China's external financial assets hit $5.17t

BEIJING -- China's external financial assets expanded 9 percent to reach $5.17 trillion by the end of 2012, the State Administration of Foreign Exchange said Monday.

On the back of slower growth in China's increased foreign exchange reserves and overseas investment, the growth rate in external financial assets marked a 6-percentage point slowdown from the previous year, according to SAFE data.

Meanwhile, China's external liabilities rose 13 percent year-on-year to $3.44 trillion, resulting in net external financial assets of $1.74 trillion last year, up 3 percent year on year.

China's external financial assets consist of foreign exchange reserves, outbound direct investment, securities investment portfolios and other investment.

About 65 percent of China's external financial assets were in the country's $3.40 trillion of foreign exchange reserves, marking the lowest proportion since 2008, according to the top foreign exchange regulator.

China's outstanding $502.8 billion of ODI, $240.6 billion of securities portfolio and $1.04 trillion of other unspecified investments made up 10 percent, 5 percent and 20 percent, respectively, of the country's financial assets.

The SAFE said the structure of its external financial assets was optimized in 2012, with foreign exchange reserves contributing to only 30 percent of asset growth, compared with an average of 65 percent since 2004.

In terms of China's foreign financial liabilities, foreign direct investment in China totaled $2.16 trillion, securities portfolios reached $336.4 billion and other unspecified investment stood at $942.6 billion.

About 64 percent of new foreign financial liabilities stemmed from new FDI inflows, indicating that foreign funds remained optimistic about the prospects of China's economy, SAFE said.

Developed economies tend to keep a greater share of their external financial assets in securities and ODI, while emerging countries like the Republic of Korea, Russia and Brazil hold more than 40 percent of their external assets in foreign exchange reserves, according to SAFE data.

The foreign exchange regulator also revised the FDI outstanding for 2011 by $102.7 billion to $1.91 trillion.