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China's Q3 Current Account Surplus Falls

--SAFE Says FX Reserves Increase $59.8 Bln in Jan-Sept vs PBOC's $97.99 Bln Rise
--China Current Account Surplus Equal To 1.2% of GDP
     BEIJING (MNI) - China's current account surplus fell to $37.1 billion
(CNY247.2 billion) at the end of the third quarter, the State Administration of
Foreign Exchange (SAFE) announced Monday, down 27.1% from $50.9 billion at the
end of the second quarter.
     SAFE said the capital and financial accounts deficit, which includes net
error and omission numbers, was also $37.1 billion, compared with a $400 million
deficit during the April-July period. 
     The surplus for the consumer goods trade was $121 billion in the third
quarter, compared with $132.1 billion in the second, while the deficit in the
services trade was $68.1 billion, compared with a $74.4 billion deficit in the
second quarter. 
     The figures are preliminary, and SAFE is expected to release revised and
more extensive data later.
     For the whole first three quarters this year, the current account surplus
was $106.3 billion (CNY722.6 trillion) while the capital and financial account
surplus was $1.8 billion (CNY20.4 billion), SAFE said. 
     SAFE attributed the current account surplus in the first three quarters to
robust consumer goods imports and exports. "Goods exports and imports increased
10% and 15% in the first three quarters, indicating the improvement in domestic
and overseas demand," SAFE said. 
     SAFE said in the separate statement that the current account surplus from
January to September was equivalent to 1.2% of GDP.
     SAFE also said the country's foreign-exchange reserves rose by $59.8
billion during the first three quarters of the year. The People's Bank of China
had previously reported an increase in forex reserves of $97.99 billion during
the same period, but the SAFE figure excludes valuation and exchange rate
changes and is a better reflection of real money flows.
     SAFE said the non-reserve financial account turned to a $60.8 billion
surplus in the first three quarters, compared with a deficit of $389.1 billion
in the same period last year. 
     Capital inflow via direct investment totaled a net $21.3 billion in the
first three quarters, compared with a $37.8 billion net outflow in the same
period last year. 
     "The net outflow of outbound direct investment was $64.8 billion, and the
net inflow of foreign direct investment was $86.1 billion," SAFE said, adding
that both outflows and inflows had maintained growth. 
     SAFE noted that the country's international payment situation has improved
at a steady and strong pace so far this year, and that cross-border capital
flows have maintained solid momentum. It predicted that the base of the
international payment balance would continue to be strengthened in the future.
--MNI Beijing Bureau; +86 (10) 8532 5998; email:
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
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