Xinhua News Agency, Beijing, April 21st Topic: Stable cross-border capital flow, foreign capital maintains a net inflow trend——Interpretation of the foreign exchange market situation in the first quarter by the State Administration of Foreign Exchange
Xinhua News Agency reporter Liu Kaixiong
The net inflow of capital under trade in goods, the net inflow of foreign direct investment in China, and the overall improvement in the domestic securities market for foreign investment… In the first quarter of this year, despite the complex and changeable external environment, my country’s cross-border capital flow remained stable, and foreign capital continued to grow. The inflow trend continues unabated.
At the press conference of the State Council Information Office of the State Administration of Foreign Exchange on the 21st, Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, said that in the first quarter of this year, my country’s current account cross-border capital flows were stable, and capital flows were stable and stable. sequence.
According to data released by the State Administration of Foreign Exchange, in the first quarter of 2023, the net inflow of funds under trade in goods is still at a relatively high level; the net outflow of funds under trade in services has increased year-on-year, mainly because the resumption of cross-border travel by residents has driven the increase in travel expenditure, but it is still lower than pre-pandemic levels.
“We believe that the improvement in quality and efficiency of my country’s trade in goods and services in recent years will help the current account maintain a surplus of a reasonable scale, and will continue to provide strong support for the smooth operation of the foreign exchange market,” Wang Chunying said.
Wang Chunying believes that thanks to the continuous transformation and upgrading of the manufacturing industry and the integrity and stability of the industrial and supply chains, the competitiveness of my country’s export products has steadily improved. For example, in the first quarter of this year, the export of electric passenger vehicles, lithium batteries, and solar cells increased by 67% in RMB terms, boosting the export growth rate by 2 percentage points, which was further enhanced compared with last year.
At the same time, the diversification of trading partners has shown results. In the first quarter, my country’s exports to ASEAN and countries along the “Belt and Road” increased by 28% and 25% respectively. In addition, digital trade represented by cross-border e-commerce is booming, and cross-border e-commerce exports maintained rapid growth in the first quarter, becoming an important trade method to promote export growth.
Regarding trade in services, Wang Chunying believes that the rapid development of my country’s productive service trade in recent years, especially emerging service industries such as computer information services and business services, will continue to drive the growth of related service trade export revenue. In 2022, my country’s digitally deliverable service trade will achieve a surplus of more than 10 billion US dollars for the first time, reflecting the continuous improvement of the international competitiveness of my country’s digital products and services. As cross-border travel consumption is the main form of my country’s service trade imports, the release of its demand will be a gradual process.
“Integrating the situation of major items such as trade in goods and services, my country’s current account will continue to show a surplus of a reasonable scale in 2023 and remain in a balanced range.” Wang Chunying said.
Direct investment reflects the willingness to invest in the medium and long term, and investors are more interested in a country’s long-term economic development prospects and some basic advantages. From a global perspective, China has been the main destination of foreign direct investment (FDI) in recent years. In the first quarter of this year, my country’s foreign direct investment continued to maintain a net inflow.
Wang Chunying believes that, on the one hand, it is because my country’s macroeconomic situation is stable and the economy has maintained medium-to-high speed growth in the past ten years, and the return on investment of foreign companies in China is stable, which is at a relatively high level in the world; It provides a broad development space for foreign capital. At the same time, my country’s infrastructure is complete, the industrial chain and supply chain system is complete and stable, the economy is moving towards high-quality development, and new economic growth points are constantly emerging, all of which are highly attractive to foreign direct investment.
In 2022, under the pressure of high domestic inflation in the United States, the Federal Reserve will rapidly tighten monetary policy, the total scale of cross-border bond investment absorbed by countries around the world will decrease significantly, and the stock markets of major emerging economies will see capital withdrawals. Foreign investment in my country’s securities market has also been adjusted.
Wang Chunying revealed that in recent months, with the improvement of the internal and external environment, foreign investment in my country’s securities investment has generally improved. In January 2023, the net purchase of domestic stocks by foreign capital hit a record high, and the balance of domestic bonds held by foreign capital rebounded month-on-month in March.
“my country’s economy has recovered steadily, market expectations have been boosted, and foreign investors’ enthusiasm for investing in RMB assets has picked up significantly.” Wang Chunying commented on the current investment in RMB assets by foreign investors, saying that RMB assets have stable comprehensive returns, high investment value, With the characteristics of strong demand for diversified allocation, it is expected that foreign investors will continue to invest in my country’s securities market steadily in the future.
Wang Chunying believes that, in general, the proportion of foreign capital in my country’s bond and stock markets is still relatively low. In the future, as my country’s economy rebounds and the opening of the financial market is steadily advancing, there is still a lot of room for improvement in foreign capital inflows.
