Central Bank of China

PRESS RELEASE Release Date: November 20, 2003




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BALANCE OF PAYMENTS

For the third quarter of 2003, the current account registered a surplus of US$6.94 billion, and the net inflow in the financial account amounted to US$5.15 billion, while reserves increased by US$12.94 billion.

In terms of the current account, exports and imports grew by 9.7% and 2.4% year on year, respectively, leading to a surplus of US$7.28 billion in goods trade for the quarter. The services account registered a deficit of US$1.2 billion, representing an increase of 12.7% from a year earlier as a result of declines in travel receipts. Although Taiwan was removed from the SARS alert list in June, the number of tourists from abroad decreased by 32% year on year. Consequently, travel receipts totaled US$0.69 billion, representing a reduction of US$0.35 billion or 33.7% over the corresponding quarter last year. The number of residents visiting abroad slightly edged up 0.7%, causing travel payments to increase by 5.7% or US$0.11 billion year on year, to US$2.07 billion. Besides, expenses on ECB and DR issuances sharply increased for the quarter. Income surplus declined by US$0.38 billion, or 19.1%, to US$1.62 billion. The decline was mainly due to the increase in outward remittance of income from direct investment by non-residents. Current transfers deficit was US$0.76 billion. In total, the current account registered a surplus of US$6.94 billion, an increase of US$1.9 billion from the same quarter of last year.

With regard to the financial account, direct investment and other investment posted net outflows of US$1.58 billion and US$0.04 billion, respectively, while portfolio investments exhibited a net inflow of US$6.77 billion. The rise in capital inflow can largely be attributed to the massive portfolio allocation of international funds in Asia and inflow of foreign equity funds in the domestic market in expectation of better earnings outlook of local listed companies. In addition, the issuance of ECB and DR amounted to US$7.72 billion during the third quarter of the year, causing the net inflow of portfolio investment by non-residents for the quarter to amount to US$13.66 billion, the highest quarterly figure ever recorded. Portfolio investment abroad by residents declined from last quarter's record-high of US$12.46 billion to US$6.89 billion, due to the decrease in overseas investment by local insurance companies.

For the first three quarters of the year, the current account surplus built up to US$20.91 billion, the capital account deficit was US$0.06 billion and the financial account posted a net inflow of US$1.7 billion with reserves rising by US$24.66 billion.

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