Q: The latest data disseminated by the State Administration of Foreign Exchange (SAFE) on foreign exchange reserves show that China’s foreign exchange reserves as at the end of December 2018 increased by USD 11 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 December 2018, China’s foreign exchange reserves stood at USD 3,072.7 billion, up by USD 11 billion or 0.4% month on month.

China’s balance of payments continued to maintain stable operation in December, and the supply and demand in the foreign exchange market was basically balanced. At the end of the year, the exchange rate of non-US dollar currencies against the US dollar rose slightly, bond prices of major countries went up to certain extent, and exchange rate translation and asset prices changed, which worked together to lead to slight rise of China’s foreign exchange reserves.

For the whole year of 2018, China’s foreign exchange reserves fluctuated slightly, but remained stable on the whole. Against the backdrop of differentiated global economic growth and significantly increasing financial market volatility, China’s economy maintained sustained and sound development, the RMB exchange rate and market expectations remained stable, and the cross-border capital flows and balance of payments remained basically balanced, providing a solid foundation for the stability of China’s foreign exchange reserves.

The year 2019 marks the 70th anniversary of the founding of the People’s Republic of China, and it’s a crucial year for building a well-off society in an all-around way. The current international environment is complicated and tough, the uncertainty of global economic situations and financial market has increased, but China’s economic development is resilient enough and has tremendous potential, and the optimistic trend of economic development will remain unchanged in the long run. China is able to withstand external shocks and market fluctuations, maintain overall stability of cross-border capital flows and basic equilibrium between supply and demand in the foreign exchange market. Under such factors at home and abroad, China’s foreign exchange reserves are expected to stay stable.