Read in Chinese

Speakers: 

Ms. Li Hongyan, deputy administrator of the State Administration of Foreign Exchange (SAFE)

Mr. Jia Ning, director general of the Balance of Payments Department of SAFE

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

Oct. 22, 2024

Xing Huina:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO) as part of the series "Promoting High-Quality Development." Today, we have invited Ms. Li Hongyan, deputy administrator of the State Administration of Foreign Exchange (SAFE), to brief you on foreign exchangereceipts and payments data for the first three quarters of 2024 and answer your questions. Also with us today is Mr. Jia Ning, director general of the Balance of Payments Department of SAFE.

Now, I'll give the floor to Ms. Li for her introduction.

Li Hongyan:

Good morning, everyone. Despite today's poor weather, thank you all for attending this press conference. I'll begin by briefing you on China's forex receipts and payments for the first three quarters of 2024, then take your questions.

Since 2024, the global economic and financial situation has been complex and volatile, with rising geopolitical risks. China has adhered to the general principle of pursuing progress while ensuring stability, intensified macro regulation, and maintained overall stability with steady progress in the national economy. Cross-border capital flows have trended toward balance, and the forex market has demonstrated strong resilience. Market expectations and transactions have remained generally rational and orderly. The yuan exchange rate has maintained basic stability at a reasonable, balanced level.

From the perspective of cross-border receipts and payments by non-banking sectors, in the first three quarters of 2024, cross-border receipts and payments by non-banking sectors amounted to $5.2594 trillion and $5.2566 trillion, respectively, resulting in a $2.8 billion surplus when valued in U.S. dollars. When valued in yuan, cross-border receipts by non-banking sectors totaled 37.39 trillion yuan, and payments 37.37 trillion yuan, yielding a surplus of 18.7 billion yuan. In terms of data on foreign exchange settlement and sales by banks, let me explain that settlement refers to the selling of foreign exchange to banks by enterprises, individuals, and other entities, while sales refer to the buying of foreign exchange from banks by these entities. In dollar terms, the first three quarters saw forex settlements of $1.6762 trillion and sales of $1.7975 trillion, resulting in a $121.3 billion deficit. In yuan terms, settlements reached 11.91 trillion yuan and sales totaled 12.78 trillion yuan, producing an 864.6 billion yuan deficit.

In the first three quarters of 2024, China's forex receipts and payments showed the following main characteristics:

First, cross-border capital flows returned to net inflows. Overall, cross-border receipts and payments by non-banking sectors showed a slight surplus in the first three quarters, with a modest surplus in the first quarter, shifting to a deficit in the second quarter, and returning to surplus in the third quarter. In terms of main components, goods trade maintained net inflows, foreign investment into China gradually improved, and outbound investment by domestic entities remained orderly.

Second, forex settlement and sales by banks moved toward basic balance. In the first three quarters, overall forex settlement and sales by banks showed a deficit, primarily due to an expanded deficit in the second quarter. However, it returned to equilibrium in the third quarter, with a surplus emerging in September, characterized by increased settlements and stable sales.

Third, the forex settlement rate has risen steadily while the sales rate has shown a moderate decline, with enterprises maintaining rational behavior in foreign exchange settlements and sales. In the first three quarters, the settlement rate for forex receipts, which measures settlement willingness, was 62.1%, while the sales rate for forex payments, which measures purchase willingness, was 68.9%. From August to September, the settlement rate reached 66.4%, up 5.7 percentage points from the first seven months, while the sales rate was 66.7%, down 2.8 percentage points from the same period. Domestic entities maintained stable exchange rate expectations, and forex transactions remained rational and orderly.

Fourth, forex transactions remained relatively active. In the first three quarters, total transaction volume in the domestic yuan forex market reached $30.27 trillion, up 10.1% year on year. Of this, spot and derivatives transactions amounted to $10.18 trillion and $20.09 trillion, respectively, with derivatives accounting for 66.4% of the market. This proportion increased by 3.7 percentage points compared to the same period of 2023.

Let me mention that in August this year, SAFE published the guidelines on exchange rate risk management for enterprises on its official website. We've brought copies of these guidelines here today for media representatives to take. The guidelines include new market practices and corporate case studies, as well as examples of accounting applications for corporate hedging. We hope you can help us promote these guidelines.

Fifth, foreign exchange reserves have remained stable. Since the beginning of the year, non-dollar currencies have experienced both depreciation and appreciation against the U.S. dollar. Given the rise in global asset prices, and as a result of non-transaction factors such as exchange rate translation and asset valuation effects, China's foreign exchange reserves have steadily increased. At the end of September, the balance of foreign exchange reserves stood at $3.3164 trillion, an increase of $78.4 billion from the end of 2023. 

Going forward, SAFE will thoroughly implement the guiding principles from the third plenary session of the 20th CPC Central Committee as well as the arrangements and requirements made at the meeting of the Political Bureau of the CPC Central Committee held on Sept. 26. We will pay more attention to system integration, prioritize key areas and put our focus toward solid reform results. We'll unwaveringly follow the path of financial development with Chinese characteristics, and make solid and effective efforts to promote reforms and prevent risks in the foreign exchange market. By doing so, we seek to step up support for the real economy and promote sustained economic recovery and growth.

The aforementioned is major statistics with China's foreign exchange receipts and payments in the first three quarters of 2024. We're now open to your questions regarding China's foreign exchange receipts and payments. 

Thank you.