The Chinese foreign exchange regulator announced on Friday that the nation’s current account will most likely remain in surplus in 2014; while it expects more capital outflows and inflows into the economy as Beijing moves in to implement its exchange rate reforms.
China’s current account, its widest gauge of trade with its partners such as U.S., hit a surplus totalling $182.8 billion in 2013, a decline of 15 percent from a year ago, according to the State Administration of Foreign Exchange in a statement posted on its website.
The surplus equals 2 percent of the country’s gross domestic product, a decline of 0.6 percent from a year ago, reported SAFE, according to Wall Street Journal.
The surplus in 2014 will likely be a major contributor, while surplus as a proportion of the GDP will remain at low levels, said SAFE. China’s trade surplus measured $259.8 billion in 2013.
SAFE announced that it will shift its focus towards minimizing risks from cross-border capital movements this year, and two-way capital flows will possibly rise as the yuan rate slowly edges towards the government considers an equilibrium level.
The financial and capital account, which incorporates investment, reached a surplus of $326.2 billion in 2013.
A separate statement issued on Friday showed that the regulator had revised slightly upwards the forecasts of the China’s current account surplus in the fourth quarter of 2013 to 44.0 billion from a surplus of $40.4 billion.
In the fourth quarter the revised forecast of financial account and capital totalled a surplus of $127.0 billion, up from a prediction of $81.0 billion.
To contact the reporter of this story; Yashu Gola at email@example.com