China’s Foreign Exchange Market Maintains Stability in May Despite Global Volatility

This file photo shows the People’s Bank of China in Beijing, capital of China. [Photo/Xinhua]

China’s foreign exchange market demonstrated resilience in May, maintaining overall stability even as international financial markets experienced ongoing fluctuations, according to data released by the State Administration of Foreign Exchange.

Li Bin, the administration’s deputy head and spokesperson, highlighted that cross-border receipts and payments through enterprises, individuals, and non-banking sectors reached $1.5 trillion in May, marking a 22% year-over-year increase. Meanwhile, total foreign exchange market transactions amounted to $3.4 trillion, reflecting minimal change compared to the same period last year.

Cross-border capital inflows showed modest growth, with non-banking sectors recording net inflows of $62.5 billion—a 1% rise from April. Commercial banks, however, reported a settlement surplus of $35.8 billion, representing an 11% month-over-month decline.

Li noted that trade in goods remained the primary driver of net capital inflows, while trade in services continued to operate at a deficit. Additionally, dividend distributions by foreign-funded enterprises increased seasonally, and foreign investors maintained net buying activity in Chinese stocks and bonds.

Market sentiment remained steady throughout May, with participants exhibiting consistent demand for foreign exchange transactions based on genuine economic needs, and all activities proceeding in an orderly fashion.

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