The history and current situation of China’s international balance of payments

The balance of payments is the monetary record of all economic transactions resulting from all political, economic, and cultural exchanges between a country's residents and non-residents within a certain period of time.

A country's international balance of payments is mainly determined by the current account, capital and financial accounts. The profit and loss of the current account depends on the competitiveness of a country's commodities in the international market, and the financial account is mainly determined by the interest rates, risks and investments in the financial market.

Changes in rates of return and other non-economic factors.

Dynamically speaking, international balance of payments activities describe an economic phenomenon, reflecting all of a country's external currency receipt and payment activities within a certain period of time.

In static terms, the balance of payments describes the comparative results of a country's currency balances with other countries. This result is systematically recorded to form the balance of payments statement.

my country's international balance of payments model is very special. Since the 1990s, except for a few years, it has shown a "double surplus" in the current account, capital and financial accounts.

Especially since the 21st century, the scale of double surpluses has shown a trend of rapid expansion.

It is precisely because of the excessive growth of foreign exchange reserves caused by this double surplus in the balance of payments that the main task of my country's monetary policy for a period of time is to sterilize excessive liquidity in the banking system.

In the past two years, my country's international balance of payments imbalance has increasingly attracted the attention of relevant scholars at home and abroad.

1. The current situation of my country’s international balance of payments in recent years. According to data released by the State Administration of Foreign Exchange, due to the substantial increase in the goods trade surplus, the current account achieved a surplus of US$160.818 billion in 2005, a year-on-year increase of 134.23%, accounting for the overall surplus of my country’s international balance of payments. The proportion increased to 72%, mainly due to the sharp increase in the goods trade surplus.

According to the balance of payments statistics, my country's goods trade surplus in 2005 was US$134.2 billion, an increase of 128%.

The capital and financial account surplus was US$62.964 billion, a year-on-year decrease of 43.1%. The main reason was that due to the rapid growth of foreign investment, "securities investment" and "other investment" turned from surplus to deficit, the capital and financial account surplus accounted for China's international income in 2004.

The overall surplus ratio dropped to 28%.

In 2005, the deficits in securities investment and other investments were US$4.9 billion and US$4 billion respectively.

Driven by double surpluses in the current account, capital and financial accounts, foreign exchange reserves increased by US$208.94 billion, an increase of US$2.26 billion over 2004, special drawing rights increased by US$0.05 billion, and the reserve position in the International Monetary Fund decreased by 1.9 billion.

Dollar.

At the end of 2005, my country's foreign exchange reserve balance reached US$818.9 billion.

"Net errors and omissions" appeared on the debit side and amounted to US$16.8 billion, equivalent to 1.21% of the total import and export of goods trade under the balance of payments caliber, which is within the internationally recognized reasonable range of 5%.

In 2005, the total scale of my country's international balance of payments transactions was US$2.42 trillion, an increase of 27% over 2004, and its proportion in GDP further increased to 109%.

The State Administration of Foreign Exchange pointed out in the "Balance of Payments Report" that this shows that my country's economic opening up has been further expanded, its integration with the world economy has become closer, and the impact of foreign economic operations on the domestic economy has increased.

In 2005, the state continued to use monetary, fiscal and other policies to strengthen and improve macroeconomic control, accelerate economic structural adjustment, further transform the growth pattern of foreign trade, and improve the quality of foreign investment utilization.

The reform of the financial system has made progress and the overall stability has been enhanced.

The People's Bank of China and the State Administration of Foreign Exchange have steadily advanced the reform of the RMB exchange rate formation mechanism, actively developed the foreign exchange market, and relaxed exchange rate management.

Since July 21, 2005, my country has implemented a managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies.

Since the reform, the flexibility of the RMB exchange rate has gradually increased, and the number of participants in the foreign exchange market has continued to expand.

In 2006, my country's economy grew steadily and rapidly, opening up to the outside world reached a new level, the reform of the RMB exchange rate formation mechanism was steadily advanced, and the flexibility of the exchange rate increased.

The balance of payments continued the "double surplus" pattern, with the current account achieving a surplus of US$249.866 billion, a year-on-year increase of 55.37%, of which exports were US$1,144.499 billion and imports were US$894.633 billion, a year-on-year increase of 26.66% and 20.45% respectively.

The rapid growth of my country's import and export is due to the rapid development of the domestic economy.

The continuous growth of domestic and international market demand has made my country's foreign export trade situation excellent.

In terms of imports, my country has further strengthened macro-control and import demand has grown steadily, allowing my country's imports to continue to develop rapidly.

Looking at the overall data, transportation is the main factor leading to the deficit in services under the current account.

Among them, revenue was US$21.015 billion, expenditure was US$34.369 billion, and the deficit was US$13.354 billion. Compared with the transportation deficit of US$6.332 billion in 2005, it expanded by US$7.022 billion year-on-year.

From 2003 to 2007, the economy maintained a basic trend of rapid growth, good efficiency, and stable operation, and the balance of payments continued to maintain a "double surplus" pattern.

The problem of surplus imbalance in the international balance of payments is still very prominent. In the past few years, "double surplus" seems to have become the "routine" of my country's international balance of payments.

The current account surplus was US$162.9 billion, a year-on-year increase of 78%, an increase of 42 percentage points over the same period last year.

Adjustments and additional export tariffs on some products were implemented before exports were implemented, further expanding the trade surplus in goods.