China's Foreign Exchange Reserves Increased By $ 3.22 Trillion USD

China's Foreign Exchange Reserves Increased By $ 3.22 Trillion USD

China's foreign exchange reserves increased in May to $ 3.22 trillion (2.647 trillion euros) compared to $ 3.19 trillion (2.62 trillion euros) the previous month, the State Administration reported today. Currency (SAFE).

The difference represents an increase of 0.74%, said the agency.

SAFE deputy director general and chief spokesperson for the institution, Wang Chunying, said in a statement that "foreign exchange transactions operate in a reasonable range" and that "the Chinese foreign exchange market remains stable."

He added that the international financial market is "affected by the pandemic and the progress of vaccination campaigns" and that "most currencies have strengthened against the dollar."

The SAFE representative recalled that "the global economic recovery still faces many uncertainties."

"Meanwhile, China has recovered and continues to advance in its development, which will support the stability of foreign exchange reserves," added Wang.

Import from China

China's imports grew at their fastest pace in 10 years in May, driven by rising commodity prices, while export growth fell short of expectations, probably hampered by disruptions caused by incidents of COVID-19 in the main ports in the south of the country.

Exports in dollars grew by 27.9% in May compared to the previous year, which is a slower growth than the 32.3% registered in April and does not meet analysts' forecasts of 32.1%.

"Exports were somewhat surprising to the downside, perhaps due to COVID cases in Guangdong province, which slowed business volume in the ports of Shenzhen and Guangzhou," said Zhiwei Zhang, chief economist at Pinpoint Asset Management, adding that business volume in Guangdong ports will likely remain sluggish in June.

Major shipping companies have warned their clients of worsening congestion at the Yantian port of Shenzhen in Guangdong province following the recent outbreak.

Meanwhile, Chinese exporters are grappling with rising raw material and freight costs, logistics bottlenecks and a strengthening yuan, which lowers trade competitiveness.

However, a rapid recovery in demand in developed markets and disruptions caused by the virus in other manufacturing countries will likely boost Chinese exports in the coming quarters, analysts say.

Created on 11th Jun 2021