-
附件：9月5日人民币汇率中间价及人民币对美元汇率变动表 2019-09-05/ningbo/2019/0905/1147.html
-
The State Administration of Foreign Exchange (SAFE) held a press conference on Thursday, July 18, 2019 and answered press questions about the foreign exchange receipts and payments for the first half of 2019. Moderator Liu Fang: Good morning, friends from the media. Welcome to today's press conference on foreign exchange receipts and payments data for the first half of 2019. I’m Liu Fang, deputy director of the General Affairs Department, and I will host today's press conference. It is a great honor today to have Ms. Wang Chunying with us, who is the spokesperson, chief economist and director of Balance of Payments Department of the SAFE. Next, she will brief us on the foreign exchange receipts and payments data for the first half of 2019. 2019-07-18 10:23 Wang Chunying: Good morning, everyone. It’s a great pleasure for me to attend today's press conference. Now I would like to disseminate the information about China's foreign exchange receipts and payments for the first half of 2019 and then I will be taking your questions. 2019-07-18 10:23 Wang Chunying: In the first half of 2019, global economic growth slowed down and factors of instability and uncertainty increased. China's economy continued to operate within a reasonable range, maintained a steady and good momentum of development, and major economic indicators met expectations. The RMB exchange rate against the USD fluctuated in both directions, and the exchange rate expectation was relatively stable. Overall, in the first half of 2019, China's cross-border capital flows remained stable, and supply and demand in the domestic foreign exchange market were basically balanced. 2019-07-18 10:28 Wang Chunying: Banks settled foreign exchange in the amount of RMB 6.03 trillion (equivalent to USD 888.3 billion) and sold foreign exchange in the amount of RMB 6.25 trillion (equivalent to USD 921.6 billion) for the first half of 2019, with a deficit of RMB 224.8 billion (equivalent to USD 33.2 billion). The data on banks' foreign-related receipts and payments for customers show that banks' foreign-related receipts for customers amounted to RMB 11.80 trillion (equivalent to USD 1.74 trillion), and their external payments hit RMB 11.58 trillion (equivalent to USD 1.71 trillion), representing a surplus of RMB 210.8 billion (equivalent to USD 31.2 billion). 2019-07-18 10:29 Wang Chunying: China's foreign exchange receipts and payments present the following characteristics in the first half of the year: First, the deficit of foreign exchange settlement and sales by banks has narrowed, and the overall balance of foreign-related receipts and payments by banks for customers recorded a surplus. In the first half of 2019, banks registered a deficit of USD 33.2 billion in USD terms in foreign exchange settlement and sales, which narrowed by 52% from the average monthly deficit in the second half of 2018; Foreign-related receipts and payments of banks for customers registered a surplus of USD 31.2 billion in the first half of 2019, while the second half of 2018 recorded a deficit. 2019-07-18 10:30 Wang Chunying: Second, the supply and demand of foreign exchange market maintained basic balance. In the first half of this year, although the banks' foreign exchange settlement and sales were in deficit, if other supply and demand factors such as forward exchange settlement and sales as well as option transactions are taken into consideration, the supply and demand in the foreign exchange market were basically balanced. Based on the situations in May and June after the China-US economic and trade frictions were escalated, the foreign exchange settlement and sales of banks recorded an average monthly deficit of USD 6.6 billion, down by 44% from that of the second half of 2018, indicating that the supply and demand situations are satisfactory. The monthly fluctuations are mainly affected by foreign exchange settlement when RMB exchange rate is high and foreign exchange purchase when RMB exchange rate is at low level by market players, reflecting the overall stability of market expectations and the market-based adjustment function of price. 2019-07-18 10:31 Wang Chunying: Third, the foreign exchange sales rate remained stable, and enterprises' domestic foreign exchange loans and cross-border financing increased steadily. In the first half, the foreign exchange sales rate that measures the willingness to buy foreign exchange, or the ratio of foreign exchange purchased by customers from banks to the customer's foreign-related foreign exchange payments was 66.8%, a slight decrease of 0.3 percentage point from the second half of 2018. Meanwhile, the domestic and overseas foreign exchange financing of enterprises increased steadily on the whole. By the end of June 2019, the domestic foreign exchange loan balance of Chinese banks increased slightly by USD 2.9 billion from the end of the previous year, while the balance declined by USD 59.9 billion in the second half of 2018. In the first half of 2019, the balance of cross-border financing in foreign currencies for imports such as overseas payment on behalf of enterprises and usance letter of credit increased by USD 17.2 billion from the end of the previous year, while the balance in the second half of 2018 registered a decline of USD 13.2 billion. 2019-07-18 10:31 Wang Chunying: Fourth, the foreign exchange settlement rate remained basically stable, and market players' willingness to hold foreign exchange declined on the whole. In the first half, the foreign exchange settlement rate that measures the desire to settle foreign exchange, or the foreign exchange sold by customers to banks as a percentage of their foreign-related foreign exchange income, was 64%, a slight decrease of 0.9 percentage point from the second half of 2018. Foreign exchange deposits of enterprises and individuals declined. As of the end of June 2019, the balance of domestic foreign exchange deposits of banks dropped by USD 6.3 billion from the end of 2018. 2019-07-18 10:32 Wang Chunying: Fifth, banks’ forward settlement and sales of foreign exchange posted a big surplus. The contracted forward settlement and sales of foreign exchange of banks with customers registered a surplus of USD 77.7 billion in the first half of this year, but posted a deficit of USD 24.8 billion and USD 3.5 billion respectively in the first half and second half of 2018 respectively. Specifically, the contracted surplus of forward settlement and sales of foreign exchange was USD 34.5 billion and USD 43.2 billion in the first quarter and second quarter of 2019 respectively. 2019-07-18 10:32 Wang Chunying: Sixth, the overall balance of China's foreign exchange reserves rose on the whole. As at the end of June 2019, the balance of China's foreign exchange reserves was USD 3.1192 trillion, up by USD 46.5 billion from the end of 2018. 2019-07-18 10:32 Wang Chunying: These are the major statistical data I want to unveil regarding foreign exchange receipts and payments for the first half. Now I will answer your questions. 2019-07-18 10:33 CCTV News Center: How do you evaluate the situations of cross-border capital flows in China in the first half of this year? There are still many uncertainties in the external environment in the second half of the year. Then, what about the trend of cross-border capital flows in the second half of the year? 2019-07-18 11:08 Wang Chunying: In the first half of this year, despite the complex and volatile external environment, the operation of China's foreign exchange market was smooth on the whole, and cross-border capital flows through major channels showed a positive development trend. There are several comments as follows. First, the supply and demand in the foreign exchange market became more balanced. The main indicators of the foreign exchange market are all relatively stable, and the data I have just reported show this feature as well. For example, the deficit of banks in foreign exchange settlement and sales narrowed compared with that in the second half of 2018, cross-border receipts and payments posted a surplus on the whole, and foreign exchange reserves rose steadily. Second, the balance of payments maintained basic equilibrium. Based on the data we have released, the current account maintained a surplus of USD 49 billion in the first quarter of 2019, accounting for 1.5% of GDP, and the financial account excluding reserve assets registered a surplus of USD 48.8 billon in the first quarter. Third, overseas funds continued to show a net inflow. According to statistics from the Ministry of Commerce, in the first half of this year, China's actual utilization of foreign capital increased by 7% year on year, up by 6.1 percentage points from the same period in 2018. According to the SAFE, the net holdings of domestic bonds and listed stocks by foreign investors increased by USD 49.3 billion from January to June, including USD 41.6 billion in bonds and USD 7.8 billion in stocks. Fourth, outbound investment and profit repatriation of enterprises were stable and orderly. In the first half of this year, China's outbound direct investment increased slightly by 0.1% year on year, according to the statistics of the Ministry of Commerce. According to statistics of the SAFE, the cross-border payments under investment income of enterprises in the first half of this year was basically the same as that in the first half of 2018. Fifth, the foreign exchange settlement and sales for individuals was basically stable. In the first half of the year, the net purchase of foreign exchange by individuals fell by 23% year on year. Therefore, we could give the following overall evaluation of China's foreign exchange market, or the overall evaluation of cross-border capital flows in the first half of this year, i.e., despite the complex and volatile external environment, the operation of China's foreign exchange market remained stable, and the cross-border capital flows through major channels showed a positive development trend. 2019-07-18 11:08 Wang Chunying: It is expected that cross-border capital flows will remain stable in the second half of this year. There are still some uncertainties in the external environment, for example, with respect to the outlook for world economic growth, the World Bank recently lowered its forecast for global economic growth of this year from that of January; and there are unstable and uncertain factors such as global trade protectionism and geopolitical situations. However, in the current internal and external environment, there are still many factors that are conducive to the stability of China's cross-border capital flows. 2019-07-18 11:09 Wang Chunying: First, the international monetary environment is relatively loose. The FED is likely to cut interest rates, while central banks in Europe and Japan are also taking a looser stance on monetary policy. Recently, both developed and developing countries have made some moves to ease their monetary policy. Under such circumstances, the recent stabilization of the USD exchange rate and widening of the interest rate differential between China and the US provide more favorable conditions for the stability of China's foreign exchange market. 2019-07-18 11:10 Wang Chunying: Second, market expectations for the Chinese economy are stable. We observe some facts about the price of credit default swaps, or CDS, on Chinese government debts traded in the international market. The higher the CDS, the higher the market believes the default risk is, and the lower the price, the lower the market thinks the default risk is. Recently, the value is over 40, while it was 60+ at the end of last year, and it approached 150 at the beginning of 2016. Therefore, the current market expectation on the Chinese economy is relatively stable, and the international market is more optimistic about the Chinese economy on the whole. 2019-07-18 11:10 Wang Chunying: Third, the domestic market has become more open. Recently, China has introduced many policies and measures, such as the Foreign Investment Law, revised the negative list for foreign investment access, and issued the new Catalogue of Encouraged Industries for Foreign Investment etc. In addition, China has constantly promoted the liberalization and facilitation of investment and strengthened investment protection. Meanwhile, the capital market has become increasingly internationalized, and the domestic stock market and bond market are included in a broader range of international mainstream index, which reflects the recognition of the Chinese market by international investors. 2019-07-18 11:11 Wang Chunying: Fourth, the two-way fluctuations in the RMB exchange rate have played a role in fostering rational market expectations. Enterprises have become more adaptable to the exchange rate fluctuations, and the settlement and sales of foreign exchange by individuals has become more stable. 2019-07-18 11:12 Wang Chunying: Fifth, the framework for managing cross-border capital flows is increasingly mature. In recent years, we have gained abundant experience in macro-prudential management, and improved our management of overseas investment, onshore guarantees for offshore loans etc. Meanwhile, we have continued to crack down on violations of laws and regulations on foreign exchange, intensified efforts to report typical cases, and effectively maintained the sound order in the foreign exchange market. 2019-07-18 11:12 Wang Chunying: In the second half of this year, there are many factors conducive to the smooth operation of China's cross-border capital flows, both international and domestic. China has adequate internal and external conditions for the smooth operation of cross-border capital flows, and it can better cope with the impact of various external shocks. 2019-07-18 11:12 China News Service: As compared with the previous period, how has the impact and pressure of the recent China-US economic and trade frictions on our cross-border capital flow changed? 2019-07-18 11:29 Wang Chunying: We have been always paying close attention to and monitoring the China-US economic and trade frictions and assessing their impact on China's foreign exchange market, cross-border capital flows and balance of payments. We have compared the situations in May and June this year against that of the second half of 2018. According to the results, the impact of China-US economic and trade frictions on cross-border capital flows in China is controllable on the whole. It’s mainly reflected in the following two aspects: first, the sentiment in China's foreign exchange market and the behavior of market players are more rational and stable. After economic and trade frictions escalated in May this year, the depreciation range and depreciation expectations of the RMB exchange rate against the USD were both lower than that in the second half of last year. On this basis, the adjustment of market players' foreign-related receipts and payments was more stable. Based on the comprehensive situations of May and June, the monthly average deficit of bank's foreign exchange settlement and sales in these two months narrowed by 44% from that in the second half of 2018, and the monthly average deficit of bank's foreign-related receipts and payments for customers was also narrower by 38% than that in the second half of 2018. 2019-07-18 11:30 Wang Chunying: Second, despite the imposition of additional tariffs, China's overall balance of payments situation remains stable and controllable. From the second half of last year till now, the United States have gradually escalated measures to impose additional tariffs to China’s exports. However, China's balance of payments has remained stable on the whole. As we mentioned just now, the current account posted a surplus of USD 49 billion in the first quarter, while the average quarterly surplus of the second half last year was USD 38.9 billon. We could see that the surplus under the current account of the first quarter this year is much higher than the average quarterly surplus of the second half of last year. In the first quarter, the financial account excluding reserve assets registered a surplus of USD 48.8 billon. Direct investment, portfolio investment and other investments all recorded a surplus. The surplus of the financial account excluding reserve assets in the third quarter last year reached USD 14 billion, while the fourth quarter of last year registered a slight deficit of USD 12.3 billion. We also observed the behavior of micro players. From the perspective of micro players, first, the direct investment of the US enterprises in China has remained steady, indicating the close economic and trade ties between China and the United States. According to the statistics of the Ministry of Commerce, the direct investment of the United States in China in the first five months of this year was up by 4% from the same period last year. A recent survey by the American Chamber of Commerce in Shanghai found that more than 80 percent of the US enterprises are optimistic about their prospects in China in the next five years. Second, Chinese enterprises have actively responded to the impact of the additional tariffs and sought to diversify their exports. According to customs statistics, China's exports to Non-US countries accounted for 83% of total exports in the first six months of this year, up by 1.5 percentage points year on year. 2019-07-18 11:31 Wang Chunying: In general, China's foreign exchange market sentiment has become more stable against the backdrop of China-US economic and trade frictions. Meanwhile, China has continued to make innovation and improve macro control, attach importance to pre-emptive adjustment and fine-tuning of policies and measures, constantly deepen reform and open wider to the outside world. Domestic enterprises and other market players are also actively responding to relevant changes. In addition, the exchanges between Chinese and the US enterprises are still very active, and this close economic and trade exchanges are playing a positive role. All these show that we are confident to cope with the changing situations and maintain the stability of China's cross-border financial flows. 2019-07-18 11:32 Economic Daily: The current account continued to register a surplus in the first quarter of 2019. What are the main sources of the surplus? Could you brief us on situations of the second quarter? How do you view the future trend? 2019-07-18 11:33 Wang Chunying: China has maintained a surplus under the current account this year. As mentioned several times just now, the current account recorded a surplus of USD 49 billion in the first quarter of this year, or 1.5% of GDP, while the same period last year registered a slight deficit. For the main sources of the surplus under the current account in the first quarter, we can observe the changes in several major items. First, the surplus of trade in goods increased rapidly. In the first quarter, the surplus of trade in goods as recorded by balance of payments was USD 94.7 billion, up by 83% year on year. Second, the deficit of trade in services narrowed. In the first quarter, the deficit of trade in services was USD 63.4 billion, down by 14% year on year, of which, the deficit in tourism was USD 57.6 billion, down by 9%. Third, the primary income registered a surplus of USD 15.6 billion, mainly due to the surplus of investment income. Specifically, income of China's various outbound investments, such as profits, interests and dividends, totaled USD 62.9 billion, up by 31% year on year. We preliminarily estimate that the current account will remain in surplus in the second quarter. We publish the balance-of-payments figures on the SAFE’s official website for trade in goods and services on a monthly basis, and these two items can basically reflect the general situations of the current account. According to the data released by us in April and May, the surplus under the trade in goods totaled USD 70.7 billion, up by 30% year on year. The trade in services registered a deficit of USD 46.2 billion, down by 11% from a year earlier, including a 9% decline in the deficit in tourism, roughly the same as that in the first quarter. According to our preliminary judgment based on these data, the current account in the balance of payments remained in surplus in the second quarter of this year. 2019-07-18 11:33 Wang Chunying: The current account is expected to remain within a reasonable range for the whole year, and a small surplus is likely to continue. First of all, it should be noted that a small surplus or deficit under the current account is considered to be within a reasonable range of basic equilibrium. In the medium and long term, China's current account still has the basis and conditions to maintain a reasonable level. There are several supporting factors. First, the added value of China's manufacturing industry ranks the first in the world. Since the founding of the New China 70 years ago, especially since the reform and opening up 40 years ago, China has gradually formed a complete and independent industrial system. Moreover, the added value of high-tech manufacturing industry has been constantly increasing as a percentage of the total added value, up by 1.2 percentage points in 2018 from the 2017 level to reach 14%. It indicates that China's manufacturing transformation and upgrade is making steady progress, which is conducive to enhancing the competitiveness of export products. Second, China's position in the global industrial chain is relatively stable. Domestic industrial chain is very complete from upstream to downstream, the supporting facilities are adequate, skilled workers are sufficient, labor productivity has continued to improve, and the comparative advantage is still relatively strong. Third, although China's savings rate has fallen, it is still among the highest in major economies of the world. A high savings rate is conducive to maintaining a basically balanced current account. In addition, the current deficit under the trade in services has narrowed and investment income has improved, providing more support for maintaining the surplus under the current account this year. 2019-07-18 11:34 CBN Daily: What would you say about the external debt situation in China? In recent years, China's external debt has continued to increase, is there any risk? 2019-07-18 11:57 Wang Chunying: People are also concerned about the issue of external debt. First of all, we’d like to exchange with you our views on external debt from a broader perspective, and observe China's external claims and external debt in the meantime. 2019-07-18 11:57 Wang Chunying: With the increasingly close ties between China's economy and the global economy, the overall rise of external debt and external claims is a normal development process. Based on the data of international investment position in recent years, by the end of the first quarter of 2019, the balance of all China's external financial liabilities had increased by 12% from the end of 2014, among which the balance of full-scale external debt had increased by 11%. In the same period, the balance of external financial assets increased by 15%, indicating that China's economy is more deeply integrated into the global economy and the scale of cross-border investment and financing has been steadily increased. Overall, China continues to post net external assets, with the balance of net assets at the end of the first quarter up by 22% from the end of 2014. 2019-07-18 11:57 Wang Chunying: In terms of the external debt itself, the structure of China's external debt has been further optimized and become more stable. I'd like to share our observations from two perspectives. From the perspective of the term structure, at the end of the first quarter of 2019, the outstanding medium and long-term external debt increased by 49% from the end of 2014, accounting for 36% of the total external debt, up by 9 percentage points from the end of 2014. Over the same period, the outstanding short-term external debt fell by 4%. From the perspective of debt instruments, at the end of the first quarter, the outstanding debt securities tripled that at the end of 2014, accounting for 23%, and increased by 15 percentage points compared with that at the end of 2014. This reflects the need of overseas investors to diversify their asset allocation and the demand of overseas central bank institutions to increase their holdings of RMB reserve assets. According to recent data released by the International Monetary Fund, RMB assets accounted for 1.95% of foreign exchange reserves held by central banks of various countries at the end of the first quarter of 2019, the highest level since the release of RMB reserve assets data in 2016. At present, the proportion of holdings by overseas investors in the domestic bond and stock markets is relatively low, only about 2% or 3%. It will increase in the future, and the stability of debt securities will remain relatively high. Moreover, according to historical experience, there was a small increase in debt securities in 2015 when the external debt fell back. 2019-07-18 11:58 Wang Chunying: From the perspective of the main safety indicators of external debt, China's external debt risk is generally controllable. For example, the external debt ratio, i.e., the ratio of the outstanding external debt to GDP, was 14.4% at the end of 2018 in China, while the internationally accepted safe level was 20%. The debt ratio, i.e., the ratio of the outstanding external debt to the export income of goods and services in the balance of payments, is 74.1% in China while the internationally accepted safe level is 100%. The debt servicing ratio, which refers to the ratio of the total medium- and long-term external debt servicing amount to the export income of goods and services in the balance of payments, is 5.5% in China, while the internationally accepted safe level is 20%. Another indicator is the ratio of short-term external debt to foreign exchange reserves. This ratio is 41.4% in China while the internationally accepted safe level is 100%. Based on these safety indicators, China's current external debt indicators are all within the internationally accepted safe range, and these indicators are all lower than the overall level of developed countries and emerging market countries. 2019-07-18 12:00 China Securities Journal: At the G20 Osaka Summit, President Xi announced the important measures to further open up China to the outside world. In the second half of the year, what new ideas and measures will the SAFE introduce with respect to the foreign exchange administration reform and opening up? 2019-07-18 12:05 Wang Chunying: At the G20 Summit, President Xi proposed to move faster to open up to the outside world and strive to achieve high-quality development. The SAFE will earnestly implement the spirit of President Xi’s speech and adhere to two basic considerations in relevant work: The first is to deepen the reform of foreign exchange administration, promote the two-way opening up of financial markets and serve the new pattern of comprehensive opening up in China. The second is to maintain the stability of the foreign exchange market, guard against the risk of cross-border capital flows, safeguard the security, liquidity, value preservation and appreciation of foreign exchange reserves, and safeguard the national economic and financial security. Specifically, there are several major relevant measures. First, efforts will be made to further promote the liberalization and facilitation of cross-border trade and investment. Firstly, foreign exchange administration policies will be optimized and innovation in trade patterns will be given further support. Secondly, efforts will be made to further facilitate foreign-invested enterprises to transfer funds, and support qualified and capable Chinese enterprises to make authentic and compliant outbound investments. Thirdly, active support will be given to pilot free trade zones, the Guangdong-Hong Kong-Macao Great Bay Area and the XiongAn New Area for taking the lead in pilot implementation of foreign exchange administration reform, and efforts will be made to support Hainan in comprehensively deepening reform and opening up. 2019-07-18 12:05 Wang Chunying: Second, the opening up of capital accounts will be steadily promoted. We will take into account the requirements of economic development stage, financial market conditions and financial stability in a holistic manner, and coordinate transactions and remittance. With a focus on two-way opening up the financial market, we will promote the opening of non-convertible items in an orderly manner and improve the facilitation of convertible items. This is the basic principle and consideration for steadily promoting the opening up of capital account. There are special arrangements in several aspects. The first is to reform the QFII and RQFII, expand the scope of investment, and study ways to appropriately relax or even cancel the QFII quota management. The second is to support the healthy development of science and technology innovation board, and do a good job in cross-border fund management of depositary receipts under the Shanghai-London Stock Connect. The third is to promote the integration of open channels in the inter-bank bond market. 2019-07-18 12:06 Wang Chunying: Third, we need to improve the management framework of cross-border capital flows that combines macro-prudential management and micro-regulation. In terms of macro-prudential management, efforts will be made to improve the monitoring, early warning and response mechanisms for cross-border capital flows, enrich the policy toolbox for macro-prudential management of cross-border capital flows, and counter-cyclically regulate pro-cyclical fluctuations in the foreign exchange market in an open, transparent and market-based manner. With respect to micro regulation, we will continue to maintain the stability, consistency and predictability of regulatory policies across the cycle, crack down upon illegal and irregular activities in foreign exchange, and maintain a healthy and sound order in the foreign exchange market. 2019-07-18 12:06 Wang Chunying: Next, based on the thematic education activities on "remaining true to our original aspiration and keeping our mission firmly in mind" and under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the SAFE will further conduct surveys at the grassroots level and closely investigate the market to find out the actual situations and come out with practical measures, guarantee the implementation, unswervingly deepen the reforms in the foreign exchange field, and further open the foreign exchange market and serve the development of the real economy. Meanwhile, we will actively guard against risks from cross-border capital flows, maintain the healthy and sound order of the foreign exchange market as well as national economic and financial security. 2019-07-18 12:07 Moderator Liu Fang: This is the end of today's press conference. Thank you very much for your understanding of and support to our foreign exchange administration work, especially our press work all this time. Thank you. 2019-07-18 12:07 (The original text is available at www.people.com.cn) 2019-07-18/en/2019/0718/1538.html
-
On the morning of July 30, the State Administration of Foreign Exchange (SAFE) held a foreign exchange administration work conference for the second half of 2019. The participants earnestly studied and implemented the decisions and plans of the CPC Central Committee and the State Council for the economic and financial undertakings, summarized the work of the first half, analyzed the current situations of the foreign exchange market, and studied and made arrangements for key tasks of foreign exchange administration for the second half. Pan Gongsheng, secretary of the CPC Leadership and administrator of the SAFE, delivered a work report. Members of the CPC Leadership, chief accountants and chief economists of the SAFE attended the conference. The conference concluded that in the year to date, foreign exchange authorities, under the firm leadership of the CPC Central Committee and the State Council, have remained true to their original aspiration and mission, and based on serving the real economy to solidly further the reform and opening-up in the foreign exchange sector, effectively prevented and controlled external shocks and risks, and protected the foreign exchange market order and the country’s economic and financial safety in accordance with the arrangements of the Central Economic Working Conference and the Report on the Work of the Government. Hard efforts paid off and cultivated a good foreign exchange market environment for the steady operation of the national economy in the first half year of 2019. First, with political development as the top priority, foreign exchange authorities have made an all-out effort to enforce strict Party discipline. They have earnestly launched an educational activity themed with "remaining true to original aspiration and keeping mission firmly in mind". They have ensured strict implementation of the central government's "Eight-point Decision" and its implementing rules, and made unremitting efforts to correct the "four forms of decadence" including formalism, bureaucratism, hedonism and extravagance. Efforts have been made to strengthen the organizational work, and train a contingent of competent and professional officials who are loyal to the Party, have moral integrity, and demonstrate a keen sense of responsibility. Second, the foreign exchange administration reform has been deepened further. Foreign exchange authorities have stably promoted the liberalization of capital account, increased the quota for qualified foreign institutional investors (QFIIs), and supported the launch of the Science and Technology Innovation Board and the "Shanghai-London Stock Connect" programme. They have gone further in the reforms to delegate power, improve regulation, and upgrade services, increased the facilitation of trade and investment, and unveiled a number of facilitation measures for trade in goods, trade in services, insurers and multinational corporations. They have supported the trading and investing activities in countries and regions along the Belt and Road, and published the Overview of Foreign Exchange Administration Policies of the Belt and Road Countries in 2018. Third, the management framework of cross-border capital flows that combines macro-prudential management and micro-regulation has been further improved. Foreign exchange authorities have improved their regulation of banks' compliance in foreign exchange business and strengthened the management of high-risk fields of foreign exchange business. They have advanced the cooperation with regulators of other countries and cracked down upon the illegal behavior in the foreign exchange market. Fourth, the operation and management of foreign exchange reserves have been constantly improved. Foreign exchange authorities have done well in balancing the risk and return of reserve assets and organically combined the commercial use of foreign exchange reserves with the serving of national strategies. According to the conference, China’s economy remained within a reasonable range and carried forward an overall steady development trend featuring making progress while presenting stable performance in spite of a severe and complicated external environment in the first half year. This underpinned the continued stability of China’s foreign exchange market, basic equilibrium in the cross-border receipts and payments and in the supply and demand on the domestic foreign exchange market, and a stable rise of the foreign exchange reserve. Although the external environment is still complicated in the second half, China’s cross-border capital flows are expected to remain stable on a whole because of the stable expectations for Chinese economy, further widening of opening-up, more mature and rational foreign exchange market and good market order. The conference stressed that, in the second half, foreign exchange authorities must closely unite around the CPC Central Committee with Comrade Xi Jinping as the core, follow Xi Jinping thought on socialism with Chinese characteristics for a new era, maintain political integrity, think in terms of the big picture, follow the leadership core, and keep in alignment with the central Party leadership and have full confidence in the path, theory, system, and culture of socialism with Chinese characteristics, uphold the core position of General Secretary Xi Jinping in the CPC Central Committee and in the whole Party and uphold the authority of the Central Committee and its centralized, unified leadership, combine the educational activity themed with "remaining true to original aspiration and keeping mission firmly in mind" with the advancement of key work in foreign exchange administration, and carry out the plans of the CPC Central Committee and the State Council satisfactorily without any compromise. Foreign exchange authorities must adhere to the general work guideline of making progress while maintaining stability, make plans for and seek coordinated promotion of the foreign exchange administration work by putting it into the cycling of the entire national economy, further enhance the capability of serving the new pattern of China’s opening-up on all fronts, facilitate the reform and opening-up in key fields of foreign exchange, always think about worst-case scenarios, forestall and mitigate external financial shocks and risks, protect the safety of national economy and finance, and deliver a good result for the upcoming 70th anniversary of the founding of new China. The conference also set the working priorities for foreign exchange administration in the second half of 2019. The first is to unswervingly deepen comprehensive and strict exercise of Party self-discipline and develop the active and healthy political culture within the Party. Foreign exchange authorities should make the "remaining true to original aspiration and keeping mission firmly in mind" themed education go deeper and firmer with concrete measures, be problem-oriented, review and reflect on the problems and rectify them well to ensure the thematic education yields tangible results. They should strictly practice the standard that officials must have both ability and political integrity, and cultivate professional and high-quality officials teams who are loyal to the Party, have moral integrity, and demonstrate a keen sense of responsibility. The second is to further promote the liberalization and facilitation of trade and investment in a bid to cater to the needs of opening-up at a high level. Efforts should be made to advance capital account convertibility in a stable and orderly way, put into force the management of pre-establishment national treatment plus a negative list in direct investment fields, refine the system in relation to QFIIs and RQFIIs, and deepen the centralized operation and management of multinational corporations’ capital. More places should be included into the pilot of trade receipts and payments facilitation, and support should be given to prudent and compliant banks, which provide creditworthy enterprises with more facilitation services. Foreign exchange authorities should make plans from an overall perspective, strengthen top-level design, and support innovation in regional opening-up and construction of special zones. They should solidly carry out the work in connection with keeping employment, finance, foreign trade, foreign capital, investment and expectation stable. They should continue to deepen the reforms to delegate power, improve regulation, and upgrade services, launch the "Internet plus Regulation" system of the SAFE, and improve the "Online Application System of Government Services" of the SAFE. The third is to improve the management framework of "macro-prudence plus micro-regulation" for cross-border capital flows, and further strengthen the capability of preventing and controlling external shocks and risks. Foreign exchange authorities should step up monitoring and early warning of the foreign exchange market, and study how to diversify the macro-prudential management tools. They should continue to crack down on illegal acts in the foreign exchange market, particularly malignant breaches of laws and regulations such as underground banks and false and fraudulent transactions. The fourth is to consolidate the foundation of foreign exchange administration work. Foreign exchange authorities should improve the BOP statistics system, reinforce the capability of offsite regulation, develop and improve a digital regulatory platform. Taking the good opportunity of the establishment of the Foreign Exchange Research Center, they should further enhance the capability of doing researches in foreign exchange and the level of making decisions on foreign exchange services. The fifth is to improve the operation and management of foreign exchange reserves, safeguard the security, liquidity, value growth and maintenance of foreign exchange reserves. Efforts will be made to drive the high-quality development of diversified use of foreign exchange reserves. Heads of departments and units of the SAFE attended the meeting at the main venue. Relevant officials of the Discipline Inspection Group dispatched by the Central Commission for Discipline Inspection and the National Supervisory Commission to the People’s Bank of China, relevant departments and bureaus of the People’s Bank of China and Financial Audit Bureau I of the National Audit Office were invited to the conference. Members of the leaderships and department heads of SAFE branches (foreign exchange administrative departments) and central sub-branches were present at local venues. (End) 2019-07-30/en/2019/0730/1544.html
-
The State Administration of Foreign Exchange (SAFE) has recently released its 2018 Annual Report. This was the first time for the report to disclose the results of foreign exchange reserve operations and data on currency composition. The report also made an introduction to the philosophy and risk management of investment with foreign exchange reserves, as well as the globalized operating platform. In this regard, the SAFE spokesperson and Chief Economist Wang Chunying answered media questions. Q1: What are the main considerations for disclosing information on foreign exchange reserve operations? A: As the largest holder of foreign exchange reserves in the world, China has long committed itself to enhancing the transparency of foreign exchange reserve information. In accordance with the Special Data Dissemination Standard (SDDS) of the International Monetary Fund (IMF), the People’s Bank of China (PBC) and the SAFE have begun to unveil the scale of foreign exchange reserves on a regular basis since July 2015. Meanwhile, the information on foreign exchange reserves are also published to the outside in many other forms, e.g. press conference, portal website of the SAFE and annual report of the SAFE. To further disclose the operation and management information of foreign exchange reserves caters to China’s demand for expanding openness on all fronts and is also conducive to boosting the international community’s confidence in the Chinese economy and finance. Q2: What philosophy do you uphold while making investment with foreign exchange reserves? A: China’s foreign exchange reserves act as an important participant and responsible long-time investor in the global financial market. We invest in the international financial market in line with the market-oriented principle, respect the rules of international market and industry practices, protect and promote the stability and development of international financial market. China always pursues diversification and decentralization in investing with foreign exchange reserves. We flexibly adjust and constantly optimize the currency composition and asset structure in light of the market conditions, control overall investment risks and ensure that the our foreign exchange reserves can preserve and increase value leveraging the trade-off between different currencies and different asset classes. Speaking of the currency composition, China’s foreign exchange reserves are seeing an increasingly diverse portfolio of currencies with the advancement of the national economy and trade, which is more decentralized than the average level of global foreign exchange reserves. This suits to the development demand of China’s outbound economy and trade and the international payment demand, and is consistent with the international trend of diversification in the currency composition of foreign exchange reserves. So, it helps to reduce the exchange rate risks of China’s foreign exchange reserves. Q3: What’s the investment and operation goal of China’s foreign exchange reserves? A: China always takes the security, liquidity, value preservation and growth as the objective for the operation of foreign exchange reserves. The core function is to maintain the equilibrium of balance of payments and stability of exchange rates and protect the country’s financial safety. All in all, the operation has brought about stable incomes over a long period of time, with the return staying at a good level among the world’s foreign exchange reserve administrations. Q4: What’s the main reason for China to hold more gold reserves? A: Gold reserve has been a key part of countries' diversified international reserves. With properties of financial assets and commodities, gold is conducive to adjusting and optimizing the overall risk and return characteristics of the portfolios of international reserves. From the long-term and strategic perspectives, we will dynamically adjust the portfolio allocation of international reserves when necessary, to ensure the security, liquidity, value preservation and appreciation of international reserves. Q5: How does China perform risk management of foreign exchange reserves? A: China always gives top priority to preventing risks arising from the operation of foreign exchange reserves. The country continues to perfect the risk management and internal control framework, to enhance the capabilities of identifying, assessing and managing risks, to diversify and improve the risk management tools and approaches, and to establish and improve the risk management system. Thanks to the country’s ceaseless efforts to step up prospective analysis and early warning of significant risk events, China’s foreign exchange reserves have weathered through a number of market shocks and challenges such as the international financial crisis and the European sovereign debt crisis flexibly and appropriately, thus not only succeeding in maintaining the overall security and liquidity of foreign exchange reserve assets but also making positive contribution to serving the country’s economic development, reform and opening-up, preventing and mitigating significant risks. 2019-07-28/en/2019/0728/1543.html
-
The State Administration of Foreign Exchange (SAFE) has recently released the Balance of Payments (BOP) for the first quarter of 2019 and the International Investment Position (IIP) as of the end of March, 2019. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues. Q: Could you brief us on China's balance of payments for the first quarter of 2019? A: Based on the balance of payments, China's current account and financial account (excluding reserve assets) both registered surplus for the first quarter of 2019. The foreign reserves rose and the balance of payments maintained basic equilibrium. First, the surplus under the current account remained within a reasonable range, the surplus under trade in goods increased and the deficit under trade in services narrowed. In the first quarter of 2019, a surplus of USD 49 billion was recorded under the current account, and its ratio to GDP for the period was 1.5%. The surplus in trade in goods under balance of payments reached USD 94.7 billion, up by 83% year on year. The deficit under trade in service was USD 63.4 billion, down by 14% year on year. Specifically, tourism posted a deficit of USD 57.6 billion, down by 9%. Second, the financial account (excluding reserve assets) was in surplus, featuring net cross-border capital inflows. In the first quarter, the financial account (excluding reserve assets) registered a surplus of USD 48.8 billion, and the main net inflow items are direct investment and portfolio investment. Net inflows of foreign exchange by direct investment amounted to USD 26.5 billion. Specifically, the net inflows of inward foreign direct investment to China approached USD 47.6 billion; the net outflows of China’s outbound direct investment reached USD 21 billion. The net inflows of portfolio investment reached USD 19.5 billion. Specifically, the net increase of foreign portfolio investment in China reached USD 35.7 billion; China's external portfolio investment posted a net increase of USD 16.2 billion. Third, reserve assets rose. In the first quarter, China's reserve assets rose by USD 10 billion as a result of the BOP transactions (excluding the impact of non-transaction factors such as exchange rate and price), among which, foreign exchange reserves increased by USD 10 billion. In 2019, China will continue to promote high-quality economic development and all-round opening-up, which is conducive to consolidating the foundation for stable operation of the balance of payments. It is expected that China's balance of payments will continue the development pattern of basic balance of current account and overall stability of cross-border capital flows. Q: What would you say about China's International Investment Position as at the end of March 2019? A: According to the international investment position statement, China's international investment position remained robust at the end of March 2019. The main characteristics are as follows: Firstly, the total size of external financial assets increased. China's external assets reached USD 7.3817 trillion at the end of March, up by 0.8% over the end of 2018, mainly because China's ODI increased by USD 28.5 billion, or 1.5%; portfolio investment assets picked up by USD 47.6 billion or 9.6%; and reserve assets rose by USD 28.2 billion or 0.9%. Secondly, external liabilities continued to increase. China's external liabilities reached USD 5.4306 trillion at the end of March, up by 4.6% over the end of 2018. Specifically, FDI rose by USD 101.2 billion or 3.7%; Portfolio investment liabilities (foreign purchases of securities issued by China) rose by USD 159.3 billion, or up by 14.5%. Thirdly, the decline in net external assets mainly reflects the increase in the stock market capitalization of China's listed companies in the first quarter. At the end of March, China's net external assets (asset-liability) totaled USD 1.9511 trillion, down by 8.4% from the end of 2018, mainly affected by valuation factors such as asset price changes. In the first quarter, the domestic stock market and Hong Kong stock market witnessed a significant rise, and the market value of shares issued by Chinese enterprises held by non-residents increased, which belonged to China's external portfolio investment liabilities. The increase of market value led to the increase of liabilities, so the scale of China's net external assets decreased correspondingly. Overall, China sustained its No. 1 position worldwide by reserve assets. With orderly outbound investments and rising inbound investments, China's international investment position is still robust. 2019-06-27/en/2019/0627/1519.html
-
The State Administration of Foreign Exchange (SAFE) has recently released the preliminary data on the balance of payments for the second quarter and the first half of 2019. SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues. Q: Could you brief us on the characteristics of the balance of payments for the first half of 2019? A: In the first half of 2019, a surplus of USD 106 billion was recorded under the current account, and its ratio to GDP was 1.6%. As initially estimated, net inflows were registered under the financial account excluding reserve assets, and direct investment and portfolio investment were in surplus. Specifically, First, under the current account, trade in goods remained in surplus, trade in service recorded a shrinking deficit, and primary and secondary income were in surplus. In the BOP, trade in goods registered a surplus of USD 222.8 billion in the first half; trade in service registered a deficit of USD 129.3 billion, down by 12% year on year. Deficits were recorded under travel and transportation but went down by 8% and 14% year on year respectively; primary income registered a surplus of USD 7.1 billion, versus a deficit of USD 30.3 billion the same period last year; secondary income represented a surplus of USD 5.4 billion, compared with a deficit of USD 6.5 billion the same period last year. Second, under the financial account excluding reserve assets, direct investment and portfolio investment remained in surplus. In the first half, direct investment registered a surplus of USD 33.6 billion. In particular, ODI, at USD 46.7 billion, stayed stable; FDI, at USD 80.3 billion, remained high. Under portfolio investment, foreign investors bought additional securities of USD 50-odd billion while China bought foreign securities of extra USD 30-plus billion, and two-way equity and bond investment increased, suggesting that the two-way opening of capital market in China has fueled capital transactions and cross-border capital flows to better satisfy the demands for cross-border asset allocation among domestic and foreign investors. Currently China sees stable economic expectations, deeper opening up, and deeper trade and investment liberalization and facilitation. It is expected that during the whole year, the current account will remain within the reasonable range and likely to continue with a slight surplus; and the financial account excluding reserve assets will remain stable. All this shows that the balance of payments will remain in an equilibrium. 2019-08-09/en/2019/0809/1547.html
-
The State Administration of Foreign Exchange (SAFE) has recently issued the Circular on Further Facilitating Insurance Companies in Settlement of Foreign Exchange Capital (Huifa No. 17 [2019], hereinafter referred to as Circular). The official of the SAFE has answered press questions on relevant issues. 1. Could you brief us on the background of the Circular? A: In recent years, the SAFE has been actively serving China's new pattern of all-round opening-up, deepening reform and opening up in foreign exchange, driving the reform of "delegation, administration and service”, and constantly improving the capacity and level of foreign exchange administration to serve the real economy. In March 2015, reform on insurance-related foreign exchange administration was carried out to streamline business application materials and approval procedures, and improve the efficiency of foreign exchange insurance business. With the constant expansion of opening-up and the development of financial marketization, insurance companies have raised new demands for fund facilitation of foreign exchange insurance business. On the basis of fully investigating the demands of market entities and soliciting opinions from various parties, the SAFE has further promoted administration streamlining and power delegation, improved foreign exchange administration of insurance business, made research and issued the Circular. II. What are the main contents of the Circular? A: The Circular adheres to the "principle of actual demand", cancels the approval procedure for settlement of foreign exchange capital of insurance companies, improves the fund use efficiency of insurance companies, clarifies that financial institutions operating foreign exchange business (“financial institutions”) should conduct authenticity examination of business in accordance with the "three principles of business development", and standardizes the management of foreign exchange insurance business. The main contents include: The first is to cancel the approval procedure for settlement of foreign exchange capital of insurance companies and implement the discretionary foreign exchange settlement system. An insurance company may, according to actual operating requirements, handle the settlement of foreign exchange capital and funds raised through overseas IPO with a financial institution so as to improve the fund utilization efficiency of the insurance company. The second is to allow insurance intermediaries to conduct foreign exchange settlement or purchase of indemnities under insurance-related collection and payment for clients. Financial institutions shall examine the authenticity of foreign exchange settlement or purchase. The insurance agencies and insurance brokers that meet the requirements of the competent insurance authorities may directly handle foreign exchange settlement of indemnity funds under the insurance-related collection and payment for clients with a financial institution provided that the recipient of indemnities presents a power of attorney for foreign exchange settlement, so as to improve the payout efficiency with RMB for cross-border insurance-related collection and payment for clients. The third is to improve the ongoing and ex-post regulation of insurance-related foreign exchange business. The business compliance requirements of insurance institutions such as negative issues report shall be refined to ensure the healthy development of foreign exchange insurance business. III. What is the main consideration that allows insurance intermediaries to conduct foreign exchange settlement for indemnity funds under collection and payment for clients? A: With the constant expansion of opening-up and the development of financial marketization, in the efforts of serving the Belt and Road construction, more and more insurance intermediaries, especially insurance agencies and insurance brokers, are going global to serve cross-border insurance business. In the survey of market entities, some insurance intermediaries reflect the problem in RMB payout efficiency of cross-border insurance-related collection and payment service for clients. For example, due to the sudden occurrence of maritime and marine travel business, if the insurance intermediaries are not allowed to conduct exchange settlement of indemnity funds under the insurance-related collection and payment for clients, they will not be able to directly pay RMB to the policyholders, thus affecting the timeliness of relief efforts. The relaxing of the requirement for settlement of indemnity funds under collection and payment for clients by insurance intermediaries can effectively solve this problem and better serve the Belt and Road construction. IV. What contents shall be included in the independent report of negative issues of insurance institutions according to the Circular? A: The Circular adds a new management mode for insurance institutions to actively report negative issues. The reported items of insurance companies include: no foreign exchange insurance business undertaken for two consecutive years after obtaining the license to operate foreign exchange insurance business, being taken over by the insurance regulatory authorities, committing serious violation of laws and regulations and receiving administrative penalties. The reported items of insurance agencies and brokers include having committed serious violations of laws and regulations and having received administrative penalties. Local SAFE branches may require insurance institutions, if needed, to make rectification in order to effectively guard against financial risks. 2019-06-05/en/2019/0605/1522.html
-
Q: The latest data on foreign exchange reserves disseminated by the State Administration of Foreign Exchange show that China's foreign exchange reserves as of the end of June 2019 rose by USD 18.2 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of June 2019, China's foreign exchange reserves recorded USD 3.1192 trillion, up by USD 18.2 billion or 0.6% month on month. In June, the USD index fell and the asset price rose on the international financial market due to factors such as the global trade situations and monetary policies of central banks of major countries. Due to the combined impact of exchange rate translation and asset price changes, China’s foreign exchange reserves rose. Since the beginning of this year, despite increasing uncertainties and destabilizing factors in the external environment, China's economy has maintained overall stability and operated within a reasonable range. Supply and demand in the foreign exchange market are basically balanced, the cross-border capital flows through major channels have shown positive changes, and the foreign exchange reserves have steadily increased. Looking ahead, although the international economic and financial situations will remain complicated, China will continue to advance the high-quality economic development and actively implement the measures of opening up to the outside world in an all-around manner. The economic growth is expected to become more resilient and sustainable. All these will provide strong support for the stability of China's foreign exchange market and thus provide a solid foundation for the overall stability of the foreign exchange reserves. 2019-07-08/en/2019/0708/1536.html
-
The branches 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, the branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, and all designated Chinese-funded foreign exchange banks, In order to facilitate the settlement of cross-border e-commerce, promote the healthy development of foreign exchange business of payment institutions and prevent risks from foreign exchange payment, the SAFE formulated the Measures for the Administration of Foreign Exchange Business of Payment Institutions (“the Measures”, please see the Appendix) based on summarizing the pilot experience of cross-border foreign exchange payment business of payment institutions. Relevant issues are notified as follows: I. Payment institutions that participated in the pilot program on cross-border foreign exchange payment business before the implementation of the Measures shall, within three months from the implementation date of the Measures, conduct directory registration with the branches and foreign exchange administration departments of the SAFE (“the SAFE branches”) at the place of registration in line with the requirements of the Measures. II. Banks may, with reference to Article 12 of the Measures, apply to provide settlement and sales of foreign exchange and relevant fund receipt and payment services to cross-border e-commerce operators and consumers who purchase goods or services by presenting electronic transaction information, provided that the banks meet the requirements on transaction information collection and authenticity verification. III. In order to ensure the smooth transition of pilot business of payment institutions on cross-border foreign exchange payment, each SAFE branch shall accurately convey the policy requirements to the payment institutions within its jurisdiction, make scientific deployment of personnel and properly perform all kinds of work for implementation of the Measures. IV. This Circular shall come into force as of the date of promulgation. In case of any inconsistency between the previous provisions and this Circular, this Circular shall prevail. The Circular of the State Administration of Foreign Exchange on the Implementation of the Pilot Program of Cross-border Foreign Exchange Payment Business through Payment Institutions (Huifa No.7 [2015]) will be abolished. Upon receipt of this Circular, the SAFE branches should immediately forward it to the central sub-branches (sub-branches), local commercial banks, and foreign banks within their respective jurisdiction, and all designated Chinese-funded foreign exchange banks should promptly forward it to their branches. Appendix: Measures for the Administration of Foreign Exchange Business of Payment Institutions State Administration of Foreign Exchange April 29, 2019 2019-04-29/en/2019/0429/1525.html
-
The State Administration of Foreign Exchange (SAFE) has recently released the data on external debt as at the end of March 2019. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on China’s recent external debt situations. Q: Could you brief us on China's external debt for the first quarter of 2019? A: The scale of China’s external debt is basically stable. As at the end of March, the full-scale outstanding external debt (including domestic and foreign currencies) hit USD 1.9717 trillion, representing an increase of USD 6.5 billion from the end of 2018, up by 0.3%. Q: What would you say about the external debt situation in China? A: The growth of China's external debt has slowed down. Firstly, the currency structure of external debt has continued to improve. The increase of external debt in the first quarter of 2019 was mainly driven by external debt in domestic currency, which increased by 0.8 percentage point from the end of 2018. Secondly, the demand of foreign investors for purchasing domestic RMB bonds has remained stable with a slight increase. In the first quarter of 2019, the balance of debt securities increased by 4.3% from the end of 2018, accounting for 22.6% of the full-scale outstanding external debt. With the increasing uncertainties and destabilizing factors in the external environment, China's economic operation has maintained the development trend of overall stability and steady progress, showing adequate resilience. In the future, the SAFE will further refine the two-pronged "macro-prudential and micro-regulation" management framework for cross-border capital flow, and adhere to the practice of focusing on both serving the real economy and preventing risk from cross-border capital flow, so as to promote healthy economic development. 2019-06-28/en/2019/0628/1518.html