China sees net capital inflow in first three quarters

(ECNS) -- China's cross-border capital has returned to a net inflow during the first three quarters of the year, according to foreign exchange data released by the State Council Information Office on Tuesday.

Banks handling transactions for clients recorded foreign-related income of $5.2594 trillion and payments of $5.2566 trillion, resulting in a surplus of $2.8 billion during this period.

In the same time frame, the foreign exchange settlement and sales deficit amounted to $121.3 billion.

Li Hongyan, deputy director of the State Administration of Foreign Exchange of China (SAFE), stated that the deficit of foreign exchange settlement and sales widened in the second quarter. However, in the third quarter saw a return to a balance. In September, the market recovered to a surplus and foreign exchange settlement increased while sales remained relatively stable.

The foreign exchange market was also active trading, with the total RMB foreign exchange trading volume reaching $30.27 trillion in the first three quarters, an year-on-year increase of 10.1 percent.

The scale of foreign exchange reserves remained stable, standing at $3.3164 trillion by the end of September, up by $78.4 billion compared to the end of 2023.

Foreign investment in RMB assets generally showed a generally good momentum according to SAFE.

Since the start of the year, the returns of RMB bonds remained strong, attracting more foreign investors. As of now, foreign investors hold over $640 billion in RMB bonds, reaching a historic high. Foreign central banks, commercial banks, and other stable institutional investors are the primary holders of these bonds.

Driven by the rise in China’s stock markets, foreign investors have increased their purchases of China’s stocks since late September.

The use of the RMB in global cross-border transactions has also steadily grown, making it a key choice for global investors seeking diversified asset allocation.