The State Administration of Foreign Exchange (SAFE) has recently disseminated the preliminary data on the balance of payments for the third quarter and the first three quarters of 2018. The SAFE spokesperson Wang Chunying answered media questions on relevant issues.

Q: Could you brief us on the new characteristics of the balance of payments for the third quarter of 2018, relative to the second quarter?

A: The preliminary data on the balance of payments for the third quarter show surplus under the current account and deficit under the financial account (excluding reserve assets, but including net error and omission for the same quarter, the same as below). The main characteristics are as follows:

Firstly, the surplus under the current account continued to pick up. In the third quarter, the surplus under the current account stood at USD 16 billion, up by 200% from the second quarter. Specifically, the surplus of trade in goods and services was USD 18.6 billion, among which, the surplus of trade in goods in the BOP was USD 100.8 billion and the deficit of trade in services USD 82.2 billion. Primary income was changed from deficit of USD 20.7 billion in the second quarter to surplus of USD 1.1 billion, which is mainly attributed to the rapid increase in income of various outbound investments in the third quarter. The secondary income posts a deficit of USD 3.7 billion, representing a slight decline.

Secondly, the financial account (excluding reserve assets) showed a deficit. In the third quarter of 2018, the financial account (excluding reserve assets) registered a deficit of USD 18.8 billion. Specifically, direct investment recorded a net inflow of USD 1.3 billion, among which, ODI registered a net outflow of USD 23 billion, and FDI recorded a net inflow of USD 24.3 billion. Besides, based on incomplete statistics,portfolio investments in the third quarter showed a net inflow of nearly USD 50 billion, while other investment such as deposit and loan registered a net outflow of roughly USD 10 billion.

Thirdly, reserve assets fell slightly. In the third quarter of 2018, China's reserve assets decreased by USD 3 billion due to the BOP transactions (excluding the impact of non-transaction factors such as exchange rate and price), among which, foreign exchange reserves decreased by USD 3.1 billion.

Overall, China's balance of payments continued to maintain the equilibrium in the third quarter of 2018. Since China's economic operation has maintained stability while ensuring progress, the transformation and upgrade has been further promoted and quality and efficiency has been steadily improved, China's current account balance will remain within a reasonable range in the future, and the cross-border capital will maintain bi-directional flow and overall equilibrium.