Speaker:
Ms. Wang Chunying, deputy administrator and spokesperson of the State Administration of Foreign Exchange
Chairperson:
Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
April 21, 2023
Chen Wenjun:
Ladies and gentlemen, good morning. At today's press conference held by the State Council Information Office (SCIO), we are joined by Ms. Wang Chunying, deputy administrator and spokesperson of the State Administration of Foreign Exchange (SAFE). Ms. Wang will present the data on China's foreign exchange receipts and payments for the first quarter of 2023, and also take your questions.
Now, I will give the floor to Ms. Wang Chunying for a brief introduction.
Wang Chunying:
Good morning, everyone. Welcome to today's press conference. Now, I would like to brief you on China's foreign exchange receipts and payments situations for the first quarter of 2023 and then take your questions.
In the first quarter of 2023, there were still uncertainties in the international financial market, with an increasing downward pressure on the global economy and a slowdown in the tightening of monetary policy in major developed economies. Facing a complex external environment, China has followed the general principle of pursuing progress while ensuring stability, and has made concrete efforts to promote high-quality development under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core. Major macroeconomic indicators have stabilized, and the economy has maintained a momentum of recovery and development. China's foreign exchange market got off to a stable start, the exchange rate of the yuan against the US dollar increased slightly, and the cross-border capital flow became more balanced.
According to the data on foreign exchange settlement and sales by banks in the first quarter of this year, in US dollar terms, banks settled $546 billion and sold $561.3 billion, representing a deficit of $15.3 billion; or in yuan terms, banks settled 3.74 trillion yuan and sold 3.84 trillion yuan, recording a deficit of 105.5 billion yuan. For cross-border receipts and payments by non-banking sectors, in US dollar terms, banks registered $1.4850 trillion in foreign-related receipts and $1.4508 trillion in foreign-related payments for customers, representing a surplus of $34.2 billion; or in yuan terms, banks handled foreign-related receipts of 10.17 trillion yuan and payments of 9.93 trillion yuan for customers, recording a surplus of 232.9 billion yuan.
China's foreign exchange receipts and payments for the first quarter of 2023 show the following characteristics:
First, China's cross-border capital flows are generally stable. In the first quarter of 2023, the cross-border receipts and payments by non-banking sectors recorded a surplus of $34.2 billion, while the foreign exchange settlement and sales by banks posted a deficit of $15.3 billion. Specifically, the surplus reached a seasonal high before the Spring Festival in terms of cross-border receipts and payments by non-banking sectors, but it tended to reach a basic equilibrium in February and March. The balance in foreign exchange settlement and sales by banks fluctuated in a narrow range in January and February and was represented by a small deficit in March. To sum up, the supply and demand of domestic foreign exchange were basically in balance.
Second, the cross-border capital flows under the current account were stable, while that under the capital account ran smoothly and orderly. In the first quarter of 2023, the net inflow of capital under trade in goods continued to be relatively high, while the net outflow of capital under trade in services increased year on year, which was mainly attributed to the fact that the resident travelling abroad has increased but was still lower than its pre-pandemic level. The net inflow of foreign direct investment (FDI) in China remained, and the foreign investment in China's securities market showed a net increase. Meanwhile, China's outward direct investment and its holdings of foreign securities maintained a reasonable and orderly development trend.
Third, the foreign exchange sales rate was kept at a stable level for nearly one year, while the foreign exchange financing by enterprises remained stable. In the first quarter of 2023, the sales rate, a measure of customers' willingness to buy foreign exchange, which is the ratio of foreign exchange purchased by customers from banks to foreign-related foreign exchange payments made by customers, stood at 68%, basically the same as that in the fourth quarter of 2022. The sales rate for each quarter has remained at around 68% since the second quarter of 2022. In terms of financing, the outstanding domestic foreign exchange loans of market participants, such as Chinese enterprises, reached $281 billion by the end of February 2023, an increase of $9.7 billion from the end of 2022. By the end of March, the balance of foreign currency financing under international trade, such as import refinancing and forward letter of credit, stood at $73.1 billion, a slight decline of $3.7 billion from the end of 2022.
Fourth, the foreign exchange settlement ratio increased steadily, and the balance of enterprises' foreign exchange deposits remained basically stable. In the first quarter of 2023, the foreign exchange settlement ratio, a measure of customers' willingness to settle foreign exchange, or the ratio of foreign exchange sold by customers to banks to customers' foreign-related foreign exchange receipts, reached 64%, up by one percentage point from the fourth quarter of 2022. By the end of February 2023, domestic foreign exchange deposits held by Chinese enterprises and other market participants totaled $640.6 billion, an increase of $6.5 billion from the end of 2022.
Fifth, the volume of China's foreign exchange reserves remained basically stable. China's foreign exchange reserves increased by $56.2 billion from the end of 2022 to $3.1839 trillion at the end of March this year, mainly due to the combined effects of currency translation, asset price changes, and other factors.
Looking ahead, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the SAFE will fully implement the guiding principles of the 20th CPC National Congress. We will work holistically to ensure both development and security, and continuously deepen the reform and opening up in the foreign exchange sector. More efforts will be made to advance the high-standard opening up under capital account steadily and orderly to facilitate cross-border trade, investment and financing, and to optimize the foreign exchange reserve operation and management system with Chinese characteristics. We will constantly improve the two-pronged "macro-prudential management and micro regulation" framework to guard against the risks and shocks from the external financial market, and maintain the stable operation of the foreign exchange market and national economic and financial security, in a bid to serve the high-quality development of the real economy.
The facts mentioned above are what I want to share with you on the main data of China's foreign exchange receipts and payments for the first quarter of 2023. Now, I'd like to take your questions. Thank you.
