SAFE: Foreign Investment in Domestic Stocks Turned to Net Purchase in Late April

According to the website of the State Administration of Foreign Exchange (SAFE), the SAFE recently released data on bank settlement and sales of foreign exchange, as well as bank-mediated cross-border receipts and payments for April 2025. Li Bin, Deputy Director of the SAFE and spokesperson, answered questions from reporters regarding the foreign exchange revenue and expenditure situation in April 2025.

Q: How was China's foreign exchange revenue and expenditure situation in April 2025?

A:Cross-border capital flows generally showed a net inflow.In April, non-bank sectors, including enterprises and individuals, recorded a net inflow of cross-border capital amounting to $17.3 billion. From the perspective of major channels, firstly, China's foreign trade demonstrated certain resilience, with a net inflow of cross-border capital under goods trade reaching $64.9 billion, maintaining a relatively high level. Secondly, foreign investors' willingness to allocate RMB assets continued to improve. In April, foreign investors' net purchases of domestic bonds amounted to $10.9 billion, remaining at a high level. In late April, foreign investment in domestic stocks shifted to net purchases.Thirdly, major outflow channels remained stable and orderly. In April, the net outflow of service trade funds was basically flat MoM. Seasonal increases in profit remittances by foreign-invested enterprises were observed, but they were lower than those in the same period last year. Inbound and outbound foreign direct investment remained basically stable, and cross-border capital flows related to intercompany borrowings and lending shifted from net outflows to a state of basic equilibrium.

Market expectations were stable, and the supply and demand of foreign exchange in the domestic market were basically balanced.In April, bank settlement and sales of foreign exchange increased by 12.8% and 13.9% MoM, respectively, indicating active market transactions. The balance between settlement and sales of foreign exchange was basically even, with market expectations and transactions remaining rational and orderly. In April, the settlement ratio, which measures the market's willingness to settle foreign exchange, was 64.4%, up 6.9 percentage points MoM. The sales ratio, which measures the willingness to purchase foreign exchange, was 65.4%, up 1.0 percentage point MoM.

The foundation for the stable operation of the foreign exchange market will continue to be consolidated.The meeting of the Political Bureau of the CPC Central Committee in late April deployed work related to expanding domestic demand and effectively responding to external shocks, calling for accelerating the issuance of special bonds, increasing the income of low- and middle-income groups, vigorously developing service consumption, etc., effectively boosting market confidence. Recently, financial regulatory authorities have implemented a package of policies, including RRR cuts and interest rate cuts, to further increase support for the real economy. With the implementation and effectiveness of these policies, the positive momentum of China's economic operation is expected to continue to be consolidated, better playing a fundamental role in stabilizing the foreign exchange market. Recently, high-level economic and trade talks between China and the United States have achieved substantive progress, with both sides issuing a joint statement to significantly reduce bilateral tariff levels, which will help maintain the healthy, stable, and sustainable development of China-U.S. economic and trade relations.