A citizen counts the US dollars in Houma City, north China's Shanxi Province, Oct. 11, 2011. The Chinese currency renminbi, or the yuan, strengthened 103 basis points to a record high of 6.3483 against the US dollar on Tuesday, according to the China Foreign Exchange Trading system.Photo: Xinhua

Net purchases by overseas investors on the A-share market hit a monthly record high of $27.7 billion in January, mirroring overseas investors' "active participation" in the Chinese mainland stock market thanks to the rapid revival of China's economy following the optimization of pandemic response, a Chinese official said on Wednesday. 

State Administration of Foreign Exchange (SAFE) Deputy Administrator and spokesperson Wang Chunying said on Wednesday that net inflows of cross-border capital, such as cargo trade and foreign direct investment, have continued to shore up market fundamentals.

In January, the foreign-related surplus in cargo trade grew 9 percent month-on-month to $38.7 billion, almost a record high, according to Wang. 

"The long-term solid fundamentals of the Chinese economy won't alter. The IMF has predicted that China will remain the major driver of the global economy this year. 

All these positive factors will strengthen the attractiveness of yuan assets and make the basis of cross-border capital flows more stable," Wang said.

According to research firm EPFR Global, money is flowing into Chinese mainland and Hong Kong bourses this year in ways not seen since 2018, lifted by a positive attitude toward the Chinese market among global investment banks and investors. 

In a global stock strategy report issued in January, Credit Suisse upgraded China to "overweight," stating that "economic momentum is turning up" in the country. 

US investment bank Goldman Sachs also issued a report in late January, pointing out that Chinese A-shares have become more investable for global investors. It predicted a gain of 16 percent for the MSCI China index this year.

In January, the benchmark Shanghai Composite Index gained more than 5 percent, the most since a surge of nearly 9 percent in November, CNBC reported.

Wang noted that, externally, the extent of developed economies' monetary policy tightening and their spillover effects would ease, which would create the conditions and basis for China's foreign exchange market to stabilize.

In January, the foreign-related receipts and payments surplus of non-banking institutions like enterprises and individuals reached $35.1 billion in US dollar terms, up 52 percent month-on-month. 

Banks' net foreign exchange settlement and sales recorded a surplus of $2.5 billion, data from the SAFE said.