Forex reserves hit highest level in decade
China's foreign exchange reserves stood at the highest level in a decade in September, underscoring the country's growing economic resilience in the face of external shocks, official data revealed on Tuesday.
At the same time, official gold reserves rose for the 11th consecutive month, a trend experts said is likely to continue as the country optimizes its reserve structure amid waning confidence in the US dollar.
The country's foreign exchange reserves increased for the second month in a row in September to $3.3387 trillion, up 0.5 percent or $16.5 billion from the previous month, the State Administration of Foreign Exchange said on Tuesday.
The $3.3387 trillion in reserves marked the highest level since November 2015, when it stood at $3.4383 trillion, according to the foreign exchange regulator. The administration said China's steady economic performance and high-quality development will continue to help keep its foreign exchange reserves generally stable going forward.
Guan Tao, global chief economist at investment bank BOCI China, said that China's foreign exchange reserves hitting their highest level since late 2015 highlights the country's growing capacity to withstand and address external shocks.
Guan said the latest increase was largely driven by the appreciation of global financial assets, while the US Federal Reserve's interest rate cut in September led to slight fluctuations in the dollar. Fluctuations in the dollar change the value of non-dollar reserves in dollar terms.
Wen Bin, chief economist at China Minsheng Bank, said the rise in foreign exchange was also the result of the country's export resilience and the rising appeal of renminbi financial assets.
Diversified trading partners, an optimized product structure and progress in trade talks with the United States have all helped exports remain the cornerstone for stabilizing cross-border capital flows, Wen said, adding that broader access for overseas investors to onshore securities is set to further strengthen the renminbi's international appeal.
Despite global trade uncertainties, the country's exports in goods went up 7 percent year-on-year to $1.7 trillion in the first half of the year, according to the balance of payments data released by the State Administration of Foreign Exchange, leading to a trade surplus in goods of $456.7 billion.
The data also showed that net overseas investment inflows into onshore securities reached $37.3 billion in the same period, surpassing the $26.6 billion for the whole of 2024, with equity investment accounting for three-quarters of the amount.
The administration said the country's official gold reserves came in at 74.06 million ounces at the end of September, up from 74.02 million ounces a month earlier, marking the 11th consecutive month of increase.
This happened as international gold prices hit record highs amid expectations of the US Fed's rate cuts and doubts about its policy independence. The US government shutdown further eroded confidence in the dollar and increased safe-haven demand, sending COMEX gold futures — a benchmark for international gold prices — to a record high of $4,000.1 during Tuesday's trading.
Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, said the general trend of China's central bank increasing gold holdings may continue in order to optimize its reserve structure as international gold prices may remain on an upward trajectory for an extended period.
According to Wang, September saw the smallest addition to China's gold reserves since purchases resumed in November 2024, with gold making up 7.7 percent of the country's total international reserves — mainly foreign exchange and gold — versus a global average of 15 percent.
Wang added that the rising holdings of gold would also facilitate renminbi internationalization, while the country's ample foreign exchange reserves will provide crucial support for maintaining the renminbi exchange rate at a reasonable and balanced level.
zhoulanxv@chinadaily.com.cn
