The State Administration of Foreign Exchange (SAFE) has recently released data on foreign exchange settlement and sales by banks as well as cross-border receipts and payments by non-banking sectors in May 2022. The SAFE Deputy Administrator and Press Spokesperson Wang Chunying answered media questions on China’s foreign exchange receipts and payments of May 2022.

Q: Could you brief us on China’s foreign exchange receipts and payments in May 2022?

A: China's cross-border capital flows were generally stable, and foreign exchange settlement and sales by banks as well as cross-border receipts and payments by non-banking sectors both maintained a surplus. First, the foreign exchange settlement and sales by banks continued to record a surplus, which stood at USD 1.5 billion in May. Taking into account of factors like forward settlement and sale of foreign exchange and option trading, the supply and demand of domestic foreign exchange were basically in balance. Second, an overall net inflow has also been shown in the foreign-related receipts and payments. In May, the foreign-related receipts and payments by non-banking sectors, including enterprises and individuals, posted a surplus of USD 7.7 billion. Third, the size of China's foreign exchange reserves remained basically stable. As of the end of May, China's foreign exchange reserves stood at USD 3.1278 trillion, up by USD 8.1 billion from the end of April.

Net inflows of cross-border capital related to the real economy, such as trade in goods and direct investment, remained at a relatively high level, which continued to play a fundamental role in stabilizing cross-border capital flows. In May, the cross-border trade surplus in goods was USD 38.3 billion, up by 97% year on year. The surplus of cross-border direct investment was USD 5.5 billion, broadly unchanged from the same period last year. As a result of the global COVID-19 pandemic and other factors, the foreign trade deficit in services registered USD 2.8 billion, still at a relatively low level. The profit remittance of foreign-invested enterprises increased seasonally, and the scale was almost the same as that of the same period of the previous year.

At present, there are still unstable and uncertain factors in the external environment, but China has effectively coordinated epidemic prevention and control with economic and social development. As the epidemic prevention and control has achieved phased results, the policies and measures to stabilize economic growth continue to be effective, and the momentum of economic recovery is accelerating, which will help China's foreign exchange market and balance of payments continue to operate smoothly.