Central Bank of China
PRESS RELEASE Release Date: June 30, 2004


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New Release of the International Investment Positions
In line with the trend in the development of international financial statistics and to enhance information disclosure, the Central Bank of China (CBC) releases Taiwan's International Investment Position (IIP) in accordance with the Special Data Dissemination Standard (SDDS) of the International Monetary Fund (IMF). International Investment Positions released this time cover data from the year 2000 to 2003. Year-end International Investment Position will be released at the end of next June. The data is accessible via the CBC website and the Balance of Payments Quarterly.

Due to the longstanding current account surplus, Taiwan's international investment registered net asset positions during the 2000-2003 period. Net asset position reached US$308.51 billion at the end of 2003. Direct investment, portfolio investment, financial derivatives, and other investment all recorded net asset positions.

In regard to external assets, the Bank's reserve assets remained the largest share with the figure rising from 37% at year-end 2000 to 44% at year-end 2003. As of the end of 2003, reserve assets were US$211.14 billion. Other investment, which recorded US$100.07 billion at 2003 year-end, accounted for the second-largest share of external assets, while its share declined from 30% at year-end 2000 to 21%. Bank loans and deposits abroad as well as the private sector's holding of foreign deposits and real estate investment were the main items. Portfolio investment abroad by residents continued to trended up and reached as high as US$87.72 billion at 2003 year-end, approximately 2.6 times the level of 2000 year-end due to the internationalization of investment portfolio by local residents mainly through the purchases of overseas mutual funds. In addition, insurance companies increased their investment in foreign securities with an aim to raise earnings. Direct investment abroad also reached US$84.09 billion at the end of 2003 due to the need of domestic firms to lower operating cost, enhance competitiveness, and adopt global logistic strategies. Instead of market price, the stock of direct investment abroad was measured on a net-worth basis because most companies invested are not exchange-listed. Financial derivatives investment merely recorded US$0.22 billion at the end of 2003.

In regard to external liabilities, portfolio investment by non-residents claimed the lion's share. The figure trended down slightly from 40% recorded at 2000 year-end before moving up to 47%, or US$82.86 billion at 2003 year-end. The increase was mainly due to inflows of foreign capital and more issues of offshore corporate bonds and depositary receipts by residents as well as a marked increase in the local stock prices. Other investment, which was mainly foreign claims on the banking sector, accounted for an average of 35% of total external liabilities during 2000-2003 and recorded US$54.56 billion at the end of 2003. Direct investment accounted for an average of 25% of total external liabilities during 2000-2003 and increased to US$37.13 billion at 2003 year-end. Most direct investment by non-residents was measured on a market price basis, and price fluctuation of the local stock market may affect the value of foreign direct investment substantially. The amount of financial derivatives merely recorded US$0.18 billion.

Notes: 1. The next international investment position data will be released at 16:20 on June 30, 2005.

2. For the release schedule for the next six months, please check the CBC website at http://www.cbc.gov.tw/EngHome/ESDDS/calacal.asp

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