The State Administration of Foreign Exchange (SAFE) has recently released the preliminary data in the balance of payments for the first quarter of 2020. Wang Chunying, Press Spokesperson and Chief Economist of the SAFE, answered media questions on relevant issues.
Q: Could you brief us on the features of China’s balance of payments for the first quarter of 2020?
A: Overall, despite the impacts from the novel coronavirus epidemic, China’s balance of payments remained in a basic equilibrium in the first quarter of 2020, with the current account registering a slight deficit and direct investment still recording a net inflow.
First, trade in goods remained in surplus. In the first quarter, due to the Chinese New Year holiday and novel coronavirus epidemic, trade in goods in the balance of payments registered a surplus of US$ 26.4 billion. To be specific, exports of goods reached US$ 468.5 billion, down by 11% year on year; imports of goods amounted to US$ 442 billion, down by 2% year on year.
Second, trade in services recorded a declining deficit. In the first quarter, trade in services registered a deficit of US$ 47 billion, down by 26% year on year. The deficit was mainly attributed to travel and transport. Travel services recorded a deficit of US$ 41.6 billion, down by 28% year on year, chiefly due to decreased outbound travels as the epidemic raged. Transport registered a deficit of US$ 11.7 billion, down by 6% year on year.
Third, direct investment continued to register a net inflow. In the first quarter, direct investment recorded a net inflow of US$ 14.9 billion, primarily driven by a net inflow of US$ 33.6 billion in Foreign Direct Investment (FDI), which showed foreign investors’ desire to invest and start businesses in China in the long term. China’s Outbound Direct Investment (ODI) registered a net outflow of US$ 18.7 billion, denoting stable and orderly ODI by businesses.
China’s epidemic prevention and control is yielding positive changes, and the resumption of work is nearing or has reached a normal level for the moment. China’s economy is showing its strong resilience, its economic structure is being optimized and the reform and opening up is being deepened, indicating China’s balance of payments still has a solid foundation to remain in equilibrium in the future.