China sees net inflows in direct investment, record high current account surplus in Q1-Q3, in fresh sign of sustained optimism
By Global Times Published: Nov 04, 2022 09:49 PM
China saw its current account surplus rise in the first three quarters to the highest on record, while direct investment booked net inflows, according to the State Administration of Foreign Exchange (SAFE) on Friday, in a fresh sign of sustained optimism in the world’s second largest economy despite multifaceted headwinds.
In the first three quarters of the year, the country’s current account surplus hit $310.4 billion, an increase of 56 percent from the year before and the highest on record for the period, read a question-and-answer sheet posted on SAFE’s website on Friday, citing Wang Chunying, deputy head and spokesperson of the administration.
The surplus reading was equivalent to 2.4 percent of GDP, still within a reasonable and balanced range, Wang said. Meanwhile, the country posted net inflows in direct investment and cross-border capital flows were steady and orderly.
Net direct investment inflows totaled $46.9 billion in the first three quarters, official data showed. A breakdown of the data revealed that net direct inflows into the country hit $160.8 billion, an indication that the country’s economic prospects are turning for the better over the long term, and continuing to attract foreign investment into the country.
Simultaneously, net direct outbound outflows came to $113.9 billion, the SAFE number showed.
The economy has strong resilience, ample potential and wide leeway, Wang said, expecting economic recovery to be further consolidated and fundamentally underpin the country’s balance of payments.
The solid numbers came across as cementing market belief that the country remains a much sought-after destination for global capital in the face of the still-raging pandemic, mounting fears of a global recession and escalated geopolitical tensions.
That the country was able to rake in net direct investment inflows amid an overall languishing global landscape was also seen as fear-mongering being turned on its head.
In another sign, optimism also entered the equity market, which has lately been subject to swings amid varied uncertainties.
Net inflows into the Chinese mainland market via the stock linkups between the Hong Kong and mainland bourses in Shanghai and Shenzhen were close to 10 billion yuan ($1.38 billion) on Friday, snapping net outflows back-on-back over the previous two days.
Both mainland and Hong Kong shares posted a rally across the board on Friday, as investors are increasingly betting on a revival of the economy to prop up global growth at large.