China set to see rise in capital inflow
By Leo Zhang |
April 20, 2010, Tuesday
|
Print Edition
Print Edition
CHINA will see capital flow increase this year on growing expectations of the yuan's appreciation and optimism in the country's economy, the state foreign-exchange regulator said yesterday.
The country's trade surplus will further narrow this year as China restructures its economy and encourages more domestic companies to invest overseas, the State Administration of Foreign Exchange said in its balance-of-payments report.
China recorded US$297.1 billion in its current-account surplus last year, compared with US$436.1 billion in 2008, the report said. Its capital and financial account surplus totaled US$144.8 billion in 2009, up from US$19 billion the year before.
"The relatively high domestic interest rates and rising expectations of the yuan's rise will boost the size of capital seeking cross-border carry trade," SAFE said.
China posted its first trade deficit in six years in March, thanks to a surge in imports of commodities and consumer goods. Exports in March increased 24.3 percent from a year earlier to US$112.1 billion while imports surged 66 percent to US$119.3 billion.
SAFE said it expects a smaller current-account surplus this year. China's international balance of payments will improve as it continues to shift to a consumption-driven economic growth model, the report said.
SAFE also said the country needs to manage inflation expectations urgently and stabilize consumer prices as it seeks economic restructuring amid uncertainties in the global financial environment.
China's economy expanded by 11.7 percent in the first quarter of this year, the fastest pace in two years.
The country's trade surplus will further narrow this year as China restructures its economy and encourages more domestic companies to invest overseas, the State Administration of Foreign Exchange said in its balance-of-payments report.
China recorded US$297.1 billion in its current-account surplus last year, compared with US$436.1 billion in 2008, the report said. Its capital and financial account surplus totaled US$144.8 billion in 2009, up from US$19 billion the year before.
"The relatively high domestic interest rates and rising expectations of the yuan's rise will boost the size of capital seeking cross-border carry trade," SAFE said.
China posted its first trade deficit in six years in March, thanks to a surge in imports of commodities and consumer goods. Exports in March increased 24.3 percent from a year earlier to US$112.1 billion while imports surged 66 percent to US$119.3 billion.
SAFE said it expects a smaller current-account surplus this year. China's international balance of payments will improve as it continues to shift to a consumption-driven economic growth model, the report said.
SAFE also said the country needs to manage inflation expectations urgently and stabilize consumer prices as it seeks economic restructuring amid uncertainties in the global financial environment.
China's economy expanded by 11.7 percent in the first quarter of this year, the fastest pace in two years.
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