China's cross-border capital flow remains stable in Q1: spokesperson
Official figures show that China's cross-border capital flow remained stable in the first quarter of the year, with foreign exchange reserve showing growth.
According to the State Administration of Foreign Exchange, China's commercial banks bought around 436 billion US dollars of foreign currencies and sold 445 billion dollars in the first quarter of this year, resulting in net forex sales of 9.1 billion dollars.
By the end of March, China's foreign exchange reserves stood at 3.1 trillion U.S. dollars, up 26 billion dollars from the end of last year.
The central parity rate of the Chinese currency renminbi, or the yuan, is 6.6911 against the U.S. dollar on Apr 18, 2019. [Photo: IC]
Foreign exchange administration spokeswoman Wang Chunying said the figures show a stable trend in China's foreign exchange market.
"Growth in the global economy and international trade slowed in the first quarter of 2019. In the meantime, China's economy continued to perform within an appropriate range, maintaining overall stability and making progress. The RMB exchange rate and China's cross-border capital flows remained stable. The supply and demand in the foreign exchange market is basically balanced," Wang said.
Looking to the future, the spokeswoman said this stability in foreign exchange flows is set to continue, in light of the domestic and international environments.
"First, there is sound domestic economic development. Second, the comprehensive opening-up polices provide a solid foundation for the balanced development of cross-border capital flows and investment. Third, the economic and trade consultations between China and the United States have made substantial progress and played an important role in stabilizing market sentiment," Wang said.
The spokeswoman added that China's forex regulator will continue to facilitate cross-border trade and investment, and develop an open and competitive foreign exchange market.
"We will further support innovation in trade patterns and optimize foreign exchange management policies. We will make it easier for foreign investment enterprises to exchange funds, and support qualified and capable domestic enterprises to make outbound investments. Also, in pushing forward the opening up of capital projects, we will reform the institutional investor system, simplify access management rules, and expand the scope of investment. We will standardize the management of RMB bonds issued by overseas institutions in China, and promote the development of the panda bond market in an orderly manner," Wang added.
The government has also stated to reform and simplify the management of cross-border capital for multinational companies. China's pilot free trade zones and the Guangdong-Hong Kong-Macao Greater Bay area, as well as Xiongan New Area, are expected to pilot the reform policies.