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Question: At the end of last year, against the background of the more serious international financial turmoil, in the fourth quarter China experienced capital outflows, with a current account surplus but a capital account deficit in terms of the balance of payments. What is the situation this year? Answer: In the first quarter of this year, the situation of the fourth quarter of last year, whereby China had a current account surplus but a capital account deficit in terms of the balance of payments, was changed, and there was a return of the “twin surplus,” i.e., there was a current account surplus as well as a capital account surplus. However, the status of the overall balance of payments more closely approached equilibrium, mainly embodied in the following respects: First, the current account surplus was narrowed, accounting for a lesser proportion of GDP. According to preliminary estimates, the current account surplus in the first quarter was USD 24.7 billion, a decrease of 14 percent compared with that during the same period of last year, and the proportion of the current account surplus to GDP in the same quarter was 1.4 percent, a decrease of 1.4 percent compared with last year. Second, once again there was a capital account surplus. The size of net inflows of capital (including errors and omissions, the same below) in the first quarter was USD 49.9 billion, a decrease of 56 percent compared with the same period of last year, whereas there was a deficit of USD 48.1 billion in the fourth quarter of 2011. Third, the trend of increasing foreign exchange reserves further slowed down. After adjusting for the change in the exchange rate and asset prices, foreign exchange reserves calculated on the basis of the coverage of the balance of payments in the first quarter increased by USD 74.8 billion (including foreign exchange reserve earnings in the current period), a 46 percent decrease in the increment compared with the same period of last year. In other words, although since the beginning of this year net inflows of foreign exchange rebounded somewhat compared with the end of last year, there were still on a downward trend compared with the same period of last year. This is consistent with our earlier basic judgment that China ’s balance of payments was expected to maintain a surplus, but the size of the surplus would decrease significantly. Question: According to data published by the People’s Bank of China (PBC), there was a new increase of USD 123.8 billion in foreign exchange reserves in the first quarter of this year. Does this mean that China will again face pressures of massive capital inflows? Answer: This does not mean that China will again face pressures of massive capital inflows. First of all, although the data published by the PBC show there was a new increase of more than USD 120 billion in the balance of foreign exchange reserves in the first quarter, this was an increase in the book value of the reserve assets mainly arising from such factors as exchange rate and asset price changes, and it does not reflect actual cross-border capital flows. Second, the increment in the foreign exchange reserves included the operating earnings of the reserves. In view of the large size of operations and management of foreign exchange reserves in China, the operating earnings of the reserves play a significant role in the increase in the balance of foreign exchange reserves. Third, according to the data published by the PBC, in March there was a large increase in outstanding foreign exchange funds, but this does not lead to the conclusion that there is current a large net inflow of capital, mainly because there are differences in the concept and coverage between the outstanding foreign exchange funds and the increment in foreign exchange reserves. Fourth, net inflows of capital rebounded the first quarter, mainly because the environment for international markets improved, the appetite for global investment risks increased, and capital flowed back to the emerging markets. However, the net inflows of cross-border capital in the first quarter still decreased by more than 50 percent compared with the same period of last year. Finally, because the European sovereign debt crisis is still developing and evolving, and the world is still in the process of financial deleveraging, the risks of massive cross-border capital flows are increasing. Question: The PBC announced that the range of fluctuations in the RMB exchange rate against the USD would be expanded as of April 16. What effect will this have on China ’s foreign exchange situation? Answer: This is a major move to further deepen the reform of the RMB exchange rate formation mechanism under the circumstances that China ’s balance of payments situation has gradually improved, the RMB exchange rate has approached a reasonable equilibrium, and development of the foreign exchange market has matured. Since the expansion of the fluctuation range of the exchange rate, in terms of appreciation and depreciation expectations of market transaction participants and actual transactions, the RMB exchange rate fluctuated moderately, and therefore expectations were stable, foreign exchange transactions and investments became more active, and the self-balancing capability of the foreign exchange market was further strengthened. Overall, deepening the reform of the RMB exchange rate mechanism is conducive to allowing market supply and demand play a larger role in the formation of the exchange rate and allowing the RMB exchange rate to approach a reasonable equilibrium level, promoting China’s balance of payments status to develop toward an equilibrium, improving the self-balancing capability of the foreign exchange market, and slowing down the accumulation of foreign exchange reserves. 2012-05-15/en/2012/0515/1051.html
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According to statistical data released by the State Administration of Foreign Exchange (SAFE), in March 2012 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD132.7 billion and USD124.8 billion respectively. The surplus of foreign exchange settlement and sales amounted to USD7.8 billion. During the same period, the total amount involved in contracts for forward settlement of foreign exchange with banks on behalf of clients was USD21.2 billion, the total amount involved in contracts for forward sales of foreign exchange was USD17.9 billion, and the net forward exchange settlement totaled USD3.3 billion. For the first three months of 2012, the cumulative amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD370.2 billion and USD338.6 billion respectively. The surplus of foreign exchange settlement and sales was USD31.6 billion. During the same period, the cumulative amount in the contracts for forward settlement of foreign exchange with banks on behalf of clients was USD48.8 billion, the cumulative amount in the contracts for forward sales of foreign exchange was USD36.3 billion, and the cumulative net forward settlement of foreign exchange with banks on behalf of clients was USD12.5 billion. In March 2012, foreign-related receipts and payments of domestic banks on behalf of clients amounted to USD214.1 billion and USD199.2 billion respectively, and the surplus of foreign-related receipts and payments totaled USD14.9 billion. For the first three months of 2012, cumulative foreign-related receipts and payments of banks on behalf of clients amounted to USD590.6 billion and USD535.4 billion respectively, and the surplus of the cumulative foreign-related receipts and payments reached USD55.1 billion. Annex: Glossary and relevant definitions Balance of Payments refers to all economic transactions occurring between residents and non-residents in China , including all financial transactions and barter exchanges resulting in changes in the assets and liabilities of residents and non-residents. Foreign Exchange Settlement and Sales by Banks refer to settlement and sales conducted by designated foreign exchange banks for their clients or for themselves, excluding data on inter-bank foreign exchange market transactions. Foreign exchange settlement and sales by banks on behalf of clients refer to, including the foreign exchange settlement and sales by banks for themselves, those conducted by designated foreign exchange banks for their clients. The time of conversion between the RMB and the foreign currency is regarded as the time-point for the statistics on the foreign exchange settlement and sales by banks. Specifically, foreign exchange settlement refers to the sale of foreign exchange to designated foreign exchange banks by owners of foreign exchange; foreign exchange sales refer to the sale of foreign exchange by designated foreign exchange banks to users of foreign exchange. The difference between the foreign exchange settlement and sales is regarded as an offset balance. Such differences, which will be offset by the banks through transactions on the inter-bank foreign exchange market, function as a major force resulting in changes to the country’s foreign exchange reserves. However, this is not equivalent to the net change in the foreign exchange reserves during the same period. The principle for transactions between residents and non-residents does not apply to the preparation of statistics on foreign exchange settlement and sales by banks on behalf of clients, and such statistics only cover RMB and foreign currency transactions between banks and their clients, namely, exchange transactions between RMB and foreign currencies, which fall outside the category of the balance- of-payments statistics. Contracts for Forward Settlement and Sales of Foreign Exchange refer to the contracts for forward settlement (sales) of foreign exchange executed between banks and clients through consultation, in which the foreign currency, amount, exchange rate, and term for the forward settlement (sales) of foreign exchange are agreed upon; where the foreign exchange is due to be received (paid), the foreign exchange settlement (sales) is to be handled on the basis of the foreign currency, amount, and exchange rate specified in such contracts. The forward foreign exchange settlement and sales business enables enterprises to lock up the exchange rate in advance for future foreign exchange settlement or sales, and to effectively avoid the risk of changes in the RMB exchange rate. In general, the banks will hedge the risk exposure arising from the forward foreign exchange settlement and sales business on the inter-bank foreign exchange market. For example, where the total amount involved in the contracts for forward settlement of foreign exchange executed by banks is more than that of the contracts for forward sales of foreign exchange, the banks generally will sell an equivalent amount of foreign exchange in advance on the inter-bank foreign exchange market, and vice versa. Therefore, the forward settlement and sales of foreign exchange business is also a factor that affects changes in China ’s foreign exchange reserves. Foreign-related Receipts and Payments by Banks on Behalf of Clients refers to receipts and payment occurring between domestic non-bank resident institutions/individuals (collectively referred to as the “non-bank sector”) and non-resident institutions/individuals through domestic banks, exclusive of the receipts and payments in cash and foreign-related receipts and payments by the banks themselves. In particular they include cross-border receipts and payments between non-bank sectors and non-residents through domestic banks (including RMB and foreign exchange), and domestic receipts and payments between non-bank sectors and non-residents through domestic banks (temporarily excluding receipts and payments in RMB between domestic individual residents and domestic non-resident individuals). Statistics are collected at the time the clients conduct the foreign-related receipts and payments at the domestic banks. Specifically, foreign-related receipts of banks on behalf of clients refer to funds collected by non-bank sectors from non-residents via domestic banks; external payments by banks on behalf of clients refer to funds paid by non-bank sectors to non-residents through domestic banks. Although the foreign-related receipts and payments of banks on behalf of clients are an integral part of the balance-of-payments statistics, the accounting method for the statistics, unlike the accrual basis of accounting required by the balance of payments statistics, is based on a cash basis. In addition, they merely reflect fund flows between non-bank sectors and non-residents, and do not include barter transactions and foreign transactions conducted by the banks themselves. The scope of the statistics on the foreign-related receipts and payments of banks on behalf of clients is smaller than the scope of the balance-of-payments statistics. 2012-05-15/en/2012/0515/1049.html
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According to statistical data released by the State Administration of Foreign Exchange (SAFE), in February 2012 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD114 billion and USD109.6 billion respectively. The surplus of foreign exchange settlement and sales amounted to USD4.4 billion. During the same period, the total amount involved in contracts for forward settlement of foreign exchange with banks on behalf of clients was USD16.5 billion, the total amount involved in contracts for forward sales of foreign exchange was USD10.7 billion, and the net forward exchange settlement was USD5.8 billion. For the first two months of 2012, the cumulative amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD237.6 billion and USD213.8 billion respectively. The surplus of foreign exchange settlement and sales was USD23.8 billion. During the same period, the cumulative amount in contracts for forward settlement of foreign exchange by banks on behalf of clients was USD27.6 billion, the cumulative amount in contracts for forward sales of foreign exchange was USD18.4 billion, and the cumulative net forward settlement of foreign exchange by banks on behalf of clients was USD9.2 billion. In February 2012, foreign-related receipts and payments of domestic banks on behalf of clients amounted to USD193.3 billion and USD179.6 billion respectively; and the surplus of foreign-related receipts and payments reached USD13.7 billion. For the first two months of 2012, the cumulative foreign-related receipts and payments of banks on behalf of clients amounted to USD376.5 billion and USD336.2 billion respectively, and the surplus of the cumulative foreign-related receipts and payments reached USD40.3 billion. Annex: Glossary and relevant definitions Balance of Payments refers to all economic transactions occurring between residents and non-residents in China , including all financial transactions and barter transactions resulting in changes in the assets and liabilities of residents and non-residents. Foreign Exchange Settlement and Sales by Banks refer to settlement and sales conducted by designated foreign exchange banks for their clients or for themselves, excluding data on inter-bank foreign exchange market transactions. Foreign exchange settlement and sales by banks on behalf of clients (including foreign exchange settlement and sales by the banks themselves) refer to those conducted by designated foreign exchange banks for their clients. The time of conversion between the RMB and the foreign currency is regarded as the time-point for the statistics on the foreign exchange settlement and sales by banks. Specifically, foreign exchange settlement refers to the sale of foreign exchange to designated foreign exchange banks by owners of foreign exchange; foreign exchange sales refer to the sale of foreign exchange by designated foreign exchange banks to users of foreign exchange. The difference between the foreign exchange settlement and sales is regarded as an offset balance. Such differences, which will be offset by the banks through transactions on the inter-bank foreign exchange market, function as a major force resulting in changes in the country’s foreign exchange reserves. However it is not equivalent to the net change in the foreign exchange reserves during the same period. The principle for transactions between residents and non-residents does not apply to the preparation of statistics on foreign exchange settlement and sales by banks on behalf of clients; such statistics only cover RMB and foreign currency transactions between banks and their clients, namely, exchange transactions between RMB and foreign currencies, which fall outside the category of the balance-of-payments statistics. Contracts for Forward Settlement and Sale of Foreign Exchange refer to contracts for forward settlement (sales) of foreign exchange executed between banks and their clients through consultation, in which the foreign currency, amount, exchange rate, and term for the forward settlement (sales) of foreign exchange are agreed upon; where the foreign exchange is due to be received (paid), the foreign exchange settlement (sales) is to be handled on the basis of the foreign currency, amount, and exchange rate specified in such contracts. The forward foreign exchange settlement and sales business enables enterprises to lock in the exchange rate in advance for future foreign exchange settlement or sales and to effectively avoid the risk of changes in the RMB exchange rate. In general, the banks will hedge the risk exposure arising from the forward foreign exchange settlement and sales business on the inter-bank foreign exchange market. For example, where the total amount involved in the contracts for forward settlement of foreign exchange executed by banks is more than that of the contracts for forward sales of foreign exchange, the banks will generally sell an equivalent amount of foreign exchange in advance on the inter-bank foreign exchange market, and vice versa. Therefore, the forward settlement and sales of foreign exchange business is also a factor that affects changes in China ’s foreign exchange reserves. Foreign-related Receipts and Payments by Banks on Behalf of Clients refer to receipts and payment occurring between domestic non-bank resident institutions/individuals (collectively referred to as the “non-bank sector”) and non-resident institutions/individuals through domestic banks, exclusive of receipts and payments in cash and foreign-related receipts and payments by the banks themselves. In particular, they include cross-border receipts and payments between non-bank sectors and non-residents through domestic banks (including RMB and foreign exchange), and domestic receipts and payments between non-bank sectors and non-residents through domestic banks (temporarily excluding receipts and payments in RMB between domestic individual residents and domestic non-resident individuals). Statistics are collected at the time the clients conduct the foreign-related receipts and payments at the domestic banks. Specifically, foreign-related receipts of banks on behalf of clients refer to funds collected by non-bank sectors from non-residents via domestic banks; external payments by banks on behalf of clients refer to funds paid by non-bank sectors to non-residents through domestic banks. Although the foreign-related receipts and payments of banks on behalf of clients are an integral part of the balance-of-payments statistics, the accounting method for the statistics, unlike the accrual basis of accounting required by the balance of payments statistics, is based on a cash basis. In addition, they merely reflect fund flows between non-bank sectors and non-residents, and do not include barter transactions and foreign transactions conducted by the banks themselves. The scope of the statistics on the foreign-related receipts and payments of banks on behalf of clients is smaller than the scope of the balance-of-payments statistics. 2012-05-15/en/2012/0515/1045.html
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As of the end of 2011, China ’s outstanding external debt (excluding that of Hong Kong SAR, Macao SAR, and Taiwan Province ) reached USD694.997 billion. Specifically, the outstanding registered external debt totaled USD445.797 billion and the balance of trade credit between enterprises totaled USD249.2 billion. Among the outstanding external debt, the outstanding medium- and long-term external debt (with the remaining term) was USD194.096 billion; the outstanding short-term external debt (with the remaining term) was USD500.901 billion. Specifically, trade credit between enterprises and bank trade financing accounted for 49.75 percent and 24.26 percent of the outstanding short-term external debt respectively. The two accounted for 74.01 percent of the outstanding short-term external debt (with the remaining term). The data are closely related to the rapid growth of China ’s foreign trade during recent years. The outstanding debt of Chinese-funded financial institutions was USD211.953 billion, accounting for 47.54 percent of the outstanding registered external debt; the outstanding debt of foreign-funded enterprises was USD136.36 billion, accounting for 30.59 percent; the outstanding debt of foreign-funded financial institutions was USD54.054 billion, accounting for 12.13 percent; the outstanding sovereign debt borrowed by ministries under the State Council, the outstanding debt of Chinese enterprises, and the outstanding debt of other institutions were USD37.371 billion, USD5.925 billion, and USD134 million respectively. In terms of outstanding registered external debt, USD debt accounted for 75.94 percent, JPY debt 8.06 percent, Euro debt 7.49 percent, and debt in other currencies 8.51 percent. In terms of outstanding registered long- and medium-term external debt (based on contractual terms), borrowed money invested in the manufacturing industry accounted for 25.20 percent, the transportation, storage, and postal industry 13.35 percent, the electric power, coal gas, and water production and supply industry 7.67 percent, the real estate industry 4.87 percent, and the information technology service industry 3.65 percent. In 2011 China newly borrowed USD44.447 billion as medium- and long-term external debt, repaid USD33.165 billion as the principal of long- and medium-term external debt, and paid USD2.275 billion in interest. Net inflows under the outstanding long- and medium-term external debt totaled USD9.007 billion, down 24.85 percent on a year-on-year basis. According to preliminary calculations, in 2011 China ’s external debt/GDP ratio was 9.52 percent, its external debt/export revenue ratio was 33.31 percent, and its debt servicing ratio was 1.72 percent. The ratio of short-term external debt to foreign exchange reserves was 15.75 percent. All of these indexes are within the safe range of international standards. Annex: Glossary and relevant definitions Trade Credit between Enterprises refers to the external liability arising from directly extending credit between the seller and buyer of goods, specifically transactions between residents in Mainland China and foreign non-residents (including non-residents in Hong Kong SAR, Macao SAR, and Taiwan province), i.e., the debt incurred due to the difference between the time of payment and the time of the ownership transfer of the goods. Trade credit between enterprises includes credit directly provided by the supplier (e.g., the overseas exporter) for commodity transactions and services, and advance payments made by buyers (e.g., overseas importers) for goods, services, and on-going business (or business to be undertaken). Bank Trade Financing refers to loans related to trade extended by a third party (e.g., banks) to exporters or importers , for instance, loans extended by foreign financial institutions or export credit agencies to buyers. Trade-related Credit is a broad concept. In addition to trade credit between enterprises, it also includes other kinds of credit provided for trade activities. According to the definition, trade-related credit consists of trade credit between enterprises, bank trade financing, short-term notes related to trade, and so forth. External Debt/GDP Ratio refers to the ratio of the external debt balance as of the end of the year to the Gross Domestic Product of the current year. At present, the internationally accepted safety line for the External Debt/GDP Ratio is 20 percent. External Debt/Export Revenue Ratio refers to the ratio of the external debt balance as of the end of the year to the export revenue for trade in goods and services of the current year, which is calculated on the basis of the statistical coverage of the balance of payments. At present, the internationally accepted safety line for the External Debt/Export Revenue Ratio is 100 percent. Debt Servicing Ratio refers to the ratio of the repayment amount of the external debt principal and interest (the sum of the repayment amount for the principal and interest of the long- and medium-term external debt principal and the payment amount of the interest for the short-term external debt) to the export revenue for trade in goods and services of the current year, which is calculated on the basis of the statistical coverage of the balance of payments. At present, the internationally accepted safety line for the Debt Servicing Ratio is 20 percent. Ratio of Short-term External Debt to Foreign Exchange Reserves refers to the ratio of the outstanding short-term external debt of the remaining term to the reserve amount of foreign exchange controlled by the monetary authority. At present, the internationally accepted safety line for the Ratio of Short-term External Debt to Foreign Exchange Reserves is 100 percent. 2012-05-15/en/2012/0515/1044.html
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According to statistical data released by the State Administration of Foreign Exchange (SAFE), in January 2012 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD123.6 billion and USD104.2 billion respectively. The surplus of foreign exchange settlement and sales by banks on behalf of clients amounted to USD19.4 billion. During the same period, the total amount involved in contracts for forward settlement of foreign exchange with banks was USD11.1 billion, the total amount involved in contracts for forward sales of foreign exchange was USD7.7 billion, and the difference was USD3.4 billion in terms of the amount of net foreign exchange settlement. In January 2012, foreign-related receipts and payments by domestic banks on behalf of clients amounted to USD183.2 billion and USD156.7 billion respectively, and the surplus of foreign-related receipts and payments reached USD26.5 billion. Annex: Glossary and relevant definitions The Balance of Payments refers to all economic transactions occurring between residents and non-residents in China , including all financial transactions and barter transactions resulting in changes in the assets and liabilities of residents and non-residents. Foreign exchange settlement and sales by banks refer to settlement and sales conducted by designated foreign exchange banks for their clients or for themselves, excluding data on transactions on the inter-bank foreign exchange market. Foreign exchange settlement and sales by banks on behalf of clients (including foreign exchange settlement and sales by banks) refer to settlement and sales by designated foreign exchange banks for their clients. The time of conversion between RMB and the foreign currency is regarded as the time-point for the statistics on the foreign exchange settlement and sales by banks, Specifically, foreign exchange settlement refers to the sale of foreign exchange to designated foreign exchange banks by owners of foreign exchange; foreign exchange sales refer to the sale of foreign exchange by designated foreign exchange banks to users of foreign exchange. The differences between foreign exchange settlement and sales are regarded as an offset balance. Such differences, which will be offset by the banks through transactions on the inter-bank foreign exchange market, function as a major factor resulting in changes in the country’s foreign exchange reserves. But they are not equivalent to the net change in foreign exchange reserves during the same period. The principle for transactions between residents and non-residents does not apply to the preparation of statistics on foreign exchange settlement and sales by banks on behalf of clients, and such statistics only cover transactions of RMB and the foreign currency between the banks and their clients, namely, exchange transactions between RMB and the foreign currency that fall outside the category of the balance-of-payments statistics. Contracts for forward settlement and sales of foreign exchange refer to the contracts for forward settlement (sales) of foreign exchange executed between the banks and their clients through consultation, in which the foreign currency, amount, exchange rate, and term for the forward settlement (sales) of foreign exchange are agreed upon; where the foreign exchange is to be received (paid), the foreign exchange settlement (sale) is to be handled on the basis of the amount of foreign currency and the exchange rate specified in such contracts. The forward foreign exchange settlement and sales business enables enterprises to lock into the exchange rate in advance for future foreign exchange settlement or sales and effectively avoid the risk of RMB exchange rate changes. Generally, banks will hedge the risk exposure arising from the forward foreign exchange settlement and sales business through the inter-bank foreign exchange market. For example, where the total amount involved in the contracts for forward settlement of foreign exchange executed by banks is more than that in the contracts for forward sales of foreign exchange, the banks will generally sell an equivalent amount of foreign exchange in advance on the inter-bank foreign exchange market, and vice versa. Therefore, the forward settlement and sales of foreign exchange business is also a factor that affects changes in the foreign exchange reserves in China . Foreign-related receipts and payments by banks on behalf of their clients refers to receipts and payments occurring between domestic non-bank resident institutions/individuals (collectively called the “non-bank sector”) and non-resident institutions/individuals through domestic banks, exclusive of the receipts and payments in cash and foreign-related receipts and payments by the banks themselves; in particular, cross-border receipts and payments between non-bank sectors and non-residents through domestic banks (including RMB and foreign exchange), and domestic receipts and payments between non-bank sectors and non-residents through domestic banks (temporarily excluding receipts and payments in RMB between domestic individual residents and domestic non-resident individuals). Statistics are collected at the time when the clients conduct the foreign-related receipts and payments at the domestic banks. Specifically, foreign-related receipts of banks on behalf of clients refer to funds collected by non-bank sectors from non-residents via domestic banks; external payments by banks on behalf of clients refer to funds paid by non-bank sectors to non-residents through domestic banks. Although the foreign-related receipts and payments of banks on behalf of clients are an integral part of the balance-of-payments statistics, the accounting method for the statistics, different from the accrual basis of accounting required by the balance-of- payments statistics, is based on a cash basis. In addition, it merely reflects fund flows between the non-bank sectors and non-residents and does not include barter transactions or foreign transactions conducted by the banks themselves. Furthermore, the scope of the statistics on foreign-related receipts and payments of banks on behalf of clients is smaller than the scope of the balance-of-payments statistics. 2012-04-16/en/2012/0416/1042.html
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According to statistical data released by the State Administration of Foreign Exchange (SAFE), in November 2011 the amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD128.9 billion and USD129.7 billion, respectively. The deficit in foreign exchange settlement and sales by banks on behalf of clients amounted to USD800 million. For the first eleven months of 2011, the cumulative amount of foreign exchange settlement and sales by banks on behalf of clients amounted to USD1455.3 billion and USD1072.2 billion respectively. The surplus of foreign exchange settlement and sales was USD383.1 billion. In November 2011, foreign-related receipts and payments by domestic banks on behalf of clients amounted to USD210.8 billion and USD192.9 billion, respectively, and the surplus of foreign-related receipts and payments reached USD17.9 billion. For the first eleven months of 2011, the cumulative foreign-related receipts and payments by banks on behalf of clients amounted to USD2107.5 billion and USD1830.7 billion respectively; and the surplus of the cumulative foreign-related receipts and payments reached USD276.8 billion. Annex: Glossary and relevant definitions The Balance of Payments refers to all economic transactions occurring between residents and non-residents in China, including all financial transactions and barter transactions resulting in changes in the assets and liabilities of the residents and non-residents. Foreign exchange settlement and sales by banks on behalf of clients refers to the business of foreign exchange settlement and sales conducted by designated foreign exchange banks for their clients, excluding data on foreign exchange settlement and sales conducted by designated foreign exchange banks on their own behalf or data on inter-bank foreign exchange market transactions. The time when the conversion between the Renminbi and the foreign currency occurs is regarded as the time point for the statistics. Specifically, foreign exchange settlement refers to the sale of foreign exchange to designated foreign exchange banks by owners of foreign exchange; foreign exchange sales refer to the sale of foreign exchange by designated foreign exchange banks to users of foreign exchange. The differences between the foreign exchange settlement and sales are regarded as an offset balance, which will be balanced by the banks through transactions on the inter-bank foreign exchange market. This is the major reason for changes in the amount of foreign exchange reserves, which is not equivalent to the net change in foreign exchange reserves during the same period. The principles for transactions between residents and non-residents do not apply to the preparation of statistics on foreign exchange settlement and sales by banks on behalf of clients, and such statistics only cover transactions of RMB and foreign currencies between the banks and their clients, namely, exchange transactions between RMB and foreign currencies that fall outside the category of the balance-of-payments statistics. Foreign-related collections and payments by banks on behalf of their clients refers to the collections and payments between domestic non-bank resident institutions/individuals (collectively called the “non-bank section”) and non-resident institutions/individuals through domestic banks, exclusive of the collections and payments in cash or the foreign-related collections and payments by the banks themselves -- in particular, cross-border receipts and payments between non-bank sectors and non-residents through domestic banks (including RMB and foreign exchange), and domestic receipts and payments between non-bank sectors and non-residents through domestic banks (currently including receipts and payments in foreign exchange and receipts and payments in RMB under the RMB settlement item for cross-border trade). The statistics are collected at the time when the clients conduct the foreign-related receipts and payments at the domestic banks. Specifically, foreign-related receipts of banks on behalf of clients refer to funds collected by non-bank sectors from non-residents via domestic banks; external payments by banks on behalf of clients refers to funds paid by non-bank sectors to non-residents via domestic banks. Although foreign-related receipts and payments of banks on behalf of clients are an integral part of the balance-of-payments statistics, the accounting method for the statistics, different from the accrual basis of the accounting required for the balance-of- payments statistics, is based on a cash basis. In addition, it merely reflects fund flows between the non-bank sectors and non-residents and does not include barter transactions and foreign transactions conducted by the banks themselves. Furthermore, the scope of the statistics on the foreign-related receipts and payments by banks on behalf of clients is smaller than the scope of the balance-of-payments statistics. 2012-03-26/en/2012/0326/1032.html
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The SAFE recently released China ’s Balance of Payments Statements for the third quarter and the first three quarters of 2011. In Q3 of 2011 the current account and the capital and financial account continued to post a “twin surplus” and international reserves maintained a growing momentum. The surplus under the current account totaled USD53.4 billion. Specifically, according to the statistical coverage of the balance of payments, the surpluses in goods and current transfers reached USD85.3 billion and USD4.9 billion, respectively, whereas the deficit in trade in services and income amounted to USD20.3 billion and USD16.4 billion, respectively. Meanwhile, China ’s surplus under the capital and financial account (excluding net errors and omissions) totaled USD66.2 billion. In particular, net inflows of direct investments, portfolio investments, and other investments amounted to USD28.7 billion, USD9.9 billion, and USD26.2 billion, respectively. International reserves registered an increase of USD91.7 billion (exclusive of changes in the value of non-transaction factors such as exchange rates and prices). Specifically, foreign exchange reserve assets posted an increase of USD92.1 billion. In the first three quarters of 2011, the surplus under the current account was USD141.2 billion and that under the capital and financial account (excluding net errors and omissions) was USD250.1 billion. China ’s international reserve assets posted an increase of USD375.4 billion. FILE: attachment 1：Balance of Payments, Third Quarter of 2011 FILE: attachment2：Balance of Payments, First Three Quarters of 2011 2012-03-26/en/2012/0326/1033.html
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The SAFE recently released preliminary data on China ’s Balance of Payments Statement for the first quarter of 2012. In Q1 of 2012 the current account and the capital and financial account posted a “twin surplus” and international reserves maintained a growing momentum. In Q1, the surplus under the current account totaled USD24.7 billion. Specifically, according to the statistical coverage of the balance of payments, the surplus in goods, income, and current transfers reached USD21.7 billion, USD18.5 billion, and USD2.7 billion, respectively, whereas the deficit in trade in services amounted to USD18.2 billion. Meanwhile, China ’s surplus under the capital and financial account (including net errors and omissions) totaled USD49.9 billion. In particular, net inflows of direct investments amounted to USD44.1 billion. International reserve assets posted an increase of USD74.6 billion. Specifically, transactions in foreign exchange reserve assets registered an increase of USD74.8 billion (exclusive of the influence of non-transaction changes in value such as exchange rates and prices), the reserve position in the IMF registered a drop of USD400 million, and special drawing rights registered a rise of USD200 million. Balance of Payments for Q1, 20121 (Preliminary Data) Unit: USD100 million Item # Q1 of 2012 I. Current Account 1 247 A. Goods and Services 2 35 a. Goods 3 217 Credit 4 4314 Debit 5 4097 b. Services 6 -182 Credit 7 436 Debit 8 618 B. Income 9 185 C. Current Transfers 10 27 II. Capital and Financial Account2 11 499 Incl. Direct Investments 12 441 III. Reserves Asset 13 -746 3.1 Monetary Gold 14 0 3.2 Special Drawing Rights 15 -2 3.3 Reserves Position in the Fund 16 4 3.4 Foreign Exchange 17 -748 3.5 Other Claims 18 0 Notes: 1. This statement employs rounded-off numbers. 2. The data under the capital and financial account in this statement represent the balance between the current account balance and the amount of change in reserve assets, including net errors and omissions. 2012-05-15/en/2012/0515/1050.html
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The SAFE recently released China’s balance of payments statement for the fourth quarter and the year 2011, revised and released data on China’s Balance of Payments Statement for each quarter and the year 2010 according to the updates on the undistributed profits of foreign-funded enterprises for the year 2010, and so forth. In the fourth quarter of 2011 the current account posted a surplus whereas the capital and financial account posted a deficit. International reserves maintained a growing momentum. The surplus under the current account totaled USD60.5 billion. Specifically, according to the statistical coverage of the balance of payments, the surpluses in goods, income, and current transfers reached USD70.6 billion, USD2.7 billion, and USD2.3 billion, respectively, whereas the deficit in trade in services amounted to USD15.2 billion. Meanwhile, China ’s deficit under the capital and financial account totaled USD29 billion. In particular, net inflows of direct investments, portfolio investments, and net outflows of other investments amounted to USD49 billion, USD1.3 billion, and USD80.5 billion respectively. International reserves registered an increase of USD12.4 billion (exclusive of changes in the value of non-transaction factors such as exchange rates and prices). Specifically, foreign exchange reserve assets posted an increase of USD11.7 billion. For the year 2011, the surplus under the current account was USD201.7 billion and the surplus under the capital and financial account was USD221.1 billion, whereas international reserves registered an increase of USD387.8 billion. In addition, the BOP Analysis Team of the SAFE released China ’s Balance of Payments Report for 2011 in order to facilitate understanding among all groups in society about the data and analysis of China ’s balance of payments. 2012-05-15/en/2012/0515/1047.html
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At the end of March 2011, China's outstanding external debt (excluding that of Hong Kong SAR, Macao SAR, and Taiwan Province) reached USD585.97 billion. Specifically, the outstanding registered external debt reached USD366.87 billion and the balance of trade credit totaled USD219.1 billion. With respect to the term structure, the outstanding long- and medium-term external debt (with the remaining term) was USD174.32 billion, accounting for 29.75 percent of the total outstanding external debt. The outstanding short-term external debt (with the remaining term) was USD411.65 billion, accounting for 70.25 percent of the outstanding external debt. Specifically, the outstanding registered short-term external debt (with the remaining term) was USD192.55 billion and the balance of trade credit was USD219.1 billion. In terms of the composition of the short-term external debt, at the end of March 2011 the balance of trade-related credit was USD311.45 billion, accounting for 76 percent of the outstanding short-term external debt (with the remaining term). Specifically, the trade credit and trade financing accounted for 53 percent and 23 percent respectively. As the trade-related credit is based on the real import and export trade, all external payments are conducted under the item of trade and do not constitute additional payments. The growth of such payments is basically consistent with that of the import and export trade in China; therefore, the increase in the proportion of this short-term external debt will not affect the security of Chinas external debt. In terms of types of debtors, the outstanding debt of Chinese-funded financial institutions was USD156.266 billion, accounting for 42.59 percent of the outstanding registered external debt; the outstanding debt of foreign-funded enterprises was USD114.929 billion, accounting for 31.33 percent; the outstanding debt of foreign-funded financial institutions was USD50.539 billion, accounting for 13.78 percent; the outstanding sovereign debt borrowed by ministries under the State Council was USD39.161 billion, accounting for 10.67 percent; the outstanding debt of Chinese-funded enterprises was USD5.844 billion, accounting for 1.59 percent; and the outstanding debt of other institutions was USD131 million, accounting for 0.04 percent. In terms of the types of debts, the balance of international commercial loans amounted to USD299.023 billion, accounting for 81.51 percent of the outstanding registered external debt, representing an increase of 1.53 percentage points from that at the end of 2010. The balance of foreign government loans and loans granted by international financial organizations amounted to USD67.847 billion, accounting for 18.49 percent. In terms of the currency structure, the debt in U.S. dollars accounted for 68.3 percent of the outstanding registered external debt, representing a decline of 2.11 percentage points compared with that at the end of 2010. Debt in Japanese yen accounted for 7.68 percent, representing a decline of 0.88 percentage point compared with that at the end of 2010. Debt in euro accounted for 4 percent, representing a decline of 0.41 percentage point compared with that at the end of 2010. Other kinds of debts, including SDRs and HKD, accounted for 20.02 percent, a rise of 3.4 percentage points compared with that at the end of 2010. In terms of the sectoral distribution with reference to the Industrial Classifications of the National Economy, USD47.841 billion was invested in the manufacturing sector, accounting for 23.01 percent of the medium- and long-term outstanding registered external debt (based on contract terms); USD26.261 billion was invested in the communications and transportation sector, the warehousing sector, and the postal-services sector, accounting for 12.63 percent of the total; USD17.356 billion was invested in the production and supply of electricity, coal gas, and water, accounting for 8.35 percent; USD8.142 billion was invested in the information technology services sector, accounting for 3.92 percent; and USD10.594 billion was channeled to the real estate sector, accounting for 5.1 percent. From January to March 2011, the medium- and long-term external debt totaled USD14.099 billion, a year-on-year increase of USD5.948, or 72.97 percent. The principal repayment was USD4.599 billion, a year-on-year decrease of USD1.035 billion, or 18.37 percent. The interest payment was USD460 million, a year-on-year decrease of USD234 million, or 33.71 percent. 2011-07-07/en/2011/0707/1002.html