The physical examination report of the foreign economic department in the third quarter: the ability of independent balance of payments was further enhanced, and the foreign department steadily enhanced the autonomy of the central bank's monetary policy, but we should also guard against liquidity risks

In the third quarter, under the circumstances of high growth in exports of goods and a large current account surplus, the capital account deficit expanded and the international balance of payments tended to balance independently; Improve the degree of currency mismatch in the private sector and enhance the autonomy of the central bank's monetary policy; Enterprises and institutions still need to pay close attention to the liquidity risk under the background of monetary tightening by the Federal Reserve.

In the third quarter, the current account continued to record a surplus. After excluding the newly allocated SDR quota, the deficit of capital account (including net error and omission) expanded month on month, and the online capital account (excluding net error and omission) turned from surplus to deficit in the previous quarter, indicating that the ability of independent balance of payments was further enhanced.

In the third quarter, the current account surplus stopped falling and rebounded. Among them, the expansion of goods trade surplus and the narrowing of initial income deficit are the main reasons; The deficit in trade in services continued to expand, reflecting the impact of the improvement in the margin of cross-border travel and the increase in travel expenditure over the same period.

In the third quarter, the capital account deficit expanded month on month. Among them, foreign direct investment has fallen for two consecutive quarters. In the future, we need to focus on the risk that the inflow rate will continue to slow down; Other investments turned into deficits, mainly due to the decrease of overseas foreign exchange deposits of financial institutions, resulting in the net outflow of currency and deposit liabilities.

By the end of September, the scale of private sector external net debt and its proportion in nominal GDP had decreased compared with that at the end of June, which was much lower than that before the "August 11" foreign exchange reform in 2015, reflecting that the degree of currency mismatch of private sector had significantly improved. This is an important reason why the Central Bank of China still adheres to the monetary policy dominated by China and announced the reduction of reserve requirements and interest rates in December.

By the end of September, China's foreign debt balance (excluding SDR allocation) had decreased month on month, mainly contributed by the banking sector. Since 2020, the growth of foreign debt balance has been mainly concentrated in the broad government and banking sectors, mainly due to the increased holdings of a large number of RMB treasury bonds and policy financial bonds by overseas institutions. Currency mismatch still exists for overseas creditors, and their behavior of avoiding exchange rate risk may still aggravate the fluctuation of RMB exchange rate.

By the end of September, China's short-term foreign debt balance had decreased month on month, accounting for 45% of foreign exchange reserves, far below the international warning line of 100% and the proportion of other major countries, indicating that China's foreign debt risk is generally controllable, but it still needs to focus on individual risks.

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