Central Bank of China
PRESS RELEASE Release Date: November 19, 2004



BALANCE OF PAYMENTS
For the third quarter of 2004, the current account registered a surplus of US$5.33 billion, while the financial account registered a net outflow of US$ 6.34 billion, leading to a decrease of US$1.49 billion in the Bank¡¦s reserve assets, the first seen since the second quarter of 2001.

In terms of the current account, exports hit the highest figure on record. Led by the booming global economy, exports grew by 21.4% on a year-on-year basis. Imports grew by 34.4%, the second highest figure on record, as a result of rising demand for imported raw materials and capital equipments coupled with mounting prices of crude oil and raw materials. As imports increased by a larger amount than exports, surplus on goods shrank to US$5.02 billion, a decline of 30.7% or US$2.23 billion over the same quarter last year. The services account registered a deficit of US$1.29 billion, representing an increase of 7.2% from a year earlier as a result of the increase in freight payments. Income surplus sharply expanded by 58.7% to US$2.46 billion mainly due to the increase in investment income from the residents¡¦ foreign exchange assets and direct investments abroad. Current transfers deficit widened by 13.5% to US$0.87 billion. In total, despite an increase in income surplus, the decrease in the surplus of goods, combined with the increase in deficit of services and current transfers made current account surplus drop to US$5.33 billion, a decrease of US$1.51 billion or 22.1% over the corresponding quarter last year.

With regard to the financial account, direct investment and portfolio investment exhibited net outflows of US$0.79 billion and US$1.07 billion, respectively. The net inflow of inward foreign direct investment (FDI) increased by US$0.59 billion to US$0.65 billion from a year earlier, indicating a rebound in inward FDI. Portfolio investment abroad by residents exhibited a net outflow of US$3.81 billion. Portfolio investment by non-residents in domestic securities for the quarter recorded a net inflow of US$2.74 billion, mostly attributable to the issuance of offshore corporate bonds and depositary receipts worth US$1.65 billion by domestic enterprises as well as the inflow of foreign equity funds to the local market. Other investment posted a net outflow of US$ 4.48 billion, mainly due to the increase in the banking sector¡¦s deposits placed with foreign banks and the increased repayment of foreign loans.

For the first three quarters of the year, the current account surplus built up to US$16.75 billion. The financial account posted a net inflow of US$8.51 billion with Bank¡¦s reserve assets rising by US$23.69 billion.

Notes: 1.The next balance of payments data will be released at 16:20 p.m., February 21, 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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