The State Administration of Foreign Exchange (SAFE) published a report on Friday, announcing that the international balance of payments for 2002 was, overall, "in a good shape.''

The current account, which mainly includes trade in commodities and services, registered a surplus of US$35.4 billion, according to SAFE.

The capital account, including a US$46.79 billion surplus in foreign direct investment (FDI) and a US$10.3 billion deficit in securities investment, enjoyed a surplus of US$32.2 billion.

Analysts say the overall picture is very similar to the situation in previous years, with surpluses in trade and FDI and a measurable deficit in securities investments.

But the current account surplus in 2002 more than doubled from the 2001 figure of US$17.4 billion.

Backed by strong economic growth momentum, China's exports soared by 22.3 per cent year-on-year in 2002, pushing the year-long trade surplus to US$30.35 billion, analysts explained.

This year, however, does not look as rosy, with the SARS epidemic likely to deal a blow to exports, or even the surging FDI, analysts said.

"This year, the total (of the current account surplus) is set to shrink, or even reverse to a deficit,'' said Wang Yuanhong, a senior researcher with the State Information Centre.

"But it's hard to make predictions about the entire international balance of payments at this stage.''

Before the killer disease caused widespread panic worldwide, China had already suffered its first quarterly trade deficit in years in the January-March period, as import surges overwhelmed export rises.

China's foreign exchange reserves jumped by 36 per cent on a year-on-year basis to US$286.4 billion at the end of 2002, the SAFE report said.

The figure had already risen to US$316 billion by the end of March.

(China Daily May 10, 2003)