-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the preliminary data in the Balance of Payments for the first quarter of 2018, and its press spokesperson answered media questions on relevant issues. Q: Could you brief us on the new characteristics of the balance of payments for the first quarter of 2018? A: The preliminary data in the Balance of Payments for the first quarter show that the current account was in deficit, the financial account (excluding reserve assets) (including net errors and omissions for the quarter, the same below) was in surplus, and reserve assets rose, with the main new characteristics as follows: First, the deficit in the current account was caused by seasonal factors and rapid increase in import of goods. In the first quarter, the current account recorded a deficit of USD 28.2 billion, with a surplus of USD 53.4 billion under trade in goods in the Balance of Payments, down by 35% year on year. To be specific, export of goods was USD 529.6 billion, up by 11% year on year, and import of goods was USD 476.2 billion, up by 21% year on year. The import growth outpaced the export growth, further balancing trade in goods. Moreover, as Chinese people are on holidays at the beginning of the year, the balance of trade in goods for the first quarter is usually at the low level of the year. It is expected that the receipt and payment under the current account will remain in a reasonable range throughout the year. Second, the financial account excluding reserve assets was in surplus, featuring net cross-border capital inflows. In the first quarter of 2018, the financial account excluding reserve assets registered a surplus of USD 54.5 billion, and cross-border capital recorded net inflows, which has been so since the second quarter of 2017. Third, FDI rose rapidly, suggesting overseas investors are optimistic about China's economic prospects. In the first quarter, China posted USD 50.2 billion in net inflows of direct investment, which was three times higher than that in the same period last year. For composition, ODI recorded net outflows of USD 18.1 billion, down by 12% year on year; and FDI registered net inflows of USD 68.2 billion, 1.1 times higher than that in the same period last year. Fourth, reserve assets continued to increase, resulting in an adaptive equilibrium in the balance of payments. In the first quarter, China's reserve assets rose by USD 26.2 billion due to BOP transactions (excluding non-transaction factors like foreign exchange rate and price). Specifically, foreign exchange reserves went up by USD 26.6 billion, compared with a decrease of USD 2.5 billion in the same period last year. Overall, China's balance of payments maintained a basic equilibrium in the first quarter, with cross-border capital continuing with net inflows, and reserve assets rising stably, indicating a solid foundation for the overall equilibrium in the balance of payments in the future. 2018-05-04/en/2018/0612/1437.html
-
Q: The latest data disseminated by the People's Bank of China on foreign exchange reserves show that China's foreign exchange reserves as at the end of June 2018 rose USD 1.5 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of June 2018, China's foreign exchange reserves recorded USD 3.1121 trillion, up by USD 1.5 billion or 0.05% month on month. In June China's foreign exchange market performed stably and the balance of payments found an adaptive equilibrium. But global financial markets were more volatile and the US Dollar Index picked up by a slight 0.5% because major non-USD currencies declined against the US dollars and asset prices changed. As a result, China's foreign exchange reserves climbed marginally. In the year to date, China's economy has maintained stability while ensuring progress and gained momentum for growth. But due to divergence of the global economic recovery and rising trade frictions, some emerging economies have been under the pressure of capital outflows and currency depreciation. Nevertheless, in China, market expectations have been stabilized thanks to the robust fundamentals, and cross-border capital flows have remained steady. Looking ahead, China will focus on the supply-side structural reform, deepening the reform and opening up and strengthening innovation drive, indicating China's economy is sophisticated enough to maintain stable growth, which will provide a fundamental guarantee for the stable operation of the foreign exchange market. On the other hand, as trade protectionism rises, the FED continues to hike interest rates and reduce balance sheets, and global liquidity is tightened, the uncertainties of external environment have been heightened. Under such factors at home and abroad, China's foreign exchange reserves are expected to stay stable amid fluctuations. 2018-07-09/en/2018/0709/1466.html
-
Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China show that China's foreign exchange reserves by the end of April 2018 fell by USD 18 billion month on month. Could you tell us why? What will be the trends in the future? A: As at the end of April 2018, China registered USD 3.1249 trillion in foreign exchange reserves, down by USD 18 billion or 0.57% month on month. In April, China's cross-border capital flows remained stable and the supply and demand in the foreign exchange market maintained an equilibrium. Under the combined impact of an increase of more than 2% in the US Dollar Index on the international financial markets, the depreciation of major non-USD currencies against the USD and callback of asset prices, China's foreign exchange reserves declined slightly. Since the beginning of this year, China's economic performance has got off to a good start, with transformation and upgrading deepened and quality and benefit rising. The RMB exchange rate against the USD fluctuated in two ways and stayed stable, expectations of the foreign exchange rate rationally diverged, and the supply and demand of foreign exchange found an adaptive equilibrium. Looking ahead, China's economy will be well positioned for stable development with a strong momentum for growth. As the new landscape of opening up is advanced and the financial market is liberalized in two directions, China's cross-border capital will keep overall balance between inflows and outflows. At the same time, despite uncertainties, the world economy will continue to recover. As both domestic and overseas factors play their roles, China's foreign exchange reserves are expected to remain stable on the whole. 2018-05-07/en/2018/0612/1438.html
-
Q: The latest foreign exchange reserves data disseminated by the People's Bank of China show that China's foreign exchange reserves for May dropped by USD 14.2 billion month on month. Could you tell us why? What will be the future trends of foreign exchange reserves? A: As at the end of May 2018, China's foreign exchange reserves recorded USD 3.1106 trillion, down by USD 14.2 billion or 0.46% month on month. China's foreign exchange market performed stably in May. The US Dollar Index in global financial markets picked up by 2.3%, because non-USD currencies declined against the US dollars, but asset prices rose. As a result, China's foreign exchange reserves fell slightly. In the year to date, China's economy has gained momentum for growth. To be specific, production demand rose steadily, employment and prices remained stable, economic structure was optimized and upgraded, and quality benefits were improved. The foreign exchange supply and demand has remained balanced, and cross-border capital flows of market participants have found an equilibrium. Looking ahead, China's economy will be fully able and sophisticated to maintain stability with a strong momentum for growth. On that basis, China's foreign exchange market will adapt better to changes in external environment and continue the landscape of rational and balanced cross-border capital flows. On the other hand, as the global economy continues to recover, economies' growth will be diverged, indicating the financial market will still be faced with uncertainties. Under such factors at home and abroad, China's foreign exchange reserves are expected to stay stable. 2018-06-07/en/2018/0613/1440.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the Balance of Payments and International Investment Position for the second quarter and the first half of 2017, and the press spokesperson of the SAFE answered media questions on relevant issues. Q: Could you brief us on China's balance of payments for the first half? A: The first half witnessed a twin surplus under the current account and the financial account (excluding reserve assets) and rising reserve assets. The surplus under the current account was within a reasonable range. In the first half, the current account registered a surplus of USD 69.3 billion, accounting for 1.2% of China's GDP and staying within the reasonable range. In particular, trade in goods in the Balance of Payments recorded a surplus of USD 214.4 billion. The export of goods was USD 1.0269 trillion and the import was USD 812.6 billion, rising by 12% and 18% year on year respectively, suggesting China's foreign trade is being stabilized, with a good momentum for growth. The financial account (excluding reserve assets) registered a surplus. In the first half, the financial account (excluding reserve assets) hit a surplus of USD 67.9 billion, compared with a deficit of USD 178.7 billion for the same period of the previous year. On the one hand, outbound investments stayed stable. In the first half, the net external financial assets derived from BOP transactions rose by USD 134.2 billion. To be specific, the net ODI assets grew by USD 41.1 billion, the net outbound portfolio investment assets, USD 40.1 billion, and other net investment assets including external deposits and loans, USD 53.6 billion. On the other hand, overseas investors increased their investments in China. In the first half, China's net external liabilities grew by USD 202.1 billion. Specifically, net FDI rose by USD 55 billion, net foreign portfolio investment, USD 20.6 billion, and other net investments such as non-residents' deposits and loans, USD 126.7 billion. Reserve assets kept rising. In the first half, China's reserve assets went up by USD 29 billion, which was attributed to the BOP transactions (excluding the impact from non-trading factors such as foreign exchange rates and prices), compared with a drop of USD 157.8 billion for the same period of the previous year. To be specific, foreign exchange reserves grew by USD 29.4 billion, while the reserve position in the IMF wend down by USD 400 million. Looking ahead into the second half, along with the continuous recovery of the world economy, external demand will grow, commodity prices will be further stabilized, the domestic economy will remain within the reasonable range, and the financial market will be further liberalized, indicating China's balance of payments will hopefully find a basic equilibrium. Q: Could you tell us about China's International Investment Position as at the end of June 2017? A: As at the end of June 2017, China's external financial assets and liabilities increased from the end of the previous year. China posted USD 1.7515 trillion in net external assets as at the end of June 2017. To be specific, the external assets hit USD 6.6446 trillion, and the external liabilities, USD 4.8931 trillion, up by 2.8% and 4.9% respectively from the end of the previous year (the same below). All of the external assets were on a steady upward trend. Specifically, direct investment assets increased by USD 52.5 billion or 4.0%; portfolio investment assets went up by USD 49.2 billion or 13.5%; financial derivative assets climbed by USD 700 million or 13.9%; other investment assets increased by USD 23.1 billion or 1.4%; and reserve assets jumped by USD 52.5 billion or 1.7%. All of the external liabilities continued recovering. In particular, direct investment liabilities rose by USD 58.6 billion or 2.0%; portfolio investment liabilities increased by USD 49.6 billion or 6.1%; financial derivative liabilities fell by USD 1.7 billion or 25.5%; and other investment liabilities went up by USD 120.6 billion or 12.2%. Looking at the items, we found from external assets that the reserve assets hit USD 3.1504 trillion, 47% of total assets; direct investment assets reached USD 1.3697 trillion, 21% of total assets; portfolio investment assets were USD 414.3 billion, 6% of total assets; financial derivative assets amounted to USD 6 billion, 0.1% of total assets; and other investment assets reached USD 1.7042 trillion, 26% of total assets. In terms of external liabilities, direct investment liabilities hit USD 2.9245 trillion, accounting for 60% of total liabilities, which remained the highest among external liabilities; portfolio investment liabilities reached USD 858.3 billion, 18% of the total liabilities; financial derivative liabilities were USD 4.9 billion, 0.1% of total liabilities; and other investment liabilities amounted to USD 1.1054 trillion, 23% of total liabilities. Overall, China still takes the top spot worldwide by reserve assets. Its outbound investments are made in an orderly manner and foreign investments rise stably, indicting its international investment position is robust. 2017-09-28/en/2017/0928/1324.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange sales and settlements and banks' foreign-related payments and receipts for customers for August 2017, and its press spokesperson answered media questions on recent cross-border capital flows. Q: Could you brief us on China's cross-border capital flows for August? A: China's cross-border capital flows were further balanced in August. First, the supply and demand of foreign exchange in China remained balanced. In August, banks' foreign exchange settlements rose by 11% month on month, and their sales of foreign exchange went up by 1%, leading to a deficit of USD 3.8 billion, down by 75%. The value of foreign exchange contracted for forward settlements and sales recorded a surplus for fifth consecutive month, which was USD 3.1 billion, up by 18% month on month. Under the combined impact of foreign exchange supply and demand factors, such as banks' spot and forward foreign exchange settlements and sales, and options, a better equilibrium between the supply and demand of foreign exchange was maintained in China in the month than in July. Second, the deficit in foreign-related payments and receipts of the non-banking sector contracted remarkably. In August, foreign-related receipts of the non-banking sector jumped by 14% month on month, and foreign-related payments grew by 6%, leading to a deficit of USD 3.5 billion, down by 84%. In addition, as at the end of August, China's foreign exchange reserves amounted to USD 3.0915 trillion, up by USD 10.8 billion month on month, representing its seventh consecutive month of growth. Domestic market participants witnessed more stable foreign-related transactions, which featured more capital inflows into major channels such as trade and investment. First, market participants' desire to settle foreign exchange rose while their desire to purchase foreign exchange set a new record low. In August, the ratio of banks' foreign exchange settlements for customers to foreign-related foreign exchange receipts was 62.2%, up by 0.2 percentage point month on month; the ratio of banks' foreign exchange purchases for customers to foreign-related foreign exchange payments was 61.5%, down by 1.2 percentage point month on month, consistent with the level of the beginning of 2014. Second, cross-border capital inflows and net foreign exchange settlements under trade in goods increased. In August, the surplus of foreign trade under trade in goods dropped slightly on a month-on-month basis, but the surplus of banks' foreign-related receipts and payments for customers and the surplus of banks' foreign exchange settlements and sales for customers under trade in goods (Customs statistics) went up by 48% and 26% month on month respectively. Third, FDI and foreign exchange settlements rose rapidly. In August, FDI rose by more than 30% month on month, and foreign exchange capital settlements climbed by more than 20% month on month. Moreover, foreign exchange purchases and payments under enterprises' ROI culminated in August, and individuals' purchases of foreign exchange were much lower than the same period last year. Recently China's economy has been performing well with a good momentum for growth, continuing to strengthen market confidence. The RMB exchange rate has experienced two-way fluctuation and stable growth, making domestic market participants more sensible in foreign-related transactions in terms of expectations and behaviors. Going forward, as China's domestic economic fundamentals become more stable, the level of opening up is further deepened, and market expectations are further stabilized, China's cross-border capital flows will sustain a stable, orderly and balanced pattern. 2017-09-18/en/2017/0918/1323.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange sales and settlements and banks' foreign-related payments and receipts for customers for July 2017, and its press spokesperson answered media questions on recent cross-border capital flows. Q: China's cross-border capital flows remained steady in the first half, with a good momentum for growth. Could you brief us on China's cross-border capital flows for July? A: China's cross-border capital flows maintained a basic equilibrium in July. First, the supply and demand of foreign exchange remained balanced in China. In July, banks registered a deficit of USD 15.5 billion in foreign exchange settlements and sales, down by 26% month on month. In particular, a deficit of USD 6.3 billion was recorded in banks' foreign exchange settlements and sales for customers, down by 53%. In the same month, the value of foreign exchange contracted for forward settlements and sales recorded a surplus for fourth consecutive month, which was USD 2.6 billion. Under the combined impact of banks' spot and forward foreign exchange settlements and sales, and foreign exchange supply and demand factors such as options, a better equilibrium between the supply and demand of foreign exchange was maintained in China in the month than in the prior two months. Second, the deficit in foreign-related payments and receipts of non-banking sectors remained steady. In the month, the deficit was USD 22 billion, consistent with that of May and June. To be specific, the deficit of foreign-related receipts and payments in RMB and foreign currencies registered USD 13.8 billion and USD 8.2 billion respectively. Moreover, China's foreign exchange reserves as at the end of July, which were unveiled on August 7, had climbed for 6 consecutive months and amounted to USD 3.0807 trillion, representing a month-on-month increase of USD 23.9 billion. Domestic participants witnessed more stable and orderly foreign-related receipts and payments. First, market participants' desire to settle foreign exchange stayed stable while their desire to purchase foreign exchange was weakened. In July, the ratio of banks' foreign exchange settlements for customers to foreign-related foreign exchange receipts was 62%, down by 1 percentage point; the ratio of banks' foreign exchange purchases for customers to foreign-related foreign exchange payments was 63%, down by four percentage points month on month. Second, enterprises' enthusiasm for funding in foreign currencies was strengthened stably. In July, China continued to see stable growth in the outstanding external debt registered; and the foreign exchange purchased by enterprises to repay domestic foreign exchange loans hit a new low in recent years, down by 46% month on month. Third, foreign exchange purchased by individuals dropped. Since the beginning of this year, as market expectations are further stabilized, individuals' use of foreign exchange has become more reasonable and orderly. In July, foreign exchange purchased by individuals went down by 35% month on month and 27% year on year. Since the beginning of this year, China's economy has been more stabilized with a good momentum for stronger growth, and market expectations have become further stabilized, boosting remarkable improvement in China's foreign exchange situations. Going forward, China's cross-border capital flows will remain stable, economic fundamentals will be more supportive, expansion and further opening of domestic markets is expected to deliver stronger outcomes, and domestic market participants' adjustment of external assets and liabilities will be more stable. 2017-08-16/en/2017/0816/1294.html
-
Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China show China's foreign exchange reserves as at the end of September 2017 went up by USD 17 billion month on month. Could you brief us on the causes behind such a change? A: As at the end of September, China posted USD 3.1085 trillion in foreign exchange reserves, up by USD 17 billion or 0.5% month on month, marking the eighth consecutive month of increases. In September, China's cross-border capital flows and trading behaviors of domestic and foreign market participants were further stabilized and balanced. In global financial markets, major exchange rates and asset prices went through ups and downs, and the overall foreign exchange reserve investments rose, boosting foreign exchange reserves to pick up. In the first three quarters, China's foreign exchange reserves bottomed out in January 2017 and recorded increases for the eighth-straight month in September, representing the longest period for continuous increases since June 2014. The foreign exchange reserves as at the end of September rose by USD 98 billion or 3.3% from the beginning of 2017, while those for the same period of the previous year fell by USD 164 billion. Overall, the supply and demand in the domestic foreign exchange market have found an equilibrium, non-USD currencies appreciate against US dollars in the global financial markets, and asset prices rise. All of these have contributed to the recovery of foreign exchange reserves. Q: What would you say about the recovery of China's foreign exchange reserves for the eighth-straight month? What will be the future trends of foreign exchange reserves? A: Since the very beginning of this year, China's economic and financial performance have stayed stable with a good momentum for growth, providing a fundamental guarantee for the continued and stable recovery of China's foreign exchange reserves. In the first three quarters, China's economy grew within a reasonable range, its structural adjustment was deepened, and quality and benefit kept rising, indicating its economy is stable with a good momentum for growth. The RMB exchange rate recorded two-way fluctuations and grew while maintaining stability, the cross-border capital flows were stable and orderly, and the balance of payments was basically balanced. All of these have facilitated the stable recovery of foreign exchange reserves. Going forward, as the domestic economy remains stable with a good momentum for growth, the reform and opening up goes deeper, and market expectations become further stabilized, China will see a more solid foundation for stable cross-border capital flows. As the three tasks, namely, finance serving the real economy, guarding against financial risks and deepening the financial reform, are pressed ahead with in an orderly manner, China's economy and finance will achieve benign circulation and healthy development, which will continue to promote the equilibrium and stability in the balance of payments and foreign exchange reserves. 2017-10-09/en/2017/1009/1376.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the initial data on the balance of payments for the second quarter and the first half of 2017, and its press spokesperson answered media questions on relevant issues. Q: Could you brief us on the latest changes in China's balance of payments for the first half of 2017? A: In the first half, the initial data in China's Balance of Payments show that twin surplus was registered under the current account and the financial account excluding reserve assets (including net errors and omissions for the second quarter, the same below), suggesting an increase in reserve assets. First, a reasonable surplus was sustained under the current account, and foreign trade recorded growth on a year-on-year basis. In the first half, China posted USD 71.2 billion in the surplus under the current account, accounting for 1.3% of its GDP for the period. To be specific, trade in goods in the balance of payments registered a surplus of USD 215.4 billion, down by 7% year on year, but import and export of goods were up by 12% and 18% year on year respectively, indicating foreign trade remained steady with a good momentum for growth thanks to the continuous improvements in domestic and foreign demand. In comparison, trade in services recorded a deficit of USD 135.1 billion, up by 24% year on year, chiefly because of an increase of 26% under transport driven by import growth, and travel registered an increase of 19% in deficit. Second, the financial account excluding reserve assets registered a surplus. In the first half, China witnessed a surplus of USD 15.6 billion under the financial account excluding reserve assets, versus a deficit of USD 225.9 billion for the same period last year on a comparable basis. In particular, direct investment recorded a net inflow of USD 14.2 billion, compared with a net outflow of USD 49.4 billion for the same period last year. Specifically, ODI registered a net outflow of USD 40.4 billion, and FDI, a net inflow of USD 54.6 billion, indicating investment has sustained a certain scale in both directions. Third, reserve assets increased. In the first half, China's reserve assets rose by USD 29 billion due to the balance of payments transactions (excluding non-trading factors such as exchange rate and price), versus a decline of USD 157.8 billion for the same period last year. To be specific, foreign exchange reserves rose by USD 29.4 billion, and reserves position in the IMF dropped by USD 400 million. Overall, China witnessed robust balance of payments in the first half, with cross-border capital flows getting stabilized with a good momentum for growth. In the future, the overall equilibrium of the balance of payments will have a stronger foundation. 2017-08-07/en/2017/0807/1292.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated China's external debt data as at the end of June 2017, and an official from the SAFE answered media questions on relevant issues regarding external debt. Q: Could you brief us on China's external debt data for the second quarter of 2017? A: China's external debt continued its stable growth in the second quarter of 2017. As at the end of June 2017, China's full-scale outstanding external debt registered USD 1.5628 trillion (in both domestic and foreign currencies), up by USD 125 billion or 8.7% quarter on quarter. The growth in external debt for the second quarter was attributed to the growth in banks' external debt. The rise in banks' outstanding external debt contributed nearly 70% of the growth in total outstanding external debt incurred by China, in that banks made full use of overseas low-cost funds to serve the development of foreign trade and the real economy, under the framework of macro-prudential policy management for cross-border financing. Q: What would you say about China's external debt? A: China has witnessed stable growth in external debt since the beginning of this year. Economically, China's overall economic performance is good, with its GDP for the first half rising by 6.9% year on year, and foreign trade growing by 19.6% year on year. There are also many other highlights in China's economic growth, which serve the bases for the continuous increase in external debt. Politically, the People's Bank of China, together with the SAFE, has further refined the macro-prudential management policy for full-scale cross-border financing, expanding the room for banks and enterprises to borrow external debt on their own, and reducing the financing costs for the real economy. Overall, China's external debt boasts a solid economic foundation and is expected to continue growing steadily in the future. The SAFE will continue to watch out for the changes in China's external debt. While further boosting cross-border investment and financing facilitation, the SAFE will effectively guard against external debt risk and safeguard China's economic and financial stability. 2017-09-29/en/2017/0929/1325.html