Foreign investment in China is showing a positive and positive trend
According to the State Administration of Foreign Exchange, China's foreign exchange market is operating steadily and showing strong resilience in 2023. The RMB exchange rate fluctuates in both directions, stabilizing and rebounding since November, maintaining basic stability at a reasonable equilibrium level, and the expected exchange rate is generally stable; The basic balance of international payments and foreign exchange reserves remained stable at over 3.1 trillion US dollars throughout the year.
In December 2023, China's cross-border capital flow became more balanced, and foreign exchange transactions remained rational and orderly. Firstly, there is a surplus in cross-border income and expenditure, with non bank sectors such as enterprises and individuals experiencing a surplus of 14.1 billion US dollars in cross-border income and expenditure in December 2023. The improvement trend has been further consolidated on a monthly basis since the fourth quarter; The second is that the bank's foreign exchange settlement and sales are basically balanced, and the scale of bank foreign exchange settlement and sales is basically equivalent in December; Thirdly, the willingness of enterprises and other entities to settle and purchase foreign exchange is relatively stable.
The trade of goods has maintained a relatively high net inflow of funds, and recent foreign investment in China has shown a positive trend. In December 2023, the net inflow of cross-border funds under goods trade increased by 12% year-on-year and 37% month on month, respectively. The willingness of foreign investment to invest in the Chinese market and allocate RMB assets has steadily increased. In recent months, foreign investment has continued to increase its net holdings of domestic bonds. The net increase in November was the second highest in history, and in December, it further increased its net holdings by 24.5 billion US dollars, continuing to be at a high level in the past two years; In December, the net inflow of foreign direct investment capital significantly increased, with a net inflow scale exceeding 10 billion US dollars.