China's current account surplus nears $200b in 2016

BEIJING - China's current account surplus stood at $196.4 billion last year, the country's foreign exchange regulator said Thursday.

The goods-trade surplus declined 14 percent from the 2015 level to $494.1 billion last year, while the service trade posted a deficit of $244.2 billion, up 12 percent year on year, the State Administration of Foreign Exchange (SAFE) said in a statement.

The current account surplus last year accounted for 1.8 percent of the country's gross domestic product, the regulator said.

The capital and financial account recorded a surplus of $26.3 billion in 2016, with a deficit of $300 million for the capital account and a deficit of $417 billion for the non-reserve financial account, said SAFE.

Reserve assets, most of which are foreign exchange reserves, decreased by $443.7 billion last year.

In the fourth quarter last year, China's current account surplus stood at $11.8 billion, down from $69.3 billion in the third quarter, according to SAFE.

The country will continue to run a current account surplus, as well as a capital and non-reserve financial account deficit in 2017, SAFE said.

The goods-trade surplus will stay at "a certain level," while growth in the service trade deficit is likely to stabilize this year, it said.

Meanwhile, the deficit under the capital and non-reserve financial account will narrow, as economic improvement at home will lure more capital inflows, and domestic firms are expected to make more rational and stable outbound investment, said SAFE.

The regulator expected cross-border capital movement would gradually become balanced.

As a result of steady progress in the reform of the renminbi exchange rate formation mechanism, a more flexible renminbi will facilitate two-way cross-border flows of capital, it said.