China's 1H current account surplus shrinks 32%

Preliminary data showed China’s current account surplus fell 32% year-on-year, a sign of the impact of the global financial crisis on China’s economy, the Wall Street Journal reported. The State Administration of Foreign Exchange (SAFE) said the surplus was US$130 billion in the first six months of the year, down from US$191.72 billion in 2008. SAFE did not explain the figures, but a final first-half balance-of-payments report will be released in the fall. The contraction, the first since 2004, was due to a smaller trade surplus and lower net direct investment. China’s trade surplus was US$107.5 billion in the first seven months of the year, down from US$295.5 billion in 2008. First-half net direct investment was down 50% to US$20.57 billion, from US$40.75 billion in 2008.