.8 billion under the current account, and a deficit of SDR 34 billion under the capital and financial accounts. The financial account (excluding reserve assets) registered a surplus of SDR 9.1 billion, and reserves assets rose by SDR 43.2 billion, of which SDR 29.5 billion was from the allocation of SDR by IMF. In SDR terms, in the first three quarters of 2021, China posted a surplus of SDR 137.3 billion under the current account, and a deficit of SDR 73.1 billion under the capital and financial accounts. The financial account (excluding reserve assets) registered a surplus of SDR 29.2 billion, and an increase of SDR 102.3 billion under reserves assets. In the US dollar terms, in the third quarter of 2021, China's current account recorded a surplus of USD 73.6 billion, including a surplus of USD 136 billion under trade in goods, a deficit of USD 31.9 billion under trade in services, a deficit of USD 34.1 billion under primary income, and a surplus of USD 3.5 billion under secondary income. The capital and financial accounts recorded a deficit of USD 48.3 billion, including a surplus of USD 107 million under the capital account, a surplus of USD 13 billion under the financial account (excluding reserve assets), and an increase of USD 61.4 billion under reserves assets, of which USD 41.9 billion was from the allocation of SDR by IMF. In the US dollar terms, in the first three quarters of 2021, China's current account recorded a surplus of USD 196.3 billion, including a surplus of USD 374.2 billion under trade in goods, a deficit of USD 82.5 billion under trade in services, a deficit of USD 105.6 billion under primary income, and a surplus of USD 10.2 billion under secondary income. The capital and financial accounts recorded a deficit of USD 104.4 billion, including a surplus of USD 97 million under the capital account, a surplus of USD 41.8 billion under the financial account (excluding reserve assets), and an increase of USD 146.4 billion under reserves assets. (End) Abridged Balance of Payments of China, Third Quarter of 2021 Item Line No. RMB 100 million USD 100 million SDR 100 million 1. Current Account 1 4762 736 518 Credit 2 64649 9992 7027 Debit 3 -59888 -9256 -6510 1. A Goods and Services 4 6736 1041 732 Credit 5 59263 9160 6442 Debit 6 -52527 -8118 -5710 1.A.a Goods 7 8801 1360 957 Credit 8 53619 8287 5828 Debit 9 -44818 -6927 -4872 1.A.b Services 10 -2065 -319 -225 Credit 11 5644 872 614 Debit 12 -7709 -1192 -838 1.B Primary Income 13 -2203 -341 -240 Credit 14 4622 714 502 Debit 15 -6825 -1055 -742 1.C Secondary Income 16 229 35 25 Credit 17 765 118 83 Debit 18 -535 -83 -58 2. Capital and Financial Account 19 -3119 -483 -340 2.1 Capital Account 20 7 1 1 Credit 21 9 1 1 Debit 22 -2 0 0 2.2 Financial Account 23 -3126 -484 -340 Assets 24 -8817 -1363 -959 Liabilities 25 5691 880 619 2.2.1 Financial Account Excluding Reserve Assets 26 847 130 91 2.2.1.1 Direct Investment 27 2766 427 300 Assets 28 -1922 -297 -209 Liabilities 29 4689 725 510 2.2.1.2 Portfolio Investment 30 1603 248 174 Assets 31 -34 -5 -4 Liabilities 32 1637 253 178 2.2.1.3 Financial Derivatives (other than reserves) and Employee Stock Options 33 133 20 14 Assets 34 223 34 24 Liabilities 35 -90 -14 -10 2.2.1.4 Other Investment 36 -3654 -566 -398 Assets 37 -3110 -481 -339 Liabilities 38 -545 -84 -59 2.2.2 Reserve Assets 39 -3973 -614 -432 3. Net Errors and Omissions 40 -1643 -253 -178 Notes: 1.The statement is compiled according to BPM6. Reserve assets are included incapital 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 the period average central parity rate of RMB against USD. The quarterly accumulated RMB denominated BOP data is derived from the sum of the RMB denominated data for the quarters. 4.The SDR denominated quarterly BOP data is converted from the USD denominated BOP data, using the period 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. 7.The BOP data is revised regularly; please find the latest data in “Data and Statistics”. Abridged China’s Balance of Payments, First Three Quarters of 2021 Item Line No. RMB 100 million USD 100 million SDR 100 million 1. Current Account 1 12712 1963 1373 Credit 2 180059 27829 19451 Debit 3 -167348 -25866 -18079 1. A Goods and Services 4 18877 2917 2039 Credit 5 163139 25214 17624 Debit 6 -144262 -22297 -15585 1.A.a Goods 7 24210 3742 2615 Credit 8 147850 22851 15972 Debit 9 -123640 -19109 -13357 1.A.b Services 10 -5333 -825 -576 Credit 11 15290 2363 1652 Debit 12 -20622 -3188 -2228 1.B Primary Income 13 -6828 -1056 -738 Credit 14 14688 2270 1586 Debit 15 -21515 -3326 -2324 1.C Secondary Income 16 663 102 72 Credit 17 2232 345 241 Debit 18 -1570 -243 -170 2. Capital and Financial Account 19 -6779 -1044 -731 2.1 Capital Account 20 6 1 1 Credit 21 14 2 1 Debit 22 -7 -1 -1 2.2 Financial Account 23 -6785 -1045 -731 Assets 24 -41119 -6353 -4433 Liabilities 25 34334 5308 3702 2.2.1 Financial Account Excluding Reserve Assets 26 2682 418 292 2.2.1.1 Direct Investment 27 10620 1640 1145 Assets 28 -5524 -854 -597 Liabilities 29 16144 2495 1742 2.2.1.2 Portfolio Investment 30 2857 445 311 Assets 31 -6425 -992 -691 Liabilities 32 9283 1437 1001 2.2.1.3 Financial Derivatives (other than reserves) and Employee Stock Options 33 240 37 26 Assets 34 588 91 63 Liabilities 35 -348 -54 -38 2.2.1.4 Other Investment 36 -11036 -1704 -1190 Assets 37 -20291 -3134 -2185 Liabilities 38 9255 1430 996 2.2.2 Reserve Assets 39 -9467 -1464 -1023 3. Net Errors and Omissions 40 -5933 -919 -642 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 the period 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 the period average exchange rate of SDR against USD. The quarterly accumulated SDR denominated BOP data is derived from the sum 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. 7.The BOP data is revised regularly; please find the latest data in “Data and Statistics”. 2021-12-31/en/2021/1231/1908.html