Forex growth continues in first quarter

A Chinese resident counts his yuan and US dollar banknotes in Qionghai, South Chinas Hainan province, March 15, 2014. [Photo/IC]

China recorded a $7 billion surplus in its current account and a $94 billion surplus in its capital and financial account in the first quarter of 2014, according to data released by the State Administration of Foreign Exchange (SAFE) on Thursday.

The current account surplus included a $40.4 billion goods trade surplus and a $32.8 billion service trade deficit. The capital and financial account surplus included a $53.7 billion net inflow of direct investment, a $22.3 billion net inflow of portfolio investment and a $17.8 billion net inflow of other investment, said the SAFE in on its website.

The nation's foreign exchange reserves rose to $3.95 trillion by the end of the first quarter, according to the People's Bank of China. Analysts expect that forex reserves will exceed $4 trillion in the second quarter at the current growth rate.

China's forex reserves have doubled during the past five years since exceeding $2 trillion in April 2009.

The rapid accumulation of forex reserves is leading to difficulties in steering macroeconomic and monetary policies, and the nation will keep reserves at a "reasonable" level, said Huang Guobo, chief economist of the SAFE in an online interview earlier this month.

Contact the writer at jiangxueqing@chinadaily.com.cn