China First-Half Current Acct Surplus Equal to 1.3% of GDP

     BEIJING (MNI) - Growth in China's current account surplus dropped modestly

year-over-year in the first half of the year as the goods trade surplus dipped

and the service trade deficit expanded, according to data released by the State

Administration of Foreign Exchange.

     In the first six months, the current account surplus rose $71.2 billion,

compared with an increase of $98.7 billion in the first half of last year.

     "China's international payments in the first half of this year were stable

and healthy," SAFE said in a Q&A statement posted on its website late Monday.

"Cross-border capital flow is trending in a good direction while maintaining a

stable status, and in general the balanced foundation of future international

payments is more solid."

     The current account surplus in the first half was equal to 1.3% of China's

gross domestic product, SAFE said.

     The goods trade surplus was $215.4 billion in the first half, a decline of

7% compared with the same period last year, SAFE said. SAFE stressed that both

exports and imports increased, by 12% and 18%, respectively, reflecting "the

continued improvement of domestic and international demand."

     The service trade deficit reached $135.1 billion, up 24% from $116.9

billion in the same period of last year. The tourism deficit increased 19%.

     In the second quarter, China's current account surplus surged to $52.9

billion from $18.4 billion in the first quarter. The goods trade surplus reached

$133.2 billion in the quarter, compared with $82.3 billion in the first quarter.

The service trade deficit was $74.4 billion, up from $60.7 billion in the first

quarter.

     In the first half of the year, the capital and financial account had a

deficit of $13.6 billion, down significantly y/y compared with the $59.5 billion

in the first six months last year. The capital account deficit was $100 million.

     The non-reserves capital account surplus was $15.6 billion in the first

quarter -- compared with the $217.2 billion deficit in the same period last

year, SAFE said. Within the non-reserves capital account, direct investment

recorded an inflow of $14.2 billion, compared with an outflow of $49.4 billion,

of which outbound direct investment was $40.4 billion.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

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