On May 7, the State Administration of Foreign Exchange (SAFE) released data showing that China’s foreign exchange reserves reached USD 3.4105 trillion at the end of April 2026, an increase of USD 68.4 billion or 2.05% from the end of March, hitting a one-year high. It has remained above USD 3.3 trillion for nine consecutive months, retaining its position as the world’s largest holder of foreign exchange reserves.

The growth was driven by three key factors. First, resilient foreign trade maintained a high goods trade surplus in Q1, supporting steady cross-border capital inflows. Second, RMB assets became more attractive to global central banks and sovereign wealth funds, which increased holdings of Chinese bonds and equities; northbound inflows exceeded RMB 50 billion in April. Third, positive valuation effects emerged from a weaker U.S. dollar and rising non-dollar assets; the PBoC has increased gold reserves for 18 consecutive months (to 74.64 million ounces at end-April), boosting reserve value.

Large forex reserves act as a buffer against external shocks. Amid global geopolitical tensions and market volatility, they ensure import payments and debt servicing, stabilize the RMB exchange rate, and support independent monetary policy, reinforcing confidence in China’s economy.

As China’s recovery continues and reforms deepen, forex reserves are expected to remain stable, underpinning high-quality growth.