Core Insights - The external environment has become increasingly complex and variable since 2025, with rising unilateralism and protectionism, leading to a slowdown in global economic and cross-border trade growth [1] - China's macro policies are being implemented more actively to expand domestic demand and effectively respond to external challenges, resulting in overall stable economic operation and continued consolidation of high-quality development [1] Group 1: Foreign Exchange Market Performance - In the first half of the year, China's foreign exchange receipts and payments showed several characteristics: steady increase in foreign-related receipts and payments, continued net inflow of cross-border funds, basic balance in foreign exchange market supply and demand, active foreign exchange market trading, and stable foreign exchange reserve scale [1] - The foreign exchange market has effectively responded to external shocks, maintaining overall stability [1] Group 2: Foreign Investment in RMB Assets - Since 2025, foreign investment in RMB assets has remained stable, with foreign holdings of domestic RMB bonds exceeding $600 billion, a historically high level [2] - In the first half of the year, foreign investors net increased their holdings of domestic stocks and funds by $10.1 billion, reversing the net selling trend of the past two years [2] - The proportion of foreign investors holding domestic bonds and stocks is approximately 3% to 4%, with expectations for gradual and sustainable growth in foreign investment in RMB assets supported by a stable macro environment and high-quality financial market development [2] Group 3: Innovation Policies in Free Trade Zones - The foreign exchange bureau plans to promote a series of innovative policies to more free trade pilot zones, focusing on expanding cross-border trade facilitation policies and advancing high-level openness in cross-border investment and financing [3] - Policies include optimizing international trade settlement, expanding the range of trade payment netting, and simplifying processes for cross-border trade [3] - These measures aim to enhance cross-border investment channels and improve financing efficiency, supporting foreign investment and high-level openness [3] Group 4: Outlook for the Foreign Exchange Market - The foreign exchange market is expected to remain stable in the second half of the year, supported by high-quality economic development, steady progress in opening up, and increasing market resilience [4] - The solid foundation for stable operation of the foreign exchange market is backed by a robust economic fundamental, with GDP growth of 5.3% year-on-year in the first half of the year [5] - The contribution of domestic demand to economic growth has increased, with final consumption and capital formation accounting for 77% of growth, up 17 percentage points from the previous quarter [5] Group 5: Resilience of the Foreign Exchange Market - The resilience of the foreign exchange market has improved, enhancing its ability to respond to external shocks [6] - The market has accumulated rich experience in counter-cyclical regulation and has a robust reserve of policy tools to mitigate external risks [6] - The awareness of exchange rate risk among enterprises has increased, with a historical high of 30% in both the foreign exchange hedging ratio and the proportion of RMB cross-border receipts and payments under goods trade [6]