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: marissa.wang@marketnews.com

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

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