The State Administration of Foreign Exchange (SAFE) recently released the preliminary data of the balance of payments (BOP) for the second quarter and the first half of 2022. Wang Chunying, SAFE Deputy Administrator and Press Spokesperson, answered media questions on relevant issues.

Q: What are the characteristics of China’s BOP in the first half of 2022?

A: The preliminary data shows that, in the first half of 2022, China maintained a basic equilibrium in its BOP. Specifically, the current account reached surplus of USD 169.1 billion, accounting for 1.9% of GDP during the period and remaining within a reasonable range. Direct investment witnessed a net inflow of USD 74.9 billion, which remained at a relatively high level.

First, the trade surplus in goods increased year on year. In the first half of 2022, China’s import and export of goods trade showed strong resilience. Trade in goods on BOP basis posted a surplus of USD 320.7 billion, an increase of 36%, the highest value for the same period over the years. Specifically, the export of goods reached USD 1.6437 trillion, a year-on-year increase of 13%; the import of goods registered USD 1.3230 trillion, a year-on-year increase of 8%.

Second, the trade deficit in services narrowed year on year. In the first half of 2022, the trade deficit in services recorded USD 37.8 billion, a year-on-year decrease of 30%. To be specific, the travel deficit was USD 51.9 billion, up by 31% year on year, mainly due to the rebound in expenditures such as overseas study. The deficit in intellectual property royalties was USD 15.9 billion, basically unchanged from the same period of 2021. Both revenue and expenditure on intellectual property royalties increased, reflecting the mutual benefit from China’s efforts to expand international cooperation in the field of intellectual property. The deficit in transportation registered USD 2.2 billion, a year-on-year decrease of 89%, as revenue from transportation services grew faster than expenditure. The surplus in telecommunications, computer and information services was USD 9.1 billion, up by 1.2 times year on year, reflecting that the digital transformation of the service sector has injected new momentum into the development of China’s service trade.

Third, China saw a relatively high level of net inflow in the direct investment. In the first half of 2022, the net inflow of foreign direct investments was USD 74.9 billion. The net inflow of direct investment to China reached USD 149.6 billion, showing that the Chinese market remained attractive to foreign capital. China’s outward direct investment (ODI) saw a net outflow of USD 74.7 billion, which was generally in a stable and orderly manner.

In general, China responded to efficiently coordinate epidemic prevention and control as well as economic and social development, and sustained its strong resilience, great potential and full of vitality in economy with its fundamentals of sound long-term growth unchanged, which will be helpful for China to remain an equilibrium in its BOP.