The State Administration of Foreign Exchange (SAFE) has recently released the preliminary data on the balance of payments for the fourth quarter and the whole year of 2021. Wang Chunying, SAFE Deputy Administrator and Press Spokesperson, answered media questions on relevant issues.

Q: What are the characteristics of China’s balance of payments of 2021?

A: The preliminary data shows that, China maintained a basic balance in its international payments in 2021, with a current account surplus of US$315.7 billion, accounting for 1.8% of the GDP for the year. China’s balance of payments continued to stay within a reasonable range of equilibrium. Its net inflows of direct investment grew significantly, and two-way flows of cross-border capital flourished.  

First, trade in goods continued to post a surplus. In 2021, as the global economic recovery remained on track, both exports and imports of China maintained steady growth. The exports and imports of goods in terms of international payments registered US$3.2 trillion and US$2.7 trillion respectively, posting a surplus of US$554.5 billion, up by 8% from the year 2020.

Second, trade deficit in services narrowed. In 2021, the trade deficit in services recorded US$97.7 billion, decreasing by 33% year on year. Travel, the use of intellectual property and transport were the main deficit items. Of this, the travel deficit was US$99.3 billion, down by 15%, mainly due to the COVID-19 pandemic’s continued impact on cross-border tourism and studying abroad. Both revenue and expenditure on the use of intellectual property grew rapidly, with a deficit of US$35.2 billion, an increase of 20%, reflecting China’s deepening international cooperation in the field of intellectual property. The deficit in transport declined 60% to US$15.1 billion, mainly because transport revenue grew faster than expenditure on the whole.  

Third, the surplus of direct investment increased significantly. In 2021, the net inflow of direct investment had been doubled to US$204.8 billion, comparing with that of 2020, among which the net inflow of inward direct investment was US$332.3 billion, up by 56%, reflecting that China’s sound economic development prospects had attraction to the long-term foreign capital. China’s outward direct investment saw a net outflow of US$127.5 billion, up by 16%, indicating that overseas asset allocation by domestic entities was stable and orderly.  

Looking ahead into the future, despite external instabilities and uncertainties, China’s economic resilience remained strong with great potential and sound long-term fundamentals, which will be helpful for China’s international payments to remain generally balanced.