State Administration of Foreign Exchange
| 国家外汇管理局 Guójiā wàihuì guǎnlǐ jú |
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| Agency overview | |
|---|---|
| Formed | 1978 |
| Jurisdiction |
 China
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| Headquarters | Beijing |
| Agency executive |
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| Parent agency | People's Bank of China |
| Website | SAFE.gov.cn |
| State Administration of Foreign Exchange | |||||||
| Traditional Chinese | 國家外匯管理局 | ||||||
|---|---|---|---|---|---|---|---|
| Simplified Chinese | 国家外汇管理局 | ||||||
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| Transcriptions | |
|---|---|
| Standard Mandarin | |
| Hanyu Pinyin | Guójiā wàihuì guǎnlǐ jú |
The State Administration of Foreign Exchange (SAFE) of the People's Republic of China is an administrative agency tasked with drafting rules and regulations governing foreign exchange market activities, and managing the state foreign-exchange reserves, which at the end of December 2016 stood at $3.01 trillion for the People's Bank of China. The current director is Pan Gongsheng.
SAFE's existence and role were initially closely guarded secrets, its subsidiaries were minor, but the funds under management have increased significantly in recent years. They were responsible for running SAFE's portfolio across the various time zones, replicating the investments of head office in Beijing.
SAFE created and controlled the Central Huijin Investment, but in September 2007, it ceded control to the newly formed sovereign wealth fund, China Investment Corporation.
With the burgeoning of China's reserves and amidst increasing rivalry between state agencies, there are signs of growing independence of and competition between the subsidiaries.
The current Administrator of SAFE is Yi Gang. Deng Xianhong, Fang Shangpu, Wang Xiaoyi, Li Chao are Deputy Administrators.
The magnitude of China's reserves is disclosed, but not its composition. At the end of 2006, approximately 70 percent of the reserves were in U.S. dollar assets, 20 per cent in euros and 10 per cent in other currencies, according to economist Brad Setser. Most of China's currency reserves are invested in high grade U.S.-dollar-denominated debt, such as U.S. Treasuries, though as early as 2007 it was estimated that SAFE held $100 billion worth of U.S. mortgage-backed securities, hoping to achieve higher returns than those on U.S. Treasuries.
"The Hong Kong subsidiary is notably taking more risk in managing reserves," according to an informed source. The Financial Times reported on 4 January 2008 that the Hong Kong branch had bought stakes of less than 1 percent in both Commonwealth Bank of Australia and Australia and New Zealand Banking Group, respectively Australia's second and third-biggest lender by assets, over the preceding two months. The ANZ purchase has been confirmed by the bank. SAFE also invested in BP and Total in April 2008.
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Wikipedia