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 January 2023. The SAFE Deputy Administrator and Press Spokesperson Wang Chunying answered media questions on China’s foreign exchange receipts and payments in January 2023.

Q: Could you brief us on China’s foreign exchange receipts and payments in January 2023?

A: China’s cross-border capital flows stay stable, and the country’s foreign exchange supply and demand remained balanced. In January, the surplus registered by the foreign-related receipts and payments by non-banking sectors, including enterprises and individuals, was USD 35.1 billion, a month-on-month increase of 52%; while the surplus registered by the foreign exchange settlement and sales by banks was USD 2.5 billion. Considering other supply and demand factors, the foreign exchange supply and demand within the country remained basically balanced. In general, the foreign exchange market got off to a good start in 2023, with stable expectations of market entites and rational, orderly transactions of all kinds.

Cross-border capital inflows, such as trade in goods, foreign direct investment, and other projects, continued to play a fundamental role, and foreign investment in China’s domestic stocks hit a record high. In January, the foreign-related receipts and payments under trade in goods reached a record-high surplus of USD 38.7 billion, up by 9% month on month. The net inflow of foreign direct investment funds remained relatively stable. As China optimized epidemic prevention and control measures, various policy initiatives aiming to stabilize the economic growth gradually achieved positive results and consolidated the trend of economic stabilization and recovery. Besides, foreign investors actively participated in China’s domestic stock market. A record-breaking amount was spent in one month on the net purchase of domestic Chinese stocks in January, totaling USD 27.7 billion.

China’s sound long-term economic fundamentals will not change moving forward, and the International Monetary Fund (IMF) expects that China’s economy will remain the main engine driving the global economy this year. Moreover, the attraction of RMB assets will be further enhanced, and the foundation for maintaining stable cross-border capital flows will be further stabilized. At the same time, the extent of monetary policy tightening in major developed economies and its spillover effects have become moderated. Overall, China’s foreign exchange market has been provided with a better foundation and conditions to continue with stable operation.