China's 1st capital exit in 14 years
By Feng Jianmin |
February 2, 2013, Saturday
|
Print Edition
Print Edition
SALES of domestic assets caused capital to exit China in 2012, for the first time in 14 years, the foreign exchange watchdog said yesterday, adding that foreign exchange reserves rose slower amid a global economic slowdown.
But China's monetary policies will remain and the government will enhance efforts to counter risks from incoming speculative money, or hot money, this year, the State Administration of Foreign Exchange said in a separate statement.
Last year, China had a deficit of US$117.3 billion in its capital and financial account, which studies changes in asset ownership and contributes to the change in foreign exchange reserves.
It was the first deficit since the Asian financial crisis in 1998 and the second time after China started to release the data in 1994, the SAFE said.
"The deficit reflected the pressure of capital outflows as the global economy slowed, global financial markets became more volatile and domestic economic growth moderated," the SAFE said.
Last year, China's current account surplus, another major source of foreign exchange reserves and the broadest measure of cross-border trade balance, rose 6 percent to US$213.8 billion. That compared with a 15 percent decline in 2011.
China's foreign exchange reserves added US$98.7 billion to US$3.31 trillion in 2012 after adjusting for prices and exchange rates, according to the SAFE. The newly-added reserves were about a quarter of that in 2011 and the least in six years.
"The slower growth of the forex reserves won't affect the effectiveness of the central bank policy," the SAFE said. "The People's Bank of China is able to use a mix of monetary policies, based on changes in the economic scenario, to maintain a reasonable level of liquidity to fund economic growth."
But China's monetary policies will remain and the government will enhance efforts to counter risks from incoming speculative money, or hot money, this year, the State Administration of Foreign Exchange said in a separate statement.
Last year, China had a deficit of US$117.3 billion in its capital and financial account, which studies changes in asset ownership and contributes to the change in foreign exchange reserves.
It was the first deficit since the Asian financial crisis in 1998 and the second time after China started to release the data in 1994, the SAFE said.
"The deficit reflected the pressure of capital outflows as the global economy slowed, global financial markets became more volatile and domestic economic growth moderated," the SAFE said.
Last year, China's current account surplus, another major source of foreign exchange reserves and the broadest measure of cross-border trade balance, rose 6 percent to US$213.8 billion. That compared with a 15 percent decline in 2011.
China's foreign exchange reserves added US$98.7 billion to US$3.31 trillion in 2012 after adjusting for prices and exchange rates, according to the SAFE. The newly-added reserves were about a quarter of that in 2011 and the least in six years.
"The slower growth of the forex reserves won't affect the effectiveness of the central bank policy," the SAFE said. "The People's Bank of China is able to use a mix of monetary policies, based on changes in the economic scenario, to maintain a reasonable level of liquidity to fund economic growth."
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