State Administration of Foreign Exchange: Foreign Investment in Domestic Stocks Further Increased MoM in May

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 May 2025. Li Bin, Deputy Director of the SAFE and spokesperson, answered questions from reporters regarding the foreign exchange market situation in May 2025.

Q: How was the foreign exchange market situation in China in May 2025?

A: In May, the overall supply and demand of foreign exchange at home and abroad were balanced, and the foreign exchange market operated smoothly. Firstly, cross-border capital flows continued to show a net inflow. In May, non-bank sectors, including enterprises and individuals, recorded a net inflow of $33 billion in cross-border capital. Among this, the net inflow of funds from trade in goods remained at a relatively high level, and foreign investors' holdings of domestic stocks increased further compared to the previous month. Net outflows of funds from services trade, dividend distributions by foreign-invested enterprises, and outward direct investment remained generally stable. Secondly, market expectations were stable. In May, bank settlement and sales of foreign exchange turned to a surplus. Enterprises and individuals maintained a stable willingness to settle foreign exchange, while the demand for purchasing foreign exchange pulled back, with market transactions remaining rational and orderly. Currently, China's economy is maintaining an overall stable development trend with steady progress, which will continue to provide strong support for the steady operation of the foreign exchange market.