CBN丨China's cross-border capital flows stable: forex official

China Business Now李莹亮 2022-11-23 21:26


Hi everyone. I’m Stephanie LI.


Coming up on today’s program.


  • China’s forex official said the yuan's assets still have strong international appeal;

  • OECD projects global economic growth to slow to 3.1% in 2022 and 2.2% in 2023.

Here’s what you need to know about China in the past 24 hours 


China's cross-border capital flows are stable and there is great potential for global capital to be allocated, given the international appeal of yuan financial assets, an official at the State Administration of Foreign Exchange (SAFE) said on Tuesday.

Since the beginning of 2022, China's foreign-related economic activities have remained active and the foreign exchange market has become significantly more resilient, providing a relatively sound foundation for strong and effective management of cross-border capital flows, said Lu Lei, deputy administrator at SAFE, at the 2022 Financial Street Forum.

According to Lu, in the first three quarters of this year, China had a current account surplus of $310.4 billion, the highest in history and up 56 percent year-on-year.

"There is still a significant net inflow of direct investment and cross-border capital flows are steady. At present, foreign capital accounts for less than 5 percent of China's capital market and bond market. There is great potential for global capital to be allocated," said Lu, adding that the yuan's financial assets still have strong international appeal and relatively independent income performance despite fluctuations in the global financial market.

Nicolas Aguzin, CEO of Hong Kong Exchange and Clearing Limited (HKEX), also said at the forum that with deepening reforms and innovation in connectivity, the size of the Chinese mainland's financial market is expected to increase to more than $100 trillion in the next decade or so. He added that there was significant interest in Chinese assets during his recent visits to Saudi Arabia, the United Arab Emirates and Singapore.

Christopher Hui Ching-yu, secretary for financial services and the treasury of HKSAR, also disclosed that Hong Kong will take measures to support the yuan's internationalization to consolidate Hong Kong's role as an offshore renminbi hub, such as amending laws to expand the exemption range of profits tax to encourage mainland local governments to issue debt in Hong Kong.









  • World growth is set to slide from 3.1 percent this year to 2.2 percent next year, before rebounding slightly to 2.7 percent in 2024, the Organization for Economic Cooperation and Development (OECD) said Tuesday in its latest Economic Outlook. “The United States and Europe are slowing sharply," said the report. The OECD projected the U.S. economy would grow 1.8 percent in 2022, 0.5 percent in 2023, and 1 percent in 2024. Meanwhile, growth in the eurozone would slow from 3.3 percent this year to only 0.5 percent in 2023, before climbing back to 1.4 percent in 2024. The OECD also said that Asia's major emerging-market economies will account for nearly three-quarters of global GDP growth by 2023. 


Next on industry and company news


  • Container throughput at China's ports and waterway cargo transport continued stable growth from January to October 2022, up 4 percent and 4.7 percent, respectively, data from the Ministry of Transport showed Wednesday. China remained the world’s highest level of maritime connectivity, accounting for 8 and 7 respectively of the top 10 ports in the world in terms of cargo throughput and container throughput, according to the ministry. 


  • JD.Com will cut the salaries of senior managers by 10 to 20 percent from Jan. 1 to improve benefits for ordinary staff and ease the pressure on the firm, according to its founder on Tuesday. The Chinese e-commerce giant will set up a 10 billion yuan housing fund to provide interest-free home loans to rank-and-file employees, Richard Liu said in an e-mail to staff, while Liu will also personally chip in 100 million yuan to a relief fund for employees’ children. It also plans to include outsourced staff of Deppon Express that JD bought in March as regular employees, and pay their social insurance premiums.


  • Chinese electric vehicle maker BYD announced today that it would raise official guide prices for models in the Dynasty and Ocean series, as well as those in the Denza brand, by 2,000 to 6,000 yuan due to higher raw material costs and expiration of China's purchase subsidies for new energy vehicles. The price increases will take effect from Jan 1, 2023.


  • Honor, a leading provider of smart devices in China, on Tuesday launched its MagicOS 7.0 operating system, which might be compatible with HarmonyOS and iOS in the future. MagicOS 7.0 consists of four core technologies -- MagicRing, Magic Live, Turbo X and MagicGuard, realizing the interconnection of different chip platforms and operating systems.

    荣耀发布MagicOS 7.0:22日荣耀MagicOS发布暨开发者大会上,荣耀最新一代全场景操作系统MagicOS 7.0正式发布。荣耀 MagicOS 全面升级软件系统架构,打造跨设备无缝协同、跨应用无缝流转的融合生态体验,亮点包括 MagicRing 信任环、Magic Live 智慧引擎、Turbo X 系统引擎、MagicGuard 荣耀安全四大平台级根技术及系统核心服务。

Earnings reports express


  • Shares in Baidu advanced today after the Chinese internet giant reported yesterday a 14 percent surge in operating profit, which refers to profit from its core businesses, in the third quarter from a year ago, marking the first quarterly growth since the second quarter last year. The turnaround was fueled by a gradual recovery in online marketing and the steady growth of its AI-powered businesses. Baidu logged a 16 percent jump in net profit to 5.9 billion yuan in the period, and revenue advanced 2 percent to 32.5 billion yuan. 


Switching gears to financial news


  • Agricultural Bank of China(ABC) signed bank-enterprise strategic cooperation agreements with five property firms on Wednesday, including China Resources Land, China Overseas Land, Vanke Group, Longfor Group and Gemdale Group, in order to develop long-term cooperation on businesses such as loans, mortgages, M&A, and bond underwriting, according to the state-owned lender. Bank of China also announced to provide a 100-billion-yuan credit line to developer Vanke today.


  • China’s tech-savvy STAR Market in Shanghai hosted 486 companies that raised a combined 730 billion yuan through initial public offerings in its first three years. The fundraising accounted for more than 40 percent of IPOs in China’s domestic A-share market during the period, said Cai Jianchun, general manager of the Shanghai Stock Exchange, on Tuesday. Companies traded on the STAR Market have a combined market value of more than 6 trillion yuan.


  • Berkshire Hathaway, the investment company owned by Warren Buffett, has sold 3.23 million Hong Kong-listed shares of BYD for HK$630.33 million, a filing to the Hong Kong Stock Exchange showed on Tuesday. The sale, which has been the fifth cut this year, lowered Berkshire Hathaway's holdings in BYD's H-shares to 15.99 percent on Nov. 17 from 16.28 percent.  


Wrapping up with a quick look at the stock market


  • Chinese stocks traded in a tight range and ended mixed on Wednesday. The benchmark Shanghai Composite rose 0.26 percent, partly helped by the latest round of property financing support policies, while the Shenzhen Component slid 0.27 percent. Hong Kong stocks rebounded after a 5-day losing streak, with the Hang Seng index rising 0.57 percent, and the TECH index gained 1.13 percent.


Biz Word of the Day


  • credit line, also known as a "line of credit" (LOC), is a type of standing loan that allows individuals, businesses, or other organizations to borrow cash when they need it, repay what they have borrowed, and continue borrowing without applying for a new loan.


Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI 

Sound Editor: Stephanie LI

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(作者:李莹亮 编辑:李艳霞)