China’s foreign exchange reserves edged up by $3.6 billion in May, marking the fifth straight month of growth, according to data released by the State Administration of Foreign Exchange (SAFE) on June 7. The reserves now stand at $3.2853 trillion, a slight 0.11% increase from April’s $3.2817 trillion.
Mixed Market Forces Behind Modest Growth
Industry experts attribute the marginal increase to currency translation effects and fluctuating asset prices. Guan Tao, Global Chief Economist at Bank of China Securities, told Financial Times that while reserves continued their upward trend, the growth rate slowed significantly from April’s $41 billion surge. “The valuation effect was nearly neutral in May,” Guan explained. “The dollar index fluctuated within a narrow range after initial gains, while global financial assets showed mixed performance.” These offsetting factors resulted in minimal net impact on China’s reserve valuation.
Stable Outlook Supported by Trade and Economic Recovery
Looking ahead, Wen Bin, Chief Economist at China Minsheng Bank, pointed to positive developments that could sustain reserve stability. “The recent U.S.-China Geneva Trade Talks Joint Statement and recovering direct exports to America provide strong support,” Wen noted. He added that companies accelerating production shifts to Southeast Asia to mitigate potential tariff risks may further boost export resilience. China’s ongoing economic recovery and quality growth remain fundamental pillars for maintaining stable foreign exchange reserves. The combination of robust trade performance and domestic economic improvement continues to reinforce the nation’s external financial position.
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