SCIO briefing on China's foreign-exchange receipts and payments data in H1 2022
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E-mail China.org.cn, August 3, 2022
Speaker:
Wang Chunying, deputy administrator and spokesperson of the State Administration of Foreign Exchange (SAFE)
Chairperson:
Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
July 22, 2022
Shou Xiaoli:
Ladies and gentlemen, good morning. Welcome to this press conference held by the SCIO. This is a regular briefing on China's economic data. Today, we are delighted to be joined by Ms. Wang Chunying, deputy administrator and spokesperson of the SAFE, who will introduce China's foreign-exchange receipts and payments data in the first half of 2022 and take your questions.
Now, let's give the floor to Ms. Wang for her introduction.
Wang Chunying:
Good morning. Welcome to today's press conference. I'll begin by introducing China's foreign-exchange receipts and payments data in the first half of 2022, and then answer your questions.
Since 2022, the international landscape has been complex and challenging, with continued COVID-19 outbreaks and the prospect of global economic growth weakening. Under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, China has effectively coordinated pandemic prevention and control with socio-economic development. Recently, major macroeconomic indicators have stabilized and picked up, and the economy has shown a general trend of recovery and development. Against this backdrop, China's foreign exchange market has become more resilient, the RMB exchange rate has been relatively stable and sound, and cross-border capital flow has been generally steady. In the first half of 2022, foreign exchange settlement and sales by banks registered $1.33 trillion (or 8.6 trillion yuan denominated in RMB) and $1.24 trillion (8.1 trillion yuan), respectively, creating a surplus of $85.2 billion (545.2 billion yuan). The cross-border receipts and payments by non-banking sectors stood at $3.16 trillion (or 20.5 trillion yuan denominated in RMB) and $3.08 trillion (20 trillion yuan), respectively, resulting in a surplus of $83.4 billion (533 billion yuan). In the first half of this year, China's forex receipts and payments showed the following main features:
First, forex settlement and sales by banks as well as cross-border receipts and payments by non-banking sectors continued to create surpluses, with both recording a surplus of over $80 billion in the first half of this year as I said just now. This is mainly because the basic surpluses in trade in goods, direct investment and other fields were kept at a high level. Specifically, in the first quarter, forex settlement and sales by banks as well as cross-border receipts and payments by non-banking sectors maintained high-level surpluses of $58.7 billion and $62.2 billion, respectively. In the second quarter, when the domestic situation and external environment were more complicated, the two indicators created surpluses of $26.5 billion and $21.1 billion, respectively.
Second, forex selling rate edged up and cross-border financing of enterprises remained stable. In the first half of this year, the forex selling rate measuring the willingness to buy forex, which is the ratio of forex customers buying from banks to their foreign-related forex expenditure, reached 66%, up by 2 percentage points over the same period last year. In terms of foreign investment financing, by the end of June this year, the forex loans of Chinese enterprises and other market entities at home amounted to $351 billion, which was basically the same as that at the end of 2021. Cross-border trade financing, including import payments by overseas agents and forward letters of credit, registered $116.4 billion, slightly lower than that at the end of 2021. This is the second feature.
Third, forex settlement rate increased steadily and enterprises' forex deposits were basically stable. In the first half of this year, the forex settlement rate measuring the willingness to settle forex, which is the ratio of forex customers selling to banks to their foreign-related forex income, was 67%, up by 0.4 percentage point from the same period in 2021. By the end of June this year, the forex deposits of Chinese enterprises and other market entities at home amounted to $695.1 billion, basically in line with that at the end of 2021.
Fourth, forex derivative transactions maintained growth and market players' awareness of exchange rate risk management steadily increased. In the first half of this year, to manage exchange rate risks, enterprises employed forward derivatives, options and other derivatives of more than $750 billion, an increase of 29% year on year, which was significantly higher than the growth rate of forex settlement and sales in the same period. As a result, the hedge ratio of enterprises rose to 26%, 4.1 percentage points higher than that of last year. This shows that market entities are more aware of averting exchange rate risks and are better able to adapt to fluctuations in the RMB exchange rate.
Fifth, the amount of forex reserves remained basically stable. At the end of June, China's forex reserves registered $3.07 trillion. Since the beginning of this year, the U.S. dollar index has risen remarkably and the prices of financial assets in major countries have fallen sharply. Forex reserves will drop in amount when denominated in dollars. This, coupled with changes in asset prices, constitutes a vital reason for the changes in the book value of forex reserves.
Going forward, the State Administration of Foreign Exchange (SAFE) will conscientiously implement the decisions and arrangements of the Party Central Committee and the State Council. We will act on the general principle of pursuing progress while ensuring stability, continue to deepen the reform and opening up in the field of foreign exchange, further facilitate cross-border trade and investment and financing, and serve the development of the real economy. Meanwhile, we will strengthen the study and judgment of the situation of foreign exchange revenue and expenditure. We will improve the regulatory framework underpinned by both macro-prudential governance and micro-prudential supervision for the foreign exchange market, and maintain the steady operation of the foreign exchange market and national economic and financial security. These efforts will enable us to pave the way for a successful 20th CPC National Congress.
The above is the main statistical data for foreign exchange revenue and expenditure in the first half of 2022. You are now welcome to ask questions about foreign exchange revenue and expenditure.
Shou Xiaoli:
The floor is now open for questions. Please identify the media outlet you represent before raising questions.
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