China News Service, Beijing, July 22 (Reporter Xia Bin) "The remittance of profits (foreign-funded enterprises) does not mean the withdrawal of capital, but it forms a virtuous circle with the inflow of foreign direct investment funds." Deputy Director of the State Administration of Foreign Exchange, Press spokesman Wang Chunying said on the 22nd.
On the same day, the State Administration of Foreign Exchange held a press conference in Beijing. Wang Chunying emphasized at the meeting that since China's good economic development prospects can bring relatively stable returns to international investors, the willingness of foreign businessmen to invest in China for a long time continues to be strong.
In addition to the inflow of new investment capital and shareholder loans, many foreign-invested enterprises reinvest a considerable part of their profits in China.
Compared with other major economies, China's foreign-funded enterprises' profits are reinvested at a relatively high level.
She pointed out that the second and third quarters of each year are the peak seasons for foreign-funded enterprises to remit profits.
Judging from the recent situation, the profit remittance of foreign-funded enterprises this year has maintained a reasonable, orderly and generally stable development trend.
The impact of profit remittance on China's cross-border capital flow and foreign exchange supply and demand is controllable.
Wang Chunying said that the current remittance of profits of foreign-funded enterprises matches the stock scale of China's absorption of direct investment.
In recent years, China's business environment has been continuously optimized. Foreign investors have long been optimistic about the Chinese market. They have invested and established businesses in China. More and more multinational companies have shared the dividends of China's economic growth and reform and opening up, and their operating profits have grown steadily. Therefore, the corresponding profits are remitted out increased accordingly.
From 2020 to 2021, the stock of direct investment in China absorbed by the Chinese corporate sector will increase by an average of 14% annually, and the average annual growth rate of profit repatriation will be around 13%.
Wang Chunying said that the impact of profit remittance on China's balance of payments and foreign exchange market supply and demand is within a reasonable range.
Investment income is an integral part of the current account. In recent years, funds under trade in goods, trade in services and investment income have flowed in and out, jointly maintaining a reasonable and balanced surplus pattern in the current account.
At the same time, the reasonable and orderly repatriation of profits did not affect the overall balance of supply and demand in the domestic foreign exchange market.
Benefiting from the improvement of the internationalization of the RMB and the stable value of the RMB, a considerable proportion of the profits of foreign-funded enterprises are currently remitted in RMB, which has little direct impact on the supply and demand in the domestic foreign exchange market.
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