China's Forex Reserves to Maintain Steady Growth

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Last updated at: (Beijing Time) Thursday, May 22, 2003

China's Forex Reserves to Maintain Steady Growth

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China's current account surplus in international payments will decrease moderately, while capital and financial accounts will maintain a surplus, and the foreign exchange reserves will continue to grow steadily.

A report released Thursday by the State Administration of Foreign Exchange (SAFE) predicted that in 2003 China's export growth will continue, but the growth rate will be lower than in 2002 considering the international economic environment. Imports will grow fairly fast due to further tariff cuts and increased domestic demand. As a result, the trade surplus will drop moderately.

At the same time, the deficit in services and forex income accounts will continue to expand, the report said.

The report noted that with the improvement of the investment environment and the opening of more investment areas, foreign direct investment (FDI) will maintain a fast growth momentum. However, considering the negative impact of severe acute respiratory syndrome (SARS), the growth of FDI will be slower in 2003.

The report said that in 2002 China's current accounts realized a fairly big surplus, with forex reserves reaching 286.4 billion US dollars by the end of the year, equivalent to the import volumeof 10.5 months. The ratio of short-term foreign debt to forex reserves was 19 percent, far lower than the international warning line of 100 percent.

It stressed that the good balance of international payments is conducive to deepening economic and financial system reforms, restructuring industries and promoting an all-round and healthy development of the national economy.

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