China’s forex market posts robust performance with record cross-border transactions in first half of 2026

China’s foreign exchange market has maintained steady and active operation with improved overall stability throughout the first half of 2026, supported by continuous institutional opening-up and optimized cross-border trade and investment facilitation policies.

According to official updates from China’s State Council Information Office, competent authorities have stepped up regulatory efforts in the forex sector and rolled out targeted policy support to cushion external market volatility, underpinning sound development of the country’s external economic activities.

Multiple core indicators hit historic highs in the first six months of the year. Combined cross-border receipts and payments via domestic banks reached USD9.2 trillion, representing a 21 per cent year-on-year increase and a record level for the same period. Total bank foreign exchange settlement and sales volume stood at USD2.9 trillion, rising 24 per cent from a year earlier, reflecting vigorous cross-border trade and investment activities.

Onshore RMB foreign exchange trading volume expanded steadily, totalling USD22.1 trillion in the first half of 2026. The 5 per cent annual growth outpaces the full-year growth rate recorded in 2025 by 1.5 percentage points, demonstrating growing market liquidity and trading vitality.

Non-bank sectors including domestic enterprises and individual investors registered a net cross-border capital inflow of USD247.2 billion over the six-month period. Goods trade recorded expanded net capital inflows year on year, while foreign investment inflows into China staged a steady recovery. Service trade income grew at an accelerated pace and narrowed the overall service trade deficit, with outbound investment by domestic entities maintaining stable expansion.

Market expectations remained rational and stable amid global financial fluctuations. Banks posted a forex settlement and sales surplus of USD271.2 billion in the first half of the year. The US dollar index strengthened in June, triggering mild depreciation of the RMB against the US dollar, and corporate settlement behaviours widened the monthly surplus. Forex settlement and sales have remained largely balanced since July.

Market transaction behaviours show orderly and rational sentiment among domestic market participants. The forex settlement ratio stood at 65 per cent and the foreign exchange payment ratio reached 61 per cent in the first half of the year, signalling stable and predictable market sentiment.

China’s foreign exchange reserves continued to grow steadily. The reserve balance rose to USD3.4163 trillion at end-June, up USD58.4 billion from the end of 2025. The forex system has demonstrated strong resilience against external shocks throughout the first half of the year.

Balanced balance of payments is set to sustain in the coming period. Domestic policy frameworks will focus on expanding domestic demand, boosting consumption and effective investment, and promoting balanced import and export development to keep current account surpluses at reasonable and moderate levels in the medium and long term.

Steady institutional opening-up will further expand space for cross-border investment cooperation. Domestic enterprises will continue to diversify global business operations and asset allocation, driving gradual growth in China’s overseas asset scale. Improved high-quality economic development, expanded opening-up, robust foreign trade vitality and strengthened forex market resilience will underpin stable market performance amid persistent complex external conditions.