China’s foreign exchange reserves stood at $3.2224 trillion at the end of June 2024. The amount shrank by 0.3 percent compared to the previous month, according to the State Administration of Foreign Exchange (SAFE). SAFE attributed the decrease to the combined impact of currency translation and asset price changes.
Factors affecting foreign exchange reserves
SAFE explained that the U.S. dollar index and global financial asset prices climbed in June, affected by factors like major economies’ monetary policies, market expectations, and macroeconomic data. However, the Chinese economy has sustained its recovery momentum and continued its high-quality development, which is conducive to maintaining the stable scale of the country’s foreign exchange reserves.
Stable gold reserves
China’s gold reserves remained unchanged in June at 72.8 million ounces, equivalent to about $169.7 billion, as reported by the People’s Bank of China.
Rapid growth in service trade
In the first five months of 2024, China’s service trade continued to experience rapid growth. The total value of service imports and exports reached 3.02 trillion yuan ($415.6 billion), a 16 percent year-over-year increase. Exports amounted to approximately 1.22 trillion yuan, up 11 percent, while imports stood at 1.8 trillion yuan, with a robust growth of 19.6 percent. This resulted in a service trade deficit of around 580 billion yuan.
Decline in foreign direct investment
However, in the same period, foreign direct investment (FDI) in China declined by 28.2 percent to reach 412.5 billion yuan ($57.94 billion) compared to the same period last year. Despite the drop in FDI, the Chinese Ministry of Commerce reported that 21,764 new foreign-invested firms were established across China, representing a 17.4 percent increase.
Read more: People’s Bank of China keeps interest rates unchanged in line with expectations
Stability in the logistics sector
China’s logistics sector maintained stability in the January-May period, extending an upward recovery trend. Social logistics grew by 5.9 percent year-over-year, reaching 135.3 trillion yuan (approximately $18.62 trillion). Industrial product logistics increased by 5.7 percent year-on-year, while industrial manufacturing climbed 6.1 percent. Logistics for imported goods saw a 5.9 percent year-over-year rise, 0.9 percentage points lower than the January-April period, as imports of intermediate goods like integrated circuits, automobiles, and chassis picked up, while logistics for imported bulk commodities slowed down.
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