Central Bank of China

PRESS RELEASE Release Date: February 20, 2004




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BALANCE OF PAYMENTS

For the fourth quarter of 2003, the current account registered a surplus of US$7.80 billion, and the net inflow in the financial account amounted to US$4.48 billion, while reserves increased by US$12.43 billion.

In terms of the current account, exports and imports grew by 16.8% and 24.7% year on year, respectively, leading to a surplus of US$6.55 billion in goods trade for the quarter. Exports recorded a historical high figure due to the increased export to Asian countries. Imports were also boosted by expansion in exports and the gradual recovery in domestic demand. Both receipts and payments in the services account registered record-high quarterly figures. But services account deficit decreased to a record-low of US$0.35 billion owing to the increase in net receipts from merchanting trade. Income surplus increased by US$0.46 billion to US$2.32 billion year on year, owing to the growth in the dividends income from residents' direct investment abroad. Current transfers registered a deficit of US$0.71 billion. In total, the current account posted a surplus of US$7.80 billion, second to the figure recorded in the fourth quarter of 2002.

In the financial account, direct investment exhibited a net outflow of US$2.04 billion while portfolio investments and other investment exhibited a net inflow of US$0.36 billion and US$6.16 billion, respectively. The record high figure posted by the net outflow in direct investment indicated the corporate sector's increased investment abroad in view of the gradual pick up in the global economy. Net inflow of portfolio investment by non-residents recorded a second high of US$9.06 billion as a result of the massive inflow of foreign 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$5.63 billion during the fourth quarter of the year. Portfolio investment abroad by residents recorded a net outflow of US$8.70 billion, only second to the figure recorded in the second quarter of 2003. Other investment registered a net inflow mainly because funds flow from overseas branches to local banks and caused the banking sector to register a net inflow of US$3.37 billion.

For the year 2003 as a whole, the current account surplus built up to US$28.57 billion, the capital account deficit was US$0.09 billion and the financial account posted a net inflow of US$6.29 billion with reserves rising by US$37.09 billion. Among which, the current account surplus, residents' overseas portfolio investment, non-residents' portfolio investment in local market, and increases in reserves all posted record-high figures.

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