The State Administration of Foreign Exchange (SAFE) has recently released the preliminary data on the balance of payments (BOP) for the first quarter of 2023. The SAFE deputy administrator and press spokesperson Wang Chunying answered media questions on the relevant issues.

Q: What are the characteristics of China’s BOP for the first quarter of 2023?

A: The preliminary data shows that, in the first quarter of 2023, China maintained a basic equilibrium in its BOP. The current account reached a surplus of USD 82 billion, with its ratio to Gross Domestic Product (GDP) reaching 2.0% during the period, continuing to remain in a reasonable and balanced range. Meanwhile, China saw the cross-border capital flows in both directions remain in a reasonable and orderly manner.

First, the trade surplus in goods was at a relatively high level compared to the same period in history. Trade in goods on BOP basis posted a surplus of USD 129.9 billion, the second-highest first-quarter reading on record. The export of goods reached USD 739.2 billion, while the import of goods registered USD 609.2 billion. China’s manufacturing industry has been rapidly transforming and upgrading, while the industrial and supply chains have remained stable. As a result, new trade growth points have emerged continuously, leading to a sustained high level of trade surplus in goods.

Second, trade in services registered a deficit. In the first quarter, the trade deficit in services stood at USD 47 billion. Specifically, the deficit in travel reached USD 43.4 billion, representing a year-on-year increase of 58%, primarily due to the rise in outbound travel by individual residents. Meanwhile, the deficit in transportation was USD 19 billion, compared to a surplus of USD 3.3 billion in the same period last year. This was mainly due to the orderly recovery of global transportation capacity and the gradual return of China’s transportation service revenue and expenditure to pre-pandemic levels.

Third, the two-way direct investment stayed in an orderly manner. In the first quarter, China’s outbound direct investment (ODI) saw a net outflow of USD 50.6 billion, representing a year-on-year increase of 23%. Of this amount, the net outflow of foreign equity investment was USD 31.3 billion. Meanwhile, the net inflow of foreign direct investment (FDI) in China reached USD 20.5 billion, with a net inflow of equity investment amounting to USD 28.3 billion.

In sum, despite the complex and ever-changing external environment, China remains committed to pursuing progress while prioritizing stability, and promoting high-quality development. Therefore, the Chinese economy has maintained its growth momentum, which helps underpin the country’s balance of payments.