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People's Daily Online>>China Business

China maintains favorable balance of payments in 2011

By Cui Wenyuan (The Economic Daily)

14:16, April 05, 2012

Edited and translated by People's Daily Online

China's international balance of payments in 2011 continue to keep current account and capital account surplus, according to China's lists of balance of international payments in 2011 published by the State Administration of Foreign Exchange (SAFE) on April 1, 2012.

However, the capital and financial accounts in the fourth quarter of 2011 turned into trade deficit for the first time since the SAFE began publishing the data of the international balance of payments on a quarterly basis in 2010.

According to the list, net international capital inflow reaches 250 billion U.S. dollars in the first three quarters, an increase of 62 percent from 2010. Influenced by the sovereign debt crisis of the United States and European countries, the net international capital inflow began decreasing and the net outflow of the capital and financial accounts was 29 billion U.S. dollars in the fourth quarter. The foreign exchange reserve increases 88.8 billion U.S. dollars year-on-year in the first three quarters and decreases 84.7 billion U.S. dollars year-on-year in the fourth quarter.

In the fourth quarter 2011, the current account of China's international balance of payments shows a surplus, the capital and financial accounts turn into deficit and the international reserve assets keeps increasing. The current account surplus reaches nearly 61 billion U.S. dollars, with about 71 billion U.S. dollars of cargo trade surplus, 15 billion U.S. dollars of service trade deficit, 2.7 billion U.S. dollars of profit surplus and 2.3 billion U.S. dollars of current transfer surplus. The capital and financial accounts deficit reaches 29 billion U.S. dollars, with 49 billion U.S. dollars of net inflow of direct investments, 1.3 billion U.S. dollars of net inflow of portfolio investment and about 81 billion U.S. dollars of net outflow of other investments.

The SAFE said that the ratio of China's current accounts surplus to GDP has gradually dropped to an internationally recognized scope since 2008 because of the transformation of domestic economic growth pattern and adjustment of economic policies concerning foreign affairs. At the same time, it also reflected the change of foreign economic and financial situations and that the RMB exchange rate is gradually becoming rational and balanced.

The SAFE also said that China's international balance of payments in 2012 is anticipated to keep a surplus but the surplus may fluctuate in a low level in a short period of time. In the future, the SAFE will continue positively deal with the international financial crisis, improve the substantial economy of foreign exchange control service, promote such key fields as the trade foreign exchange earnings, precaution and crack down on the inflow of hot money and boost the stable and rapid development of national economy.

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