Maintain a basic balance between supply and demand in China's foreign exchange market

2023-01-19

According to the data released by the State Administration of Foreign Exchange on January 18, in 2022, the surplus of foreign exchange settlement and sales of banks was 107.3 billion US dollars, and the surplus of foreign income and expenditure of bank agents was 76.3 billion US dollars. The supply and demand of China's foreign exchange market remained basically balanced, and the cross-border capital flow was generally stable. In 2022, in the face of severe shocks in the international financial market, the stable operation of China's foreign exchange market will not come easily. In 2023, what impact will the development and evolution of the internal and external environment have on the foreign exchange field? Xinhua News Agency reporter interviewed Wang Chunying, deputy director and spokesman of the State Administration of Foreign Exchange. Two major supporting factors ensure the stable operation of China's foreign exchange market in 2022. "In 2022, China's foreign exchange market has generally withstood the test, and the RMB exchange rate has fluctuated in both directions and increased in elasticity, maintaining the basic stability at a reasonable and balanced level; China's cross-border capital flow is generally balanced, and the scale of foreign exchange reserves is stable at more than $3 trillion." Wang Chunying said about the overall performance of China's foreign exchange market in 2022. Wang Chunying believes that the stable operation of China's foreign exchange market is mainly due to two major supporting factors, which are manifested as "two resilience enhancements" - the domestic economy, especially the foreign-related economy, is more resilient, and the stable operation of the balance of payments is effectively guaranteed; The foreign exchange market has become more resilient and can better adapt to changes in the external environment. "Basic balance of payments surpluses such as current account and direct investment have played a leading role in stabilizing cross-border capital flows." Wang Chunying said that according to preliminary statistics, the current account surplus will remain high in 2022, and the ratio to gross domestic product (GDP) will continue to be in a reasonable and balanced range; At the same time, foreign direct investment maintained a net inflow. In 2022, the share of RMB in cross-border use will continue to increase. Wang Chunying said: "In 2022, nearly half of China's enterprises' cross-border revenue and expenditure will use RMB, which will help reduce the currency mismatch risk of cross-border transactions." In addition, the exchange rate risk management level of market entities has gradually improved, and the adaptability of enterprises to exchange rate fluctuations has significantly increased. The "macro prudential+micro supervision" management of the foreign exchange market has played a positive role in stabilizing cross-border capital flows, promoting rational transactions in the foreign exchange market, and maintaining a healthy market order. In 2023, China's current account will maintain a reasonable scale surplus. Although the internal and external environment will continue to evolve, Wang Chunying believes that China's current account will continue to maintain a reasonable scale surplus in 2023. Wang Chunying predicted that in 2023, China's trade in goods will still present a relatively large surplus. This is mainly due to three factors: the continuous emergence of new trade growth points, positive progress in the diversification of trading partners, and the vigorous development of cross-border e-commerce and other new forms of trade. "In 2022, China's exports of lithium batteries, solar cells and electric passenger cars will grow by more than 60%." Wang Chunying, for example, said that the export of new energy vehicles has become a new trade growth point. At the same time, in 2022, China's exports to ASEAN and Africa will grow faster than the overall growth rate of exports in the same period, and the diversification of trading partners will show. In terms of service trade, Wang Chunying said that the high-quality development of China's service trade will help promote a more balanced import and export. one side,

Edit:Sun Hongli    Responsible editor:Tang Yuanqi

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