Wang Chunying:

Good afternoon, everyone. Now, I'll brief you on detailed data regarding foreign exchange receipts and payments in the first quarter of 2024. Since the beginning of this year, the external environment has remained complex and fluid, while the Chinese economy maintained recovery momentum. As Mr. Zhu just said, the foreign exchange market demonstrated strong resilience, cross-border capital flows were generally stable and market expectations and transactions remained rational and orderly. 

As for specific data, in the first quarter of this year, the cross-border receipts and payments by non-banking sectors stood at $1.6586 trillion and $1.6555 trillion, respectively, resulting in a surplus of $3.1 billion. Foreign exchange settlement and sales by banks registered $542.2 billion and $567.0 billion, respectively, creating a deficit of $24.8 billion . Here are five specific characteristics:

First, cross-border capital posted small amounts of net inflow. In the first quarter, banks registered a surplus in the balance of foreign-related receipts and payments on behalf of clients. Cross-border capital saw net inflow in January and February, however net outflow occurred in March. This result can be attributed to seasonal factors. In particular, after the Spring Festival, foreign trade enterprises resumed production and procured raw materials in large amounts. Driven by increasing demand for payments for imports, cross-border payments rose. Although, cross-border receipts are expected to grow after products are exported. 

Second, banks saw a small deficit in foreign exchange settlement and sale business. In the first quarter, the monthly average deficit reached $8.3 billion. The bank foreign exchange settlement on behalf of clients decreased by 3% year on year; and foreign exchange sales were almost the same as for the same period in 2023. Currently, enterprises enjoy greater convenience in accessing RMB funds and there are more diverse channels. For example, through a type of foreign exchange swap, enterprises can convert part of foreign capital into RMB for use and agree to convert it back in the future, to replace and reduce a portion of foreign exchange settlement for the current period. 

Third, the foreign exchange settlement ratio and the foreign exchange sales rate both fell but were generally stable. Enterprises showed reasonable willingness in foreign exchange settlement and sales. In the first quarter, the foreign exchange settlement ratio, a measure of customers' willingness to settle foreign exchange, stood at 62.2%, a slight fall of 1.6 percentage points year on year, showing somewhat weakened demand; and the foreign exchange sales rate, a measure of customers' willingness to buy foreign exchange, stood at 66.5%, down 1.8 percentage points, showing that the willingness to buy foreign exchange did not continue to rise. In recent years, domestic entities gradually got used to the two-way fluctuations of RMB exchange rates, with expectations for forex rates being more stable. Enterprises' foreign exchange settlement and sales mainly depend on actual demand. Foreign exchange transactions have become substantially more reasonable. 

Fourth, the scale of forex derivative transactions continued to expand. Business entities' awareness of exchange rate risk neutrality continued to improve. In the first quarter, enterprises managed exchange rate risks through forex derivatives, including forwards, swaps and options, to the amount of $395.8 billion, up 23% year on year; and the proportion of enterprises conducting hedging operations was 28.1%, up 3.2 percentage points from the same period in 2023. In January and February, more than 5,000 enterprises received forex rate risk hedging services for the first time. 

Fifth, the volume of China's foreign exchange reserves remained basically stable. As of the end of March, China's forex reserves reached $3.2457 trillion, a $7.7 billion increase from the end of 2023. The increase is mainly influenced by changes in forex rates and asset prices along with other factors impacting the valuation. 

That is all from me on forex receipts and payments in the first quarter of 2024.