Download → Annual Report of the State Administration of Foreign Exchange (2022)

Administrator's Address

In 2022, facing a complex and challenging global economic landscape and a highly volatile international financial market, the State Administration of Foreign Exchange (the SAFE) adhered to the guidance of Xi's Thought on Socialism with Chinese Characteristics for a New Era, thoroughly studied and implemented the guiding principles of the 20th CPC National Congress, and resolutely implemented the decisions and deployment of the CPC Central Committee and the State Council. The SAFE advanced reform and opening-up in the foreign exchange market, effectively maintaining the stability of the foreign currency market and the security of the national economy and finance, and hence bolstering macroeconomic stability. The SAFE was committed to improving the efficacy of the Party building guided by the principle of enhancing the Party politically, and was dedicated to advancing thorough implementation of rectification work assigned by the central discipline inspections. The SAFE stepped up its efforts in foreign exchange to ease the difficulties of enterprises and advance reform and opening-up. Among these initiatives was the facilitation of cross-border funding for high-tech enterprises and specialized and sophisticated enterprises that produce novel and unique products, the integrated capital pool for multinational corporations’ domestic and foreign currencies (a cross-border capital pool business with an integration of domestic and foreign currency), and improved policies to facilitate foreign exchange receipt and payments in trade for high-quality enterprises. The SAFE also optimized foreign exchange hedging services for enterprises, and improved the administration of funds of foreign investors for investing in China's bond market and the funds of foreign institutions for issuing bonds in China. Meanwhile, the SAFE took measures to ensure the convenient and efficient use of foreign exchange for the Beijing Winter Olympics. In addition, SAFE vigorously cracked down upon illegal cross-border financial operations and maintained the stability and orderly functioning of the foreign exchange market. The SAFE also made efforts to strengthen the administration of foreign exchange reserves and ensured overall stability in the volume of the reserves.

In 2022, China's cross-border capital flows were in a relatively favorable situation. The foreign exchange market demonstrated significant resilience and the cross-border capital flows remained basically balanced. The current account stayed within a reasonable range, generating a surplus of USD 401.9 billion, or 2.2 percent of the GDP. The surplus of the financial account, excluding reserve assets, reached USD 211 billion, forming a balance pattern with the current account surplus. Direct investment remained a stable channel for foreign capital inflows, as the prospects of domestic economy and the vast market continued to attract long-term international capital investment. The sources of foreign funds, including the current account surplus and foreign investment in China, were primarily converted into overseas assets of domestic enterprises, banks, and other market entities. The volume of China's foreign exchange reserves remained basically stable. China's foreign exchange reserves reached USD 3.1277 trillion at the end of 2022.

Looking into 2023, China's foreign exchange market is poised to maintain steady operations, supported by the robustness of macroeconomic fundamentals and the inherent resiliency foreign exchange market. The stability of cross-border capital flows is expected to increase. China's economy is endowed with immense resilience, capacity, and vigor, and China's long-term economic fundamentals will remain sound and unchanged. Meanwhile, China will remain committed to advancing high-quality opening-up, continuously improving the facilitation of cross-border trade, investment, and financing. It will also continue to foster a favorable policy environment for cross-border capital flows. Besides, the RMB exchange rate would be more flexible, market entities would be more capable of managing exchange rate risks, and the role of exchange rate adjustments as an automatic stabilizer for adjustment of international payments and macroeconomy will become increasingly apparent.

In 2023, the SAFE will follow the guidance of Xi's Thought on Socialism with Chinese Characteristics for a New Era and fully implement the guiding principles of the 20th CPC National Congress. Under the centralized and unified leadership of the CPC Central Committee in financial matters, the SAFE will pursue progress while ensuring stability and will uphold fundamental principles and break new ground. It will advance reform and opening-up in the foreign exchange market to drive high-quality development. Furthermore, the SAFE will forestall the risks of external shocks and staunchly maintain security. By doing so, the SAFE will provide a strong guarantee for a good start for building China into a modern socialist country in all respects. Firstly, it will persistently advance full and strict governance over the Party members and train high-caliber cadres who are loyal to the Party, have moral integrity, and demonstrate a keen sense of responsibility. Secondly, the SAFE will provide a steady and progressive improvement in the high-level opening-up of the capital account. It will drive innovation and optimization of foreign exchange administration under the current account, with a specific emphasis on optimizing foreign exchange services for small and medium-sized enterprises (SMEs). In addition, the SAFE with enhance regional openness, encourage innovation, and contribute to the development of special zones. Thirdly, the SAFE will strengthen the monitoring and analysis of the foreign exchange situation, enhance macro-prudential management, and improve expectation guidance. The SAFE will improve the micro-regulation of the foreign exchange market by accelerating the development of a foreign exchange business authenticity management mechanism featuring substantive authenticity examination, diverse approaches, and liability exemption on the grounds of due diligence, safety and high efficiency. The SAFE will take stringent measures against any foreign exchange infractions in order to maintain a healthy and orderly foreign exchange market. Fourthly, the SAFE will enhance the management of foreign exchange reserves with Chinese characteristics to ensure the safety, liquidity and value preservation and appreciation of the foreign exchange reserve.