China’s Huge Trade Surplus Counteracts Outflow Pressure from Fed

China’s Huge Trade Surplus Counteracts Outflow Pressure from Fed

China’s massive trade surplus helped to offset capital outflows in the first half of the year, anchoring its balance of payments even as the Federal Reserve’s aggressive interest rate hikes fuel outflows from developed and emerging markets alike.

The country’s net foreign exchange settlement, which measures onshore conversion of foreign currencies into yuan, stood at $85.2 billion for the first half of the year, extending gains over the past two years. Cross-border receipts and payment, another gauge of flows, also recorded a surplus of $83.4 billion, according to data from the State Administration of Foreign Exchange

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