"Third, the overall stability of China's foreign exchange market is mainly characterized by the stable operation of China's foreign exchange market." At the press conference on foreign exchange revenue and expenditure data for the first quarter held by the State Information Office recently, Wang Chunying, deputy director and spokesman of the State Administration of foreign exchange, said that the two-way fluctuation of the RMB exchange rate has increased and the overall performance is stable; Cross border capital flows are balanced and orderly, and generally maintain a small net inflow; Transactions in the foreign exchange market are rational and orderly, and exchange rate expectations are basically stable. According to the data, in the first quarter, the surplus of foreign exchange settlement and sales of banks was US $58.7 billion, and the surplus of foreign revenue and expenditure of bank customers was US $62.2 billion. Among them, the surplus of foreign exchange settlement and sales and the surplus of foreign revenue and expenditure in January remained at a high level; In February, affected by seasonal factors and changes in the external environment, the surplus of foreign exchange settlement and sales was low, and the foreign-related revenue and expenditure showed a small deficit; In March, the surplus of foreign-related revenue and expenditure recovered to US $10.3 billion, and the surplus of foreign exchange settlement and sales rose to US $26.8 billion. Recently, the Fed has continuously released hawkish signals, and the intensity of interest rate hike and table contraction has significantly exceeded market expectations. In the context of the Fed's interest rate hike, how to view the trend of China's foreign exchange revenue and expenditure in the future? In this regard, Wang Chunying said that for an economy's balance of payments and cross-border capital flows, the Fed's interest rate increase is indeed an important external influence variable, but the fundamental factor is its own macro fundamentals and market basis. As far as China is concerned, the resilience of China's foreign exchange market has been continuously strengthened in recent years, and there are foundations and conditions to adapt to this round of Fed policy adjustment. According to Wang Chunying, the foreign exchange market is mainly supported by the following four aspects: first, the domestic economic operation is generally maintained within a reasonable range and the economic toughness is relatively strong. Since the beginning of this year, China has adhered to the general tone of seeking progress while maintaining stability, continued to make efforts to stabilize growth policies, and increased efforts to support the real economy, all of which have helped stabilize the basic market of the economy. At the same time, China's economic structure is also continuously optimized, and the innovation driven trend is very obvious. The medium and long-term fundamentals of the economy will not change, which will continue to attract all kinds of funds to invest in the domestic market. Second, the basic balance of payments surpluses such as current account and direct investment will still maintain a certain scale and play a role in stabilizing cross-border capital flows. With regard to the current account, China is the only country in the world with all industrial categories recognized by the United Nations. The transformation and upgrading of the manufacturing industry has also continued, and the diversification of trading partners has also made positive progress. Therefore, there is a solid support for maintaining a surplus in trade in goods. In addition, affected by the epidemic, the service trade dominated by travel expenditure also maintained a low-level deficit. It is preliminarily estimated that the current account surplus of the balance of payments increased year-on-year in the first quarter of this year, and the surplus pattern will still be maintained throughout the year. With regard to direct investment, under the background of adhering to the high-level opening-up in China and continuously optimizing the business environment, China's absorption of foreign capital ranked second in the world in 2021, and foreign capital has a strong willingness to invest and start business in China. In addition, the foreign investment of domestic entities has been stable and orderly in recent years, and it is expected that there will be a net inflow of funds under direct investment. Third, the structure of China's foreign assets and liabilities is optimized, and the risk of foreign debt repayment is low. By the end of last year, the ratio of China's full caliber foreign debt balance to GDP was 16%, lower than that of major developed countries and emerging economies in the world, indicating that China's foreign debt level is not high. Moreover, the structure of foreign debt is constantly optimized. By the end of last year, the proportion of financing foreign debt such as deposits and loans and trade financing had decreased by 13 percentage points compared with the end of 2016, when the previous round of foreign debt deleveraging was relatively strong. In recent years, the growth of China's foreign debt mainly comes from the additional allocation of Chinese bonds by foreign capital. At the same time, China has maintained its foreign net assets for a long time. At the end of last year, the scale of China's foreign net assets was close to US $2 trillion, at a high level. China's foreign exchange reserve assets rank first in the world, and the asset scale of the private sector is also increasing, which can well adapt to the changes of external liquidity. Fourth, the exchange rate has played an automatic stabilizer role in regulating the balance of payments, and the maturity of the foreign exchange market has been continuously improved. In recent years, the RMB exchange rate flexibility has been continuously enhanced, which has timely and effectively released the external pressure, the market expectation has remained stable, and the transactions in the foreign exchange market are rational and orderly. At present, the foreign exchange deposits of domestic entities are more than 700 billion US dollars, which is also at an all-time high. Enterprises usually choose the opportunity to settle foreign exchange. The rational trading behavior of "settling foreign exchange at high prices and buying foreign exchange at low prices" can effectively suppress some exchange rate adjustments and contribute to the overall stability of the RMB exchange rate and the smooth operation of the foreign exchange market. "On the whole, although the adjustment factors of the Federal Reserve's monetary policy will be complex and changeable in the future, supported by the above basic, stable and fundamental factors, China's foreign exchange market is expected to continue to operate smoothly, and the cross-border capital flow will show a reasonable and balanced development pattern. The foreign exchange management department will also adhere to the bottom line thinking, closely monitor the adjustment process and spillover impact of the Federal Reserve's monetary policy, and evaluate the operation of China's foreign exchange market in real time And effectively maintain the stability of the foreign exchange market. " Wang Chunying said. With regard to the current rapid narrowing and even upside down of the interest rate gap between China and the United States, and the recent continuous reduction of RMB assets by foreign investors, Wang Chunying responded that the short-term fluctuation of cross-border securities investment is a common feature of the global market, which is a normal phenomenon for the increasingly open financial market, and the phased adjustment of China's cross-border securities investment also belongs to the natural response of the market. The short-term adjustment of cross-border securities investment has not changed the overall equilibrium pattern of cross-border capital flow in China, nor will it change the long-term investment willingness of foreign capital. In the first quarter, cross-border capital flows under China's current account and direct investment maintained a surplus, supporting cross-border revenue and expenditure and maintaining a basic balance between domestic foreign exchange supply and demand. In the future, long-term value investment is still the main consideration of foreign capital inflow. (Xinhua News Agency)