Central Bank of China
PRESS RELEASE Release Date: May 20, 2004




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BALANCE OF PAYMENTS

For the first quarter of 2004, the current account registered a surplus of US$5.83 billion, the net inflow in the financial account amounted to US$17.44 billion, and the Bank's international reserves increased by US$21.10 billion.

In terms of the current account, both exports and imports were the second-highest quarterly figures on record. Exports grew by 22.7% year on year mainly due to the global economic rebound. Rising import demand for raw materials derived from exports, the increase in demand for capital equipments, coupled with mounting prices of raw materials, led imports to grow by 31.4%. As imports grew by a larger amount than exports, surplus of goods trade shrank to US$4.35 billion, a decline of 20.2% over the same quarter last year. Services account deficit widened to US$1.22 billion, mainly as a result of the sharp increase in rent for chartered aircraft and ships, and travel payments. Income surplus increased by 7.3% year on year to a record-high of US$3.53 billion due to the increase in returns from residents' equity investment. Current transfers registered a deficit of US$0.83 billion. In total, despite the growth in income surplus, goods surplus declined while services deficit and current transfers deficit both widened, leading the current account surplus to decline to US$5.83 billion, a decrease of US$1.83 billion or 23.9% over the corresponding quarter last year.

In the financial account, direct investment exhibited a net outflow of US$1.62 billion. Portfolio investment exhibited a net inflow of US$0.37 billion, mainly attributable to the massive inflow of international funds. In addition, the issuance of offshore corporate bonds and depositary receipts amounted to US$4.17 billion during the quarter, causing the portfolio investment by non-residents to record a net inflow of US$7.34 billion, only next to the figures recorded in the third and fourth quarters of 2003. Portfolio investment abroad by residents recorded a net outflow of US$6.97 billion. Other investment posted a record-high net inflow of US$18.69 billion, mainly because funds shifted from abroad to local banks in expectation of the NT dollar's appreciation as well as the increase in non-residents' NT dollar deposits in local banks before investing in the domestic equity market.

Notes: 1.The upcoming balance of payments data will be released at 16:20 on August 20, 2004.

2. For the release schedule for the next six months, check the CBC website at http://www.cbc.gov.tw/account/index.html.

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