Every reporter Xiao Shiqing
On June 24, the State Administration of Foreign Exchange announced my country’s balance of payments for the first quarter of 2022 and full-scale external debt data at the end of March.
Data show that in the first quarter of 2022, my country’s current account will have a surplus of 564.4 billion yuan, and the capital and financial account will have a deficit of 566.2 billion yuan. As of the end of March 2022, my country’s full-scale (including domestic and foreign currency) foreign debt balance was 17,204.9 billion yuan (equivalent to 2,710.2 billion U.S. dollars, excluding external liabilities from Hong Kong SAR, Macao SAR, and Taiwan, the same below).
Wang Chunying, deputy director of the State Administration of Foreign Exchange and spokesperson, said that in the first quarter of 2022, my country’s balance of payments will remain basically balanced. Among them, the current account surplus was 88.9 billion US dollars, the highest value in the same period in history, and the ratio to the gross domestic product (GDP) in the current quarter was 2.1%, still in a reasonable and balanced range. Evaluating my country’s current foreign debt situation, Wang Chunying believes: “In the first quarter of 2022, the scale of my country’s foreign debt declined slightly, mainly due to the complex and volatile external environment, and the purchase of domestic RMB bonds and non-resident deposits by foreign investors decreased. my country’s foreign debt mainly The indicators continue to be within the internationally recognized safety line, and external debt risks are generally controllable.”
The balance of payments remains basically balanced
In dollar terms, in the first quarter of 2022, my country’s current account has a surplus of US$88.9 billion, including a surplus of US$145 billion under trade in goods, a deficit of US$16.7 billion under trade in services, a deficit of US$44.6 billion in primary income and a surplus of US$5.2 billion in secondary income. The capital and financial account recorded a deficit of US$89.2 billion, of which the capital account recorded a deficit of US$200 million, a surplus of US$59.9 billion in direct investment, a deficit of US$79.8 billion in securities investment, a deficit of US$4.6 billion in financial derivatives, a deficit of US$25.2 billion in other investments, and an increase in reserve assets. $39.3 billion.
In this regard, Wang Chunying said that in the first quarter of 2022, my country’s international payments will remain basically balanced. Among them, the current account surplus was 88.9 billion US dollars, the highest value in the same period in history, and the ratio to the gross domestic product (GDP) in the current quarter was 2.1%, still in a reasonable and balanced range. In terms of specific manifestations, firstly, the import and export of goods trade maintained steady growth, secondly, the deficit in service trade continued to narrow, and thirdly, cross-border two-way investment and financing were relatively active.
“Overall, my country has effectively coordinated epidemic prevention and control and economic and social development, and the long-term economic fundamentals have not changed, which is conducive to maintaining a basic balance of international payments.” Wang Chunying said.
Wen Bin, chief economist of China Minsheng Bank, said that in the first quarter, my country’s international balance of payments was still in a reasonable balance, the current account maintained a strong surplus, and the fundamentals of trade in goods and services were generally sound. Although the non-reserve financial account deficit expanded slightly, it was mainly due to changes in bond investment flows under the Sino-US interest rate gap, and there was no negative factor due to major economic fundamentals. When the two items are balanced, foreign exchange reserves have also grown reasonably.
Wen Bin further pointed out that the good performance of the balance of payments in the first quarter is also the fundamental support for the relatively strong performance of the RMB exchange rate in the same period. However, the RMB exchange rate fell sharply in the second quarter, and it is expected that the pressure on the deficit in the balance of payments should increase in the second quarter. Judging from high-frequency data, current account and direct investment still have sound fundamentals. Looking into the future, the balance of payments situation in the second quarter should not deteriorate significantly, and the RMB exchange rate will still mainly fluctuate in both directions.
External debt is expected to remain stable
As of the end of March 2022, my country’s full-scale (including domestic and foreign currency) foreign debt balance was 17,204.9 billion yuan. In terms of maturity structure, the balance of medium and long-term external debt was RMB 8,134 billion (equivalent to USD 1,281.3 billion), accounting for 47%; the balance of short-term external debt was RMB 9,070.9 billion (equivalent to USD 1,428.9 billion), accounting for 53%. Trade-related credit accounted for 38 percent of the short-term external debt balance.
Wang Chunying said: “In the first quarter of 2022, the scale of my country’s external debt was relatively stable, with a slight decline. As of the end of March 2022, my country’s full-scale (including domestic and foreign currency) foreign debt balance was 2,710.2 billion US dollars, a decrease of 36.4 billion US dollars, or 1%, compared with the end of 2021. .”
In terms of currency structure, the balance of foreign debt in local currency was RMB 7,678.8 billion (equivalent to USD 1,209.6 billion), accounting for 45%; the balance of foreign debt in foreign currency (including SDR allocation) was RMB 9,526.1 billion (equivalent to USD 1,500.6 billion), accounting for 55% . Of the outstanding foreign debts registered in foreign currencies, 86% of the foreign debts were in US dollars, 7% in euros, 3% in Hong Kong dollars, 1% in Japanese yen, and 3% in SDR and other foreign currencies.
Wang Chunying commented: “The structure of foreign debt remains stable. In terms of currency structure of foreign debt, as of the end of March 2022, foreign debt in local currency accounted for 45%; in terms of maturity structure of external debt, medium and long-term foreign debt accounted for 47%. Foreign debt in local currency and medium and long-term foreign debt The proportions are all the same as at the end of 2021.”
Talking regarding how to view the current foreign debt situation, Wang Chunying believes: “At present, my country’s foreign debt risks are generally controllable. In the first quarter of 2022, the scale of my country’s foreign debt decreased slightly, mainly due to the complex and volatile external environment. Foreign investors purchased domestic RMB bonds and Non-resident deposits have decreased. The main indicators of my country’s external debt continue to be within the internationally recognized safety line, and external debt risks are generally controllable.”
Looking forward to the future, Wang Chunying said that although unstable and uncertain factors in the external environment still exist, the fundamentals of my country’s economy with strong resilience, sufficient potential and long-term improvement have not changed. International long-term capital continued to flow in, and the scale of foreign debt is expected to remain stable in the future.
(Editor: Wen Jing)
