China posts dip in current account glut
By Zhang Fengming |
May 25, 2011, Wednesday
|
Print Edition
Print Edition
CHINA'S current account surplus dropped 18 percent year on year in the first quarter of this year while its capital account surplus soared in the same period, the currency regulator said yesterday.
The current account surplus, the broadest measure of trade, fell to US$29.8 billion in the first three months, the State Administration of Foreign Exchange said on its website. It was also a significant drop from the US$102 billion in the fourth quarter of 2010.
The capital account surplus, or for investment, reached US$111.4 billion between January and March, up an annual 82 percent.
China posted US$42.6 billion in new inflow of direct investment in the first quarter, a slight gain from US$39.1 billion in the final three months of 2010.
The country's foreign exchange reserves grew by US$138 billion to boost the total to US$3 trillion by the end of March - the world's biggest.
Capital is increasingly moving into the country as foreign investors seek to ride on the prospects for a yuan appreciation.
The currency has already gained more than 25 percent since China dropped the yuan's peg to the dollar in July 2005.
The rising forex reserves have boosted liquidity as the People's Bank of China has to print money in exchange for the foreign currency, economists said.
China has set an official inflation goal of 4 percent this year.
The current account surplus, the broadest measure of trade, fell to US$29.8 billion in the first three months, the State Administration of Foreign Exchange said on its website. It was also a significant drop from the US$102 billion in the fourth quarter of 2010.
The capital account surplus, or for investment, reached US$111.4 billion between January and March, up an annual 82 percent.
China posted US$42.6 billion in new inflow of direct investment in the first quarter, a slight gain from US$39.1 billion in the final three months of 2010.
The country's foreign exchange reserves grew by US$138 billion to boost the total to US$3 trillion by the end of March - the world's biggest.
Capital is increasingly moving into the country as foreign investors seek to ride on the prospects for a yuan appreciation.
The currency has already gained more than 25 percent since China dropped the yuan's peg to the dollar in July 2005.
The rising forex reserves have boosted liquidity as the People's Bank of China has to print money in exchange for the foreign currency, economists said.
China has set an official inflation goal of 4 percent this year.
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