Core Viewpoint - The State Administration of Foreign Exchange (SAFE) has signaled a stable exchange rate and reported that foreign investment in domestic stocks and funds increased by over $10.1 billion in the first half of 2025, indicating a growing global interest in the Chinese market [2][3]. Group 1: Foreign Investment Trends - In the first half of 2025, foreign investment in domestic stocks and funds amounted to $10.1 billion, reversing a two-year trend of net reductions [4]. - The net inflow of foreign capital into the domestic stock market increased significantly in May and June, reaching $18.8 billion, reflecting enhanced global capital allocation intentions towards the Chinese market [4]. - The total foreign investment in RMB-denominated bonds has also risen, with foreign holdings exceeding $600 billion, marking a historically high level [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%, setting a historical record for the same period [4]. - Non-bank sectors experienced a net inflow of $127.3 billion in cross-border funds, continuing the net inflow trend observed since the second half of the previous year, with a 46% quarter-on-quarter increase in the second quarter [4]. Group 3: Foreign Exchange Market Activity - The total trading volume in the domestic RMB foreign exchange market reached $21 trillion in the first half of 2025, reflecting a year-on-year growth of 10.2% [6]. - The trading volumes for spot and derivative transactions were $7.4 trillion and $13.6 trillion, accounting for 35% and 65% of the total trading volume, respectively [6]. Group 4: Foreign Exchange Reserves - As of the end of June 2025, 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 [7]. Group 5: Future Measures by SAFE - SAFE plans to expand innovative pilot policies to more free trade zones across the country, enhancing cross-border trade facilitation and investment openness [9]. - The agency is preparing to eliminate the registration requirement for foreign direct investment reinvestment in China, aiming to streamline processes and reduce operational costs for foreign investors [9]. - SAFE will also increase the borrowing limit for certain innovative enterprises to $20 million, facilitating access to foreign debt [10]. Group 6: Exchange Rate Stability - SAFE has reassured the market regarding exchange rate stability, noting that the RMB's market-based formation mechanism has improved, allowing for timely responses to external pressures [12]. - The RMB appreciated by 1.9% against the USD in the first half of 2025, with fluctuations maintained within a reasonable range, contributing to macroeconomic stability [13].