China's foreign-currency bank deposits up $129.7b in H1

BEIJING - China's bank deposits in foreign currencies increased by $129.7 billion in the first half of this year, a senior official said on Friday.

By the end of June, the balance of foreign-currency bank deposits had surpassed $1 trillion, Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, told a press conference.

Wang attributed the increase in foreign-currency deposits to the surplus of trade in goods. In the first half of 2021, China's cross-border surplus in goods trade neared $160 billion, up 74 percent year-on-year.

The rise in foreign-currency deposits indicates that enterprises' expectations have become more rational, said Wang, citing more stable exchange-rate expectations, more mature foreign-exchange trading and more rational management of local- and foreign-currency funds of market entities in recent years.

The increase in deposits has also helped increase the external assets of banks, which is conducive to achieving balance in international payments, Wang said.

Friday's data also shows that China's outstanding foreign debt stood at $2.5 trillion at the end of March, up 5 percent from the end of last year.

The increase in China's foreign debt was mainly due to the rise in domestic bonds held by overseas investors, said Wang.

Since 2020, foreign purchases of domestic bonds accounted for about half of the increase in total foreign debt, as the Chinese economy took the lead in recovery and China's bond market continued to open up, according to Wang.