Foreign Exchange Bureau: Foreign Exchange Reform Does Not Mean &Nbsp Appreciation; High Pressure Against Hot Money Flows.

　　 State Administration of Foreign Exchange In the first half of 12, the balance of payments statement showed that in the two quarter and the first half of the year, China's balance of payments continued to show a "double surplus" pattern, and the balance of payments situation was further improved. At the same time, China's balance of payments report released in the first half of 2010 also pointed out that the foreign exchange bureau will continue to maintain a high pressure against the "hot money" movement. RMB Foreign exchange reform It is not equal to the appreciation of the renminbi. Perfect exchange rate Formation mechanism. More institutions are allowed to engage in QDII business. In the first half of this year, China's securities investment net outflow was US $7 billion 300 million.

Foreign exchange reform is not equal to appreciation.

The foreign exchange bureau also stated in the balance of payments report that the market players should overcome unilateral expectations, adapt to the development trend of two-way floating of RMB exchange rate, and establish a correct sense of exchange rate risk.

In June 19th, the people's Bank of China announced that it would further promote the reform of the RMB exchange rate formation mechanism and enhance RMB exchange rate flexibility. The foreign exchange bureau said that after the resumption of the exchange reform, the market experienced a short period of turbulence. The RMB exchange rate showed a two-way and wide fluctuation. The appreciation expectation was gradually weakened, and the imbalance between foreign exchange supply and demand was easing.

The report pointed out that in the first half of this year, the exchange rate of RMB increased against the US dollar and increased to other major currencies. After the exchange reform was restarted, the RMB to us dollar trading price fluctuated significantly around the middle price in the inter-bank spot foreign exchange market. The maximum daily amplitude of trading price relative to the middle price was 0.21% per day, and the daily amplitude of trading price was 172 basis points per day.

The foreign exchange bureau said that the second half of the year will focus on the reform of import and export verification, continue to promote trade facilitation, upgrade and improve the trade payment and payment verification system, and initiate the verification of export receipts. We should promote capital project management reform in an orderly way, encourage powerful enterprises to carry out transnational operation, provide more policy support for enterprises' "going global", and allow more types of institutions to engage in qualified domestic institutional investor (QDII) business and promote cross-border RMB capital account business development. We will continue to promote the development of the foreign exchange market and enrich the tools of exchange rate risk management. We should strengthen the management of foreign exchange reserves and strive to realize the security, mobility and preservation and appreciation of reserve assets.

Improvement of balance of payments

In the first half of the year, the balance of payments showed that China's current account surplus was 72 billion 900 million US dollars in the two quarter, an increase of 35% over the same period last year. According to the statistics of the balance of payments, the surplus of goods trade was 59 billion 500 million US dollars, the trade deficit of services was 4 billion 500 million US dollars, and the profit surplus was 8 billion US dollars.

The surplus of capital and financial items was 25 billion 800 million US dollars, down 68% from the same period last year, of which 21 billion 500 million yuan was directly invested in direct investment, 9 billion 500 million US dollars in net investment in Securities and 12 billion 400 million US dollars in other investments. {page_break}

In the first half of this year, China's current account surplus was 126 billion 500 million US dollars, down 6% compared to the same period last year. The surplus of capital and financial items was 90 billion US dollars, up 48% compared to the same period last year. The international reserve assets increased by 178 billion US dollars, increasing 8% by the comparable caliber.

It is worth noting that in the first half of this year, China's securities investment net outflow amounted to US $7 billion 300 million, compared with a net inflow of US $20 billion 200 million in the same period last year. Among them, China's net foreign investment outflows amounted to US $7 billion 200 million, a net inflow of US $7 billion 700 million in the same period last year, and a net outflow of foreign investment to China's securities investment of US $50 million, compared with a net inflow of US $12 billion 500 million in the same period last year.

The balance of payments report pointed out that the current account surplus and GDP ratio continued to decline for the past two years, from 6% last year to 5% in the first half of this year. At the same time, the growth of the national reserve assets slowed down, excluding the exchange rate, price and other non trading value changes. The two quarter increased by less than US $13 billion 900 million compared with the first quarter. The balance of payments situation is further improved.

The Foreign Exchange Office expects that the global economy may recover slowly in the second half of this year. China's economy will continue to grow steadily, the balance of payments will still maintain a large surplus, trade in goods will continue to run smoothly, foreign direct investment will flow into large quantities, and cross-border capital arbitrage activities will still exist. However, due to the unstable factors of macro environment at home and abroad, it is possible to increase the fluctuation of China's international balance of payments operation through foreign trade, foreign investment and financial transmission channels.

High pressure strike against "hot money" flows

The balance of payments report pointed out that in the first half of this year, cross-border capital flows in China were significantly fluctuating. In the first quarter, China's foreign-related economy accelerated recovery, and the net inflow of trade related credit items increased rapidly. The difference between China's securities investment and other investments amounted to US $47 billion 600 million. In the two quarter, especially since May, with the development of the European sovereign debt crisis, the uncertainty of the international economic environment has increased, and the appreciation of the renminbi has weakened. Meanwhile, the liquidity of the domestic foreign exchange market has tightened, and the spread of the foreign currency spreads has narrowed. The trend of domestic assets "local currency exchange and foreign currency denominated debt" has been curbed, and the net inflow of cross-border arbitrage funds such as trade financing has slowed down, even reverse closing transactions have been made, and the surplus of securities investment and other investment has been reduced to 2 billion 900 million US dollars.

Relevant foreign exchange officials said that the foreign exchange management department will continue to maintain a high pressure strike against the "hot money" movement, focus on blocking loopholes in supervision, give full play to the joint efforts of cross sectoral supervision, crack down on all kinds of illegal foreign exchange trading activities, and earnestly safeguard the foreign exchange policy environment for the sustainable development of the foreign economy.