Core Viewpoint - The foreign exchange market in China has shown resilience and vitality in the first half of 2023, with a steady increase in foreign exchange receipts and a net inflow of cross-border funds, exceeding market expectations [1][2]. Group 1: Foreign Exchange Market Performance - In the first half of 2023, the net inflow of cross-border funds from non-bank sectors reached $127.3 billion, continuing the trend from the second half of the previous year, with a 46% quarter-on-quarter increase in Q2 [1]. - The foreign exchange market maintained a basic balance in supply and demand, with active trading and stable foreign exchange reserves [1][2]. Group 2: Capital and Financial Account Analysis - The increase in the current account surplus corresponds to an expansion of the capital and financial account deficit, which should not be interpreted as increased capital outflow pressure [2]. - The capital and financial account deficit is primarily due to increased outward investment by domestic entities, while foreign investment in China remains net inflow [2]. Group 3: Attractiveness of Renminbi Assets - The Renminbi appreciated by 1.9% against the US dollar in the first half of 2023, with the exchange rate fluctuating between 7.15 and 7.35, indicating stability and serving as an automatic stabilizer for the macroeconomy and international payments [3]. - Foreign investment in Renminbi-denominated bonds has increased, with foreign holdings exceeding $600 billion, and net foreign purchases of domestic stocks and funds reached $10.1 billion in the first half of 2023 [3][4]. Group 4: Future Outlook for Foreign Investment - The foreign investment in Renminbi assets is expected to have stable and sustainable growth, supported by a robust economic environment and improved financial market conditions [3][4]. - Approximately 30% of central banks surveyed indicated plans to increase their allocation to Renminbi assets, reflecting a growing global interest [4]. Group 5: Policy Initiatives for Trade and Investment - The State Administration of Foreign Exchange (SAFE) is implementing measures to enhance trade facilitation, cross-border investment, and financing, including reforms to streamline foreign exchange business processes [6][7]. - SAFE plans to expand innovative policies in free trade zones to promote cross-border trade and investment, including optimizing international trade settlement and enhancing the efficiency of foreign debt registration [7][8].

Core Viewpoint - The State Administration of Foreign Exchange (SAFE) has released data indicating a significant increase in foreign investment in China's stock and fund markets, signaling a positive outlook for the Chinese market despite a complex external environment [1][3]. Group 1: Foreign Investment Trends - In the first half of 2025, foreign investors net increased their holdings in domestic stocks and funds by $10.1 billion, reversing a two-year trend of net reductions [3][4]. - The net inflow of foreign capital into China's stock market was particularly strong in May and June, with a total of $18.8 billion, reflecting a growing willingness of global capital to allocate resources to the Chinese market [3][4]. - The total foreign holdings of domestic RMB bonds exceeded $600 billion, indicating a sustained interest in Chinese debt instruments [4]. Group 2: Cross-Border Capital Flows - The total cross-border income and expenditure of non-bank sectors reached $7.6 trillion, a year-on-year increase of 10.4%, marking a historical high for the same period [3][4]. - Non-bank sectors experienced a net inflow of $127.3 billion in cross-border funds, continuing the trend of net inflows observed since the second half of the previous year, with a 46% quarter-on-quarter increase in the second quarter [3][4]. Group 3: Foreign Exchange Market Developments - The total trading volume in the domestic RMB foreign exchange market reached $21 trillion in the first half of the year, a 10.2% increase year-on-year, with spot and derivative transactions accounting for 35% and 65% respectively [4]. - As of the end of June, China's foreign exchange reserves stood at $3.3174 trillion, an increase of $115.1 billion from the end of 2024, indicating a stable upward trend in reserves [4]. Group 4: Policy Measures and Market Stability - SAFE announced plans to promote innovative pilot policies across more free trade zones, aiming to enhance cross-border trade facilitation and investment openness [5][6]. - The agency is preparing to eliminate the registration requirement for foreign direct investment reinvestment in China, which is expected to streamline processes and reduce operational costs for foreign enterprises [6]. - The exchange rate of the RMB against the USD appreciated by 1.9% in the first half of the year, maintaining stability within a range of 7.15 to 7.35, which serves as an automatic stabilizer for the macroeconomy and international balance of payments [8].

Core Insights - The State Administration of Foreign Exchange reported that in the first half of 2025, the total cross-border income and expenditure of non-bank sectors reached $7.6 trillion, marking a year-on-year increase of 10.4%, the highest for the same period in history [1][3] Group 1: Cross-Border Transactions - The cross-border income and expenditure of enterprises and individuals amounted to $7.6 trillion, with a 10.4% year-on-year growth, and the proportion of RMB in cross-border transactions reached 53% [3] - The total settlement and sale of foreign exchange by banks was $2.3 trillion, reflecting a 3% year-on-year increase, the second highest for the same period historically [3] - There was a net inflow of cross-border funds amounting to $127.3 billion, continuing the net inflow trend since the second half of last year, with a 46% quarter-on-quarter growth in Q2 [3] Group 2: Foreign Exchange Market Dynamics - The foreign exchange market showed basic balance, with a settlement deficit of $25.3 billion in the first half, but monthly trends indicated fluctuations from deficit to surplus [3] - The foreign exchange income settlement rate was stable at 60%, while the foreign exchange expenditure settlement rate decreased by 3 percentage points to 65% [3] - The total trading volume in the domestic RMB foreign exchange market reached $21 trillion, a 10.2% year-on-year increase, with spot and derivative transactions accounting for 35% and 65% respectively [4] Group 3: Foreign Exchange Reserves and Currency Stability - As of the end of June, China's foreign exchange reserves stood at $3.3174 trillion, an increase of $115.1 billion from the end of 2024 [4] - The RMB exchange rate remained stable, appreciating by 1.9% against the USD, fluctuating between 7.15 and 7.35 [5] - The current account surplus has been steadily increasing, with direct investment inflows into China reaching $31.1 billion, a 16% year-on-year increase [5]

Core Viewpoint - The foreign exchange management authority indicates a net inflow of foreign capital into domestic stocks and a positive trend in foreign investment in Chinese assets, reflecting resilience in China's foreign trade and overall economic stability [1][2]. Group 1: Foreign Capital Inflows - In April, foreign capital investment in domestic stocks turned into net buying, indicating a shift in investor sentiment [1]. - Non-bank sectors, including enterprises and individuals, experienced a net inflow of $17.3 billion in cross-border funds in April [1]. - Foreign investment in domestic bonds increased by $10.9 billion in April, maintaining a high level of interest in Chinese assets [1]. Group 2: Foreign Trade and Economic Indicators - China's foreign trade showed resilience, with a net inflow of $64.9 billion in goods trade, sustaining a high scale [1]. - The foreign exchange market demonstrated stability, with bank settlements and sales increasing by 12.8% and 13.9% month-on-month, respectively [2]. - The settlement rate for foreign exchange rose to 64.4%, up 6.9 percentage points, while the purchase rate increased to 65.4%, up 1.0 percentage point [2]. Group 3: Policy and Market Confidence - Recent policies aimed at expanding domestic demand and supporting the economy are expected to bolster market confidence and stabilize the foreign exchange market [2]. - The central government's measures, including interest rate cuts and reserve requirement ratio reductions, are designed to enhance support for the real economy [2]. - Progress in high-level economic talks between China and the U.S. is anticipated to contribute to a healthier and more stable bilateral trade relationship [2].

Core Viewpoint - The article discusses the recent changes in the cross-currency basis swap, indicating a shift in investor preferences away from dollar-denominated assets towards euro and yen-denominated assets, influenced by geopolitical risks and U.S. fiscal uncertainties [4][6][8]. Group 1: Cross-Currency Basis Swap Dynamics - Analysts from banks like Morgan Stanley and Goldman Sachs have noted a recent shift in the cross-currency basis swap, which measures the additional cost of exchanging one currency for another beyond cash market borrowing costs [4]. - Increased demand for specific currencies leads to a rise in this additional cost or premium, while decreased demand can lower it or even turn it negative [5]. - The preference for dollar liquidity has weakened over time, particularly against the euro, which may result in higher borrowing costs in euros compared to dollars [6]. Group 2: Investor Behavior and Market Trends - The recent changes in cross-currency basis swaps suggest a declining willingness among investors to purchase dollar-denominated assets, while interest in euro and yen-denominated assets is increasing [6][8]. - The dollar index has dropped over 8% this year, marking the worst annual start in its twenty-year history, coinciding with a broader questioning of the dollar's role as a safe haven [7]. - There is a notable trend of cross-border capital flows, particularly from the U.S. to Europe, as indicated by analysts from BNP Paribas and Goldman Sachs [8][9]. Group 3: Future Implications - Goldman Sachs posits that the cross-currency basis swap market may see the euro becoming more expensive than the dollar, a rare occurrence in the past two decades [10].

Core Viewpoint - In April, despite extreme tariff pressures, the RMB exchange rate quickly stabilized and rebounded after a brief adjustment, while the multilateral exchange rate continued to weaken. The passive appreciation of the RMB under a weak dollar index should not be overly concerning [3][5][6]. Group 1: RMB Exchange Rate Dynamics - In April, the RMB exchange rate initially fell due to the impact of Trump's tariffs but rebounded quickly, with the onshore RMB rate at 7.2632 and offshore RMB rate at 7.2689 by the end of the month, reflecting a depreciation of 0.2% and 0.1% respectively compared to the previous month [5][6]. - The RMB nominal effective exchange rate index fell by 2.2% in April, which was greater than the 1.4% decline in the dollar index, indicating a broader weakening of the RMB against other currencies [6][7]. - The RMB's actual effective exchange rate weakened due to inflation differentials, which helps maintain the price competitiveness of Chinese exports [7]. Group 2: Cross-Border Capital Flows - Cross-border capital continued to show net inflows, with a historical high of $630 billion in goods trade surplus in April, despite pressures in securities investment [10][11]. - In April, foreign investment in domestic bonds increased by $109 billion, indicating a strong interest in RMB-denominated assets, supported by effective government measures [11][12]. - The net outflow in securities investment was $125 billion, but this was less than the average monthly outflow of $284 billion from October 2024 to January 2025, suggesting limited pressure on cross-border capital outflows [11][12]. Group 3: Market Responses and Government Actions - The Chinese government implemented a series of financial support policies and counter-tariff measures, which helped stabilize market expectations and maintain foreign investment interest in RMB assets [12][10]. - The Central Huijin Investment Company announced plans to increase holdings in ETFs and quality stocks, reinforcing market confidence [12]. - The willingness of market participants to settle foreign exchange transactions increased, with a surplus in bank foreign exchange settlements rising from $63 billion to $166 billion in April [16][17].

Core Viewpoint - The overall cross-border capital flow in China showed a net inflow in April 2025, indicating resilience in foreign trade and a positive trend in foreign investment in RMB assets [2][3]. Group 1: Cross-Border Capital Flow - In April 2025, non-bank sectors, including enterprises and individuals, experienced a net inflow of $17.3 billion [2]. - The net inflow from goods trade was $64.9 billion, maintaining a high level [2]. - Foreign investment in domestic bonds increased by $10.9 billion, reflecting a strong willingness to invest in RMB assets [2]. Group 2: Market Stability - The foreign exchange market showed balanced supply and demand, with bank settlement and sales increasing by 12.8% and 13.9% respectively [2]. - The settlement rate, indicating market willingness to settle, rose to 64.4%, an increase of 6.9 percentage points [2]. - The purchase rate, reflecting the willingness to buy foreign currency, increased to 65.4%, up by 1.0 percentage point [2]. Group 3: Economic Policies and Outlook - Recent policies aimed at expanding domestic demand and supporting the economy are expected to bolster market confidence [3]. - The implementation of monetary easing measures, such as interest rate cuts, is anticipated to further support the real economy [3]. - Progress in US-China trade talks and a reduction in bilateral tariffs are expected to contribute to a stable and sustainable development of economic relations [3].

"外汇市场平稳运行的基础将继续巩固。"国家外汇管理局副局长、新闻发言人李斌表示，金融管理部门实施降 准降息等一揽子政策，进一步加大对实体经济的支持。近期中美经贸高层会谈取得实质性进展，双方发布联合 声明，大幅降低双边关税水平，有助于维护中美经贸关系健康、稳定、可持续发展。 今年前4个月，外汇市场交易理性有序，跨境资金保持净流入。当季银行累计结汇7429亿美元，累计售汇8048 亿美元；银行代客累计涉外收入25902亿美元，累计对外付款25212亿美元。根据记者测算，前4个月企业、个 人等非银行部门跨境资金净流入690亿美元。 今年4月，银行结售汇差额基本均衡，显示市场预期和交易理性有序。当月银行结汇2139亿美元，售汇2182亿 美元，小幅逆差43亿美元。当月4月银行结汇和售汇环比分别增长12.8%和13.9%，市场交易保持活跃。从结售 汇意愿看，4月衡量市场结汇意愿的结汇率为64.4%，环比上升6.9个百分点，衡量购汇意愿的售汇率为65.4%， 环比上升1.0个百分点。 国家外汇管理局5月19日公布的2025年4月银行结售汇和银行代客涉外收付款数据显示，境内外汇供求基本 平衡，跨境资金总体呈现净流入，外资配 ...

今年前4个月，外汇市场交易理性有序，跨境资金保持净流入。今年1—4月，银行累计结汇7429亿美元， 累计售汇8048亿美元；银行代客累计涉外收入25902亿美元，累计对外付款25212亿美元。根据记者测 算，前4个月企业、个人等非银行部门跨境资金净流入690亿美元。 今年4月，银行结售汇差额基本均衡，显示市场预期和交易理性有序。当月银行结汇2139亿美元，售汇 2182亿美元，小幅逆差43亿美元。4月银行结汇和售汇环比分别增长12.8%和13.9%，市场交易保持活跃。 从结售汇意愿看，4月衡量市场结汇意愿和的结汇率为64.4%，环比上升6.9个百分点，衡量购汇意愿的售 汇率为65.4%，环比上升1.0个百分点。 银行代客涉外收支反映企业、个人等非银行部门跨境资金流动情况。今年4月，银行代客涉外收入7031亿 美元，对外付款6858亿美元，顺差173亿美元，跨境资金继续保持净流入。 货物贸易跨境资金流入和外资投资境内债券规模是银行代客涉外收支的重要组成部分。从跨境资金流入的 主要渠道看，我国外贸呈现一定韧性，4月货物贸易项下跨境资金净流入649亿美元，保持较高规模。外资 配置人民币资产意愿持续向好，4月外资净增 ...

人民币汇率弹性增强 今年以来，我国外汇市场运行总体平稳。人民币汇率双向浮动，保持相对稳定。4月份以来，美方单边 主义、保护主义行径引发国际金融市场剧烈波动，人民币对美元汇率先贬后升，与4月3日美宣布对贸易 伙伴加征所谓"对等关税"前的水平大体相当。 今年以来，外部环境发生深刻变化，国际金融市场波动加大。我国有力有效应对外部挑战，经济保持回 升向好，外汇市场运行总体平稳。国家外汇管理局数据显示，今年一季度，我国外汇市场交易理性有 序，跨境资金呈现净流入。 跨境资金净流入 一季度，企业、个人等非银行部门跨境资金净流入517亿美元，处于历史同期较高水平。 "主要渠道跨境资金流动平稳有序。"国家外汇管理局副局长、新闻发言人李斌介绍，货物贸易资金净流 入较快增加。一季度，我国外贸克服外部压力呈现较强韧性，货物贸易项下跨境资金净流入2063亿美 元，同比增长1.2倍。外资配置人民币债券增多。2月份至3月份外资净增持境内债券269亿美元，同比增 长84%。服务贸易、外资企业利润汇出总体平稳。一季度，服务贸易跨境资金净流出同比增长25%，其 中旅行项下资金净流出增长12%。 近一段时间，境外机构普遍看好我国债券市场，增持债券 ...