BOP 2015

China's balance of payments displayed "surplus under the current account and deficit under the capital and financial account (excluding reserve assets, the same below)" in 2015. Specifically, the surplus under the current account was $330.6 billion, up by 19 percent year-on-year. The surplus under the current account accounted for 3.0 percent of Gross Domestic Product (GDP), a decline of 0.3 percentage point from the level in 2014, but still within the internationally accepted range. Meanwhile, the deficit in the capital and financial account changed from a deficit of $51.4 billion in 2014 to $485.3 billion. As of the end of 2015, the balance of China's foreign exchange reserves was $3,330.4 billion, down by $512.7 billion year-on-year.

(I) Current account maintained considerable surplus

The surplus of trade in goods grew rapidly. According to the statistical coverage of the balance of payments, in 2015 China's goods exports and imports amounted to $2,142.8 billion and $1,575.8 billion, a decline of 5 percent and 13 percent, respectively. The surplus reached $567 billion, representing a year-on-year increase of 30 percent.

The deficit in trade in services expanded further. In 2015, receipts from trade in services reached $286.5 billion, a rise of 2 percent year-on-year, whereas payments reached $468.9 billion, a rise of 4 percent. The deficit reached $182.4 billion, an increase of 6 percent from the previous year. Specifically, the deficit under transportation narrowed by 36 percent, while the deficit under tourism continued the expanding trend, increasing by 38 percent year-on-year.

The primary income was changed to deficit. In 2015, income under the primary income reached $227.8 billion, a year-on-year drop of 5 percent, whereas payments reached $273.2 billion, a year-on-year rise of 21 percent, leading to a deficit of $45.4 billion compared with the surplus of $13.3 billion in 2014. Specifically, employee compensation recorded a surplus of $27.4 billion, a year-on-year rise of 6 percent. Investment income registered a deficit of $73.4 billion, expanding by 4.9 times compared with the same period last year. Specifically, income from external investment reached $193.9 billion, a year-on-year decrease of 7 percent; profits, interests and dividends and other payments of foreign investments in China reached $267.3 billion, up by 20 percent year-on-year.

The secondary income witnessed deficit. In 2015, the secondary income registered receipts of $35.9 billion, decreasing by 13 percent from the same period of the previous year, whereas payments reached $44.6 billion, a year-on-year rise of 12 percent, leading to a deficit of $8.7 billion compared with the surplus of $1.4 billion in 2014.

(II) Capital and financial account witnessed rising deficit

Direct investments maintained surplus. According to the statistical coverage of the balance of payments, direct investments posted a surplus of $62.1 billion in 2015, a year-on-year decline of 57 percent. Specifically, assets of direct investments witnessed a net increase of $187.8 billion, rising by 53 percent year-on-year, which was the major reason for the decline of the direct investment surplus. Liabilities of direct investments posted a net increase of $249.9 billion, down by 7 percent year-on-year.

Balance of portfolio investments changed to deficit. In 2015, portfolio investments recorded a deficit of $66.5 billion, while there was a surplus of $82.4 billion in 2014. Specifically, net outflows of China's external portfolio investments were $73.2 billion, a year-on-year increase of 5.8 times, whereas net inflows of portfolio investments into China from overseas reached $6.7 billion, down by 93 percent year-on-year.

Deficits of other investments expanded remarkably. In 2015, other investments posted a deficit of $479.1 billion, expanding by 72 percent year-on-year. Specifically, China's external loans, trade credit, cash deposits and other assets witnessed a net increase of $127.6 billion, down by 61 percent year-on-year; loans and trade credit provided from overseas and cash deposits of overseas players and other liabilities registered a net decrease of $351.5 billion; while those in 2014 indicated a net increase of $50.2 billion.

(III) Reserve assets declined to some extent

In 2015, after deducting changes in non-transaction values such as the exchange rates and prices, China's reserve assets decreased by $342.9 billion. Specifically, foreign exchange reserve assets registered a decline of $342.3 billion, an annual increase of $118.8 billion compared with 2014.

(IV) Net errors and omissions on the debit side

In 2015, net errors and omissions reached $188.2 billion on the debit side, accounting for 5 percent of the combined value of exports and imports of goods based on the balance of payments’ statistical coverage.

The balance of payments (BOP), also known as balance of international payments, summarizes all transactions that a country's individuals, companies, and government bodies complete with individuals, companies, and government bodies outside the country. These transactions consist of imports and exports of goods, services, and capital, as well as transfer payments, such as foreign aid and remittances.

The balance of payments divides transactions into two accounts: the current account and the capital account. The current account includes transactions in goods, services, investment income, and current transfers. The capital account, broadly defined, includes transactions in financial instruments and central bank reserves. Narrowly defined, it includes only transactions in financial instruments.