Press Spokesperson of the SAFE Answers Media Questions on the Balance of Payments and International Investment Position for 2017 Q2 and H1
The State Administration of Foreign Exchange (SAFE) has recently disseminated the Balance of Payments and International Investment Position for the second quarter and the first half of 2017, and the press spokesperson of the SAFE answered media questions on relevant issues.
Q: Could you brief us on China's balance of payments for the first half?
A: The first half witnessed a twin surplus under the current account and the financial account (excluding reserve assets) and rising reserve assets.
The surplus under the current account was within a reasonable range. In the first half, the current account registered a surplus of USD 69.3 billion, accounting for 1.2% of China's GDP and staying within the reasonable range. In particular, trade in goods in the Balance of Payments recorded a surplus of USD 214.4 billion. The export of goods was USD 1.0269 trillion and the import was USD 812.6 billion, rising by 12% and 18% year on year respectively, suggesting China's foreign trade is being stabilized, with a good momentum for growth.
The financial account (excluding reserve assets) registered a surplus. In the first half, the financial account (excluding reserve assets) hit a surplus of USD 67.9 billion, compared with a deficit of USD 178.7 billion for the same period of the previous year. On the one hand, outbound investments stayed stable. In the first half, the net external financial assets derived from BOP transactions rose by USD 134.2 billion. To be specific, the net ODI assets grew by USD 41.1 billion, the net outbound portfolio investment assets, USD 40.1 billion, and other net investment assets including external deposits and loans, USD 53.6 billion. On the other hand, overseas investors increased their investments in China. In the first half, China's net external liabilities grew by USD 202.1 billion. Specifically, net FDI rose by USD 55 billion, net foreign portfolio investment, USD 20.6 billion, and other net investments such as non-residents' deposits and loans, USD 126.7 billion.
Reserve assets kept rising. In the first half, China's reserve assets went up by USD 29 billion, which was attributed to the BOP transactions (excluding the impact from non-trading factors such as foreign exchange rates and prices), compared with a drop of USD 157.8 billion for the same period of the previous year. To be specific, foreign exchange reserves grew by USD 29.4 billion, while the reserve position in the IMF wend down by USD 400 million.
Looking ahead into the second half, along with the continuous recovery of the world economy, external demand will grow, commodity prices will be further stabilized, the domestic economy will remain within the reasonable range, and the financial market will be further liberalized, indicating China's balance of payments will hopefully find a basic equilibrium.
Q: Could you tell us about China's International Investment Position as at the end of June 2017?
A: As at the end of June 2017, China's external financial assets and liabilities increased from the end of the previous year. China posted USD 1.7515 trillion in net external assets as at the end of June 2017. To be specific, the external assets hit USD 6.6446 trillion, and the external liabilities, USD 4.8931 trillion, up by 2.8% and 4.9% respectively from the end of the previous year (the same below).
All of the external assets were on a steady upward trend. Specifically, direct investment assets increased by USD 52.5 billion or 4.0%; portfolio investment assets went up by USD 49.2 billion or 13.5%; financial derivative assets climbed by USD 700 million or 13.9%; other investment assets increased by USD 23.1 billion or 1.4%; and reserve assets jumped by USD 52.5 billion or 1.7%.
All of the external liabilities continued recovering. In particular, direct investment liabilities rose by USD 58.6 billion or 2.0%; portfolio investment liabilities increased by USD 49.6 billion or 6.1%; financial derivative liabilities fell by USD 1.7 billion or 25.5%; and other investment liabilities went up by USD 120.6 billion or 12.2%.
Looking at the items, we found from external assets that the reserve assets hit USD 3.1504 trillion, 47% of total assets; direct investment assets reached USD 1.3697 trillion, 21% of total assets; portfolio investment assets were USD 414.3 billion, 6% of total assets; financial derivative assets amounted to USD 6 billion, 0.1% of total assets; and other investment assets reached USD 1.7042 trillion, 26% of total assets. In terms of external liabilities, direct investment liabilities hit USD 2.9245 trillion, accounting for 60% of total liabilities, which remained the highest among external liabilities; portfolio investment liabilities reached USD 858.3 billion, 18% of the total liabilities; financial derivative liabilities were USD 4.9 billion, 0.1% of total liabilities; and other investment liabilities amounted to USD 1.1054 trillion, 23% of total liabilities.
Overall, China still takes the top spot worldwide by reserve assets. Its outbound investments are made in an orderly manner and foreign investments rise stably, indicting its international investment position is robust.