Published: 20:42, April 22, 2025
China to support trade, fend off yuan overshooting amid tariff tensions
By Zhou Lanxu
An aerial drone photo shows a view of the Tangshan Port in North China's Hebei province, Jan 13, 2025. (PHOTO / XINHUA)

China will introduce new foreign exchange policies that facilitate cross-border trade and financing while guarding the yuan stability, a senior official said, as part of the country's ramped-up efforts to counter the shock stemming from US tariff measures.

"We will continue to roll out policy measures to support the development of cross-border trade and facilitate cross-border investment and financing, committed to deepening reform and opening-up in the foreign exchange sector," said Li Bin, deputy head and spokesman of the State Administration of Foreign Exchange.

"This will help better stabilize exports and foreign investments," Li said in a statement on Tuesday.

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Li said that policymakers will also strengthen monitoring of the foreign exchange market, maintain exchange rate flexibility and enrich its macro-prudential policy toolkit for cross-border capital flows.

"We will resolutely correct pro-cyclical behavior in the market, guard against the risk of exchange rate overshooting and fend off the risk of abnormal cross-border capital flows, safeguarding the country's economic and financial security."

In the first quarter of 2025, China recorded a net capital inflow of $206.3 billion from trade in goods, a year-on-year increase of 120 percent, the administration said.

During the February-March period, foreign investors made a net increase of $26.9 billion in their holdings of onshore bonds, up 84 percent year-on-year. From April 1 to 18, they made a net purchase of $33.2 billion, maintaining a relatively high level.

Li said the renminbi's role as a diversified global asset is becoming more prominent, with the domestic securities market expected to attract more foreign capital.

"Going forward," he said, "China will introduce new incremental policies in a timely manner in response to changing circumstances, regard expanding domestic demand as a long-term strategic priority and promote the integrated development of technological and industrial innovation, supporting the stability of the renminbi exchange rate."

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SAFE added that the accumulative amount of foreign exchange settlement and sales by banks was $529 billion and $586.6 billion from January to March, respectively.