China Bank Forex Settlement Surplus Reaches $35.8 Billion in May as Foreign Investors Net Buy Domestic Stocks and Bonds

Foreign investors were net buyers of domestic stocks and bonds in May, and the foreign exchange market operated generally smoothly.

Data released by the State Administration of Foreign Exchange (SAFE) on June 15 shows that in May 2026, banks recorded foreign exchange settlements of $243.9 billion and foreign exchange sales of $208.1 billion. In the first five months of 2026, banks cumulative foreign exchange settlements reached $1,267.5 billion, with cumulative sales of $1,053.0 billion.

Li Bin, Deputy Administrator and Spokesperson of SAFE, stated in response to questions about the May 2026 foreign exchange market that international financial markets continued to experience volatility and adjustment since May, while China’s foreign exchange market remained generally stable.

Li Bin noted that cross-border transactions were active in May. Cross-border receipts and payments by non-bank sectors, including enterprises and individuals, totaled $1.5 trillion, up 22% year-on-year. Foreign exchange market turnover reached $3.4 trillion, comparable to the same period last year.

Meanwhile, net cross-border capital inflows remained broadly stable. In May, net cross-border capital inflows by non-bank sectors reached $62.5 billion, up 1% month-on-month. The bank foreign exchange settlement surplus was $35.8 billion, down 11% from the previous month. Goods trade remained the primary channel for net capital inflows, while services trade continued to post a deficit. Dividend payments by foreign-invested enterprises increased seasonally, while foreign investors were overall net buyers of domestic stocks and bonds.

Additionally, foreign exchange market expectations remained stable. Li Bin noted that the settlement rate for foreign exchange income and the purchase rate for foreign exchange expenditures by enterprises were essentially flat month-on-month in May, indicating that the willingness to settle and purchase foreign exchange among various market participants remained stable, with transactions primarily conducted in an orderly manner based on actual demand.