China's foreign exchange reserve tops $1.43 trillion, trade surplus hits $185.7 billion in first 9 months

China's forex reserve tops $1.43 trillion

www.chinaview.cn 2007-10-12 20:39:38 Print

BEIJING, Oct. 12 (Xinhua) --

China's foreign exchange reserve had reached 1.43 trillion U.S. dollars by the end of September, up 45.1 percent year-on-year, the People's Bank of China announced on Friday.

A total of 367.3 billion U.S. dollars were added to the country's foreign exchange reserve in the first nine months of 2007, said the central bank.

In September alone, the forex reserve rose by 25 billion dollars.

China's soaring trade surplus is still the major contributing factor to the forex reserve boom.

Data newly released by the General Administration of Customs shows that China's trade surplus for the first nine months of the year has reached 185.7 billion dollars, exceeding the total trade surplus of 177.47 billion dollars for 2006.

The huge forex reserve is considered the main reason for excess liquidity in China, as the central bank has to spend quantities of basic money to purchase foreign exchange, thus aggravating the problem of surplus fluidity.

By the end of September, the M2 -- a broad measure of money supply, which indicates the monetary demand of the whole of country and possible inflation -- grew by 18.45 percent from a year ago to 39.31 trillion yuan.

The growth rate is 1.39 percentage points higher than the end of June and still higher than the target growth of 16 percent set by the central bank at the beginning of this year.

A total amount of 195.8 billion yuan was poured into the market during the first nine months, 30.2 billion yuan more than the same period of last year.

On the other hand, continuous growth of the forex reserve has in fact increased the pressure on appreciation of the Chinese currency, which in turn has exerted greater pressure on value preservation of China's forex reserve.

The central parity rate of the RMB was 7.5114 to the U.S. dollar on Friday.

In a move to make better use of the country's huge forex reserve, China announced the establishment of the China Investment Corporate Ltd. (CIC), the country's state forex investment company at the end of September.

The state-owned investment company will invest in overseas financial markets.

The registered capital of 200 billion dollars of the CIC all comes from the forex reserve of the country, which will be obtained by issuing a total of 1.55 trillion yuan special treasury bonds by the Ministry of Finance (MOF).

So far, the ministry has issued more than 700 billion yuan (93.3 billion dollars) of special treasury bonds, with 600 billion yuan to the central bank and 100 billion yuan targeting the general public. It will issue another 100 billion yuan of treasury bonds by the end of this year.

Editor: Lin Li

China's trade surplus hits $185.7 bln in first 9 months

www.chinaview.cn 2007-10-12 13:07:31 Print

BEIJING, Oct. 12 (Xinhua) --

China's trade surplus hit 185.65 billion U.S. dollars in the first nine months, surpassing the full-year figure in 2006, the General Administration of Customs said Friday.

September's trade surplus, though 1.06 billion U.S. dollars less than the previous month, reached 23.91 billion U.S. dollars, up 56.3 percent from the same period a year ago.

Last year, China's trade surplus soared 74.2 percent to a record 177.47 billion U.S. dollars.

Exports in the Jan.-Sept. period rose 27.1 percent year on year to 878.2 billion U.S. dollars, while imports were up 19.1 percent to 692.6 billion U.S. dollars.

This year's trade volume is likely to reach a record two trillion U.S. dollars, compared with 1.76 trillion U.S. dollars in2006, said analysts.

With government restrictions on exports of natural resources, China's exports of crude oil in the first nine months dropped 49.3 percent to 2.44 million tons.

Meanwhile, imports of crude oil rose 13.6 percent to 1.24 trillion tons, while imports of refined oil dropped eight percent to 26.8 million tons.

The oil imports were worth a total of 63.7 billion U.S. dollars.

Fair Use Notice

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.