The State Administration of Foreign Exchange (SAFE) recently released the Balance of Payments (BOP) for the first quarter of 2023 as well as the International Investment Position (IIP) at the end of March 2023. The SAFE deputy administrator and press spokesperson, Wang Chunying, answered media questions on relevant issues.

Q: Could you brief us on China's BOP for the first quarter of 2023?

A: In the first quarter of 2023, China's balance of payments maintained a general equilibrium. The current account surplus reached the highest record for the same period in history and stood at USD 81.5 billion, with its ratio to Gross Domestic Product (GDP) reaching 2.0%, which remains within a reasonable and balanced range.

Firstly, the trade surplus in goods and the scale of exports and imports all reached the second-highest levels in history for the same period. In the first quarter of 2023, China's national economy continued to recover, with a good start in economic performance. Trade in goods on a BOP basis posted a surplus of USD 129.9 billion, with exports of USD 739.2 billion and imports of USD 609.2 billion. All three figures are the second-highest in history during the same period of time.

Secondly, the trade deficit in services, such as traveling and transportation, expanded. In the first quarter, the trade deficit in services registered USD 47.2 billion. More specifically, the travel deficit was USD 43.4 billion, an increase of 58% year-on-year, mainly due to residents' gradual recovery of outbound travel, which drove up travel spending. The transportation deficit was USD 19.1 billion, compared to a surplus of USD 3.3 billion in the same period last year, mainly due to the orderly recovery of global transport capacity and the gradual return of China's transportation services to pre-pandemic levels.

Thirdly, the two-way cross-border investment remained stable. In the first quarter, China's outward investment was stable and orderly. The net increase in the financial account's assets was USD 99.8 billion, of which the reserve assets increased by USD 25.5 billion due to net transactions, and non-reserve financial account assets increased by USD 74.4 billion. The net increase in financial account liabilities was USD 23.5 billion, and foreign investment in China exhibited a net inflow.

Overall, China adheres to the general principle of pursuing progress while ensuring stability in its work, and the economy's overall performance has rebounded and improved, which is conducive to maintaining a basic balance in international payments.

Q: What can you say about China's IIP at the end of March 2023?

A: By the end of March 2023, China's IIP remains robust, increasing both foreign financial assets and liabilities. China's reserve assets continue to rank first in the world in terms of size.

Firstly, China's net external assets have increased in size. As of the end of March 2023, China's foreign assets amounted to USD 9445.7 billion, an increase of 2.0% from the end of 2022. Foreign liabilities amounted to USD 6880.4 billion, an increase of 2.3%. China's net external assets (assets minus liabilities) amounted to USD 2565.3 billion, an increase of 1.3% while maintaining continuous growth since the end of March 2022.

Secondly, the structure of China's external financial assets and external liabilities remained sound. In the catalogue of China's external financial assets, China's reserve assets exceeded USD 3.4 trillion, ranking first globally. Over half of the foreign liabilities are direct investments in China, totaling USD 3.5 trillion, an increase of 1.2% from the end of 2022.