BEIJING: China is expected to maintain "relatively big" account surplus in the second half this year, helped partly by demand from Western countries during the holiday season in the latter part of 2016, the country's foreign exchange regulator said on Friday.
China posted a final current account surplus of $64.1 billion in the second quarter of this year and a deficit of $14.3 billion in its capital and financial account, the State Administration of Foreign Exchange (SAFE) said.
SAFE expects China's domestic demand to remain more or less stable, with commodity prices staying on the low end. On the other hand, despite the still-sluggish overseas demand, holiday season in most Western countries in the second half of the year would give Chinese exports a boost, it said.
Traditionally exports to Western markets ramp up from Asia in October to meet demand for Thanksgiving, Christmas and New Year holidays.
In the first half of this year, China posted a final current account surplus of $103.5 billion and a final capital and financial account deficit of $14.5 billion.
Earlier, China reported a preliminary current account surplus of $59.4 billion in the second quarter of 2016 and a deficit of $59.4 billion in its capital and financial account.
SAFE said China's cross-border capital flows will remain normal in the second half thanks to positive factors such as more transparency in how the yuan exchange rate is managed and also due receding pressure to service the huge debt held by Chinese companies.
Among the risks to capital inflows, it cited a possible rate hike by the US Federal Reserve and the ripple effects of Britain's decision to exit the European Union.
China will also crack down on forex violations and strengthen monitoring of cross-border capital flows, SAFE said, adding it will also push forward to achieve capital account convertibility in an orderly manner.
China's economy expanded slightly faster than expected in the second quarter but private investment growth shrank to a record low, suggesting future weakness that could pressure the government to roll out more support measures.
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