The State Administration of Foreign Exchange (SAFE) has recently released the official data in the Balance of Payments for the third quarter and the first three quarters of 2019 and the International Investment Position as at the end of September. Wang Chunying, press spokesperson and chief economist of the SAFE, answered media questions on relevant issues.

Q: Could you brief us on the characteristics of China's balance of payments for the first three quarters of 2019?

A: In the Balance of Payments, China recorded a surplus under the current account, and net cross-border capital inflows in the first three quarters of 2019, suggesting the balance of payments was in a basic equilibrium.

First, the current account was in surplus. In the first three quarters, the current account surplus hit USD 137.4 billion, accounting for 1.3% of GDP for the same period, which fell within a reasonable surplus range. Specifically, a surplus of USD 339.9 billion was registered under trade in goods, up by 33% year on year, and a deficit of USD 201.8 billion was recorded under trade in services, down by 12%. Under trade in services, the deficits of travel, transport and charges for the use of intellectual property went down by 8%, 14% and 10% respectively.

Second, the financial account excluding reserve assets was in surplus. In the first three quarters, China posted a surplus of USD 20.5 billion under the financial account excluding reserve assets. Net inflow of USD 30.1 billion was registered under direct investment, including ODI of USD 69.5 billion and FDI of USD 99.5 billion. Net inflow of USD 43 billion was recorded under portfolio investment, including outward portfolio investment of USD 63.2 billion and foreign portfolio investment of USD 106.2 billion.

Overall, in the complex and changing external environment, China's economic fundamentals have been stable and sound, and will remain so over the long term, major economic indicators were within an appropriate range and high-level opening up was advanced. It is expected that China's balance of payments will stay stable across the board and remain in a basic equilibrium throughout the year.

Q: What would you say about China's international investment position as at the end of 2019?

A: The International Investment Position shows that, by the end of September 2019, China's international investment position remained robust, with increasing net external assets and high reserve assets that continued to rank it No. 1 worldwide.

First, the total external financial assets rose slightly. As at the end of September, China's external assets reached USD 7.4681 trillion, up by 0.3% quarter on quarter. Specifically, ODI amounted to USD 1.9695 trillion, up by 0.9%; external portfolio investment assets hit USD 584.9 billion, up by 4.4%; other external investment assets reached USD 1.7019 trillion, up by 0.3%; and reserve assets stayed at USD 3.2045 trillion, ranking China No. 1 across the world.

Second, the external liabilities contracted. By the end of September, China's external liabilities reached USD 5.3119 trillion, down by 1.9% quarter on quarter, mainly driven by foreign exchange rate changes and revaluation. Specifically, foreign direct investment liabilities hit USD 2.7773 trillion, down by 2.0%; external portfolio investment liabilities amounted to USD 1.2208 trillion, down by 3.4%; and other external investment liabilities reached USD 1.3025 trillion, down by 0.7%.