Download → China Balance of Payment Report(First half of 2022)

Abstract

During the first half of 2022, China effectively coordinated pandemic control with economic and social development in the face of the complex and severe international environment, and it maintained overall economic and social development stability. The domestic economy stabilized and recovered, powerfully boosting market expectations and confidence. The resilience of the foreign-exchange market was significantly improved, and the RMB exchange rate became more flexible and remained basically steady at an appropriate and balanced level.

During the first half of 2022, the surplus under the current account, direct investments, and other basic items continued to play a leading role in promoting an independent equilibrium in China's balance of payments. The current account recorded a surplus of USD 166.4 billion, a year-on-year increase of 43 percent, and its ratio to GDP was 1.9 percent, continuing within a reasonably balanced range. Specifically, the surplus of trade in goods increased by 36 percent, reflecting China’s important role and comparative advantages in global production and supply. The deficit in trade in services narrowed by 33 percent and continued to be at a low level. Driven by long-term factors, such as economic prospects and market potential, direct investments maintained a stable surplus. The basic balance of payments surplus formed by the current account and direct investments totaled USD 240.4 billion, up 3 percent. In recent years, China's cross-border capital-flow channels have become more diversified. During the first half of 2022, cross-border two-way capital flows of some items increased, while that of others decreased under other investments, such as portfolio investments and deposits and loans, and the effects of self-regulation were enhanced, contributing, together with the basic surplus, to the basic equilibrium in China's balance of payments together. By the end of June 2022, China's external financial assets and liabilities were stable at USD 9 trillion and USD 7 trillion, respectively, and its net external assets reached USD 2.1 trillion, an increase of 5 percent over the end of 2021.

In the second half of 2022, there are still many unstable factors in the external environment, but the fundamentals for China's positive long-term economic growth will not change and the foreign-related economy will remain stable. At the same time, the opening-up of the financial markets will be steadily promoted, cross-border investments and financing channels will be constantly expanded, and the adjustment mechanism for the balance of payments will be continuously improved. The internal foundation for China's balance of payments is still solid, the current account will maintain a reasonable surplus, and stability in cross-border two-way investments is expected to gradually improve. The foreign-exchange administration department will adhere to the general tone of seeking progress while maintaining stability, actively introducing and firmly implementing policies and measures conducive to stabilizing the overall economy and serving the real economy, deepening reform and opening-up in the foreign-exchange field, maintaining stable operations in the foreign-exchange market, promoting a basic equilibrium in the balance of payments, and welcoming the successful convening of the 20th CPC National Congress with practical actions.