Capital account posts deficit in first half
Source: Agencies |
August 1, 2012, Wednesday
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Print Edition
Print Edition
CHINA'S capital and financial account swung into a deficit of US$71.4 billion in the second quarter from a surplus of US$56.1 billion in the first quarter as domestic firms and residents increased their holdings of foreign currencies amid the global turbulence, the nation's foreign exchange regulator said yesterday.
China has suffered sporadic capital outflows since late last year as choppy global markets have spooked investors and led them to pull funds from the country.
"The current situation is that domestic institutions and individuals increased their holdings of foreign exchange assets instead of the central bank. There is no sign yet of capital flight," the State Administration of Foreign Exchange said.
"As balance of payment and yuan currency approach the equilibrium and reasonable level, it is inevitable to see cross-border capital inflow and outflow, as well as two-way yuan currency fluctuations," it said.
The capital account deficit in the first half was US$20.3 billion. China's current account surplus widened to US$59.7 billion in the second quarter from US$23.5 billion three months earlier, according to the administration.
The current account surplus in the first half of 2012 was US$83.2 billion, down 5 percent from a year earlier, the data showed. The surplus was equivalent to 2.3 percent of GDP, down from 2.7 percent in 2011, offering fresh evidence the Chinese economy is relying less on external demand.
China's current account surplus was about 6 percent of GDP in 2009 and 10.1 percent in 2007. The steady decline has been helped by the nation's solid economic growth in recent years.
China has suffered sporadic capital outflows since late last year as choppy global markets have spooked investors and led them to pull funds from the country.
"The current situation is that domestic institutions and individuals increased their holdings of foreign exchange assets instead of the central bank. There is no sign yet of capital flight," the State Administration of Foreign Exchange said.
"As balance of payment and yuan currency approach the equilibrium and reasonable level, it is inevitable to see cross-border capital inflow and outflow, as well as two-way yuan currency fluctuations," it said.
The capital account deficit in the first half was US$20.3 billion. China's current account surplus widened to US$59.7 billion in the second quarter from US$23.5 billion three months earlier, according to the administration.
The current account surplus in the first half of 2012 was US$83.2 billion, down 5 percent from a year earlier, the data showed. The surplus was equivalent to 2.3 percent of GDP, down from 2.7 percent in 2011, offering fresh evidence the Chinese economy is relying less on external demand.
China's current account surplus was about 6 percent of GDP in 2009 and 10.1 percent in 2007. The steady decline has been helped by the nation's solid economic growth in recent years.
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