China’s First Half Current Account Surplus at $85.9 Billion: SAFE

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China’s State Administration of Foreign Exchange (SAFE) says data for the first half of 2020 indicates that the country’s balance of payments remains in “even territory.”

SAFE data indicates that in the first half of 2020 China’s current account surplus was USD$85.9 billion, equal to 1.3% of Chinese GDP.

SAFE said the figure means it “continues to remain in rational territory,” with net inflows of direct investment, and “lively” bi-directional movements of securities market funds

SAFE official Wang Chunying (王春英) said that China’s first half international balance of payments data evinced several key trends:

  1. A YoY rise in the goods trade surplus, which increased by 2% to USD$184.4 billion yuan, including $23.1 billion the first quarter and $161. billion in the second quarter. According to Wang these figures indicate that the Chinese economy is gradually recovering.
  2. A narrowing of the services trade deficit, which was $76.5 billion for the first half of 2020, for a YoY contraction of 40%. The tourism deficit of $61.7 billion marked a YoY contraction of 44%, with the COVID-19 pandemic hitting outbound travel especially hard. The transport deficit was $19.1 billion, for a YoY contraction of 31%, primarily due to a drop in goods imports.
  3. Direct investment extended its surplus, with bi-direction flows of funds on the security market remaining active. The direct investment surplus for the first half was $18.7 billion, with $47.2 billion in outbound direct investment from China and $65.9 billion in inbound direct investment. Wang said that this signified “basic stability.” In the second quarter net offshore investment in domestic securities rose to a historic high of over $60 billion, with Wang highlighting this as significant of the strong appeal fo renminbi assets.

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