Core Viewpoint - China's foreign exchange market remains active, with significant growth in cross-border receipts and payments in August, indicating a stable development in trade and investment activities [1] Group 1: Cross-Border Receipts and Payments - In August, non-bank sectors, including enterprises and individuals, recorded cross-border receipts and payments of $1.3 trillion, representing an 8% year-on-year increase [1] - Both current account and capital account cross-border receipts and payments experienced growth, reflecting a robust economic environment [1] Group 2: Trade and Investment Development - The steady development of cross-border trade and investment is highlighted, suggesting positive trends in economic activities and international engagement [1]

Core Viewpoint - The latest foreign exchange data indicates that China's net cross-border capital inflow reached 127.3 billion USD in the first half of the year, with a 46% quarter-on-quarter increase in the second quarter, continuing the net inflow trend since the second half of last year, reflecting active cross-border trade and investment activities [1][7]. Group 1: Cross-Border Capital Flow - In the first half of the year, the total cross-border income and expenditure of non-bank sectors, including enterprises and individuals, amounted to 7.6 trillion USD, marking a year-on-year growth of 10.4%, the highest for the same period in history [4]. - The net inflow of cross-border funds for enterprises and individuals reached 127.3 billion USD, continuing the net inflow trend since the second half of last year [7]. Group 2: Foreign Exchange Market Activity - The foreign exchange market saw a trading volume of 21 trillion USD in the domestic RMB foreign exchange market, reflecting a year-on-year increase of 10.2% [15]. - The bank's foreign exchange settlement and sales amounted to 25.3 billion USD, indicating rational and orderly trading behavior among enterprises and individuals [11]. Group 3: Foreign Exchange Reserves and Currency Fluctuations - As of the end of June, China's foreign exchange reserves stood at 3.3174 trillion USD, an increase of 115.1 billion USD compared to the end of 2024 [18]. - The RMB appreciated by 1.9% against the USD in the first half of the year, with the exchange rate fluctuating between 7.15 and 7.35 [21].

Core Insights - The foreign exchange market in China has shown resilience amidst complex and volatile external conditions, maintaining stability and demonstrating strong performance in the first half of 2025 [1] Group 1: Foreign Exchange Market Performance - The scale of foreign exchange receipts and payments has steadily increased, with a total of $7.6 trillion in cross-border income and expenditure, marking a 10.4% year-on-year growth, the highest for the same period historically [2] - There has been a net inflow of cross-border funds amounting to $127.3 billion from non-bank sectors, continuing the trend of net inflows since the second half of last year, with a 46% quarter-on-quarter increase in Q2 [2] - The foreign exchange market has maintained a basic balance in supply and demand, with a total deficit of $25.3 billion in bank foreign exchange transactions, showing significant monthly fluctuations [2] Group 2: Currency Stability and Market Expectations - The RMB exchange rate has remained stable, appreciating by 1.9% against the USD in the first half of the year, fluctuating between 7.15 and 7.35, which has helped stabilize the macro economy and international payments [4] - Market expectations for the RMB remain stable, with no significant unilateral appreciation or depreciation anticipated, reflecting rational trading behavior among market participants [4] - The international balance of payments has remained fundamentally balanced, with direct investment inflows into China showing a 16% year-on-year increase [4] Group 3: Attractiveness of RMB Assets - The scale of foreign investment in RMB-denominated bonds has risen, with foreign holdings exceeding $600 billion, indicating a historically high level of interest [5] - Foreign investors have net increased their holdings in domestic stocks and funds by $10.1 billion, reversing a two-year trend of net reductions, with significant increases noted in May and June [5] - The demand for diversified global asset allocation has created favorable conditions for foreign investment in China, with 30% of surveyed central banks indicating plans to increase their allocation to RMB assets [7]