Chinanews, Beijing, Oct. 8 - A group of experts at the State Administration of Foreign Exchange issued a report last Friday saying that during the first half of this year, China continued to have a relatively strong anti risk capacity for its international payments. In a short-term view, it is unlikely for China to encounter any international payments crisis, although some potential risks still remain in sustained favorable balance of international payments.

 

According to the report, during the first half of this year, the total transaction volume of international payments reached 1.45 trillion US dollars, up 28% from the corresponding period of last year. This transaction volume was 127% of the GDP figure in the same period, rising 18 percentage points from 2005, which shows that the scale of opening has further deepened in China and the country’s economy has become more closely linked with the rest of the world. International payments have remained surplus in both current projects as well as in capital and finance projects. In current projects, the balance of international payments has reached 91.6 billion US dollars, up 36% from last year while in capital and finance projects, the international payments have amounted to 38.9 billion US dollars, up 2% from last year.

 

Judged by the major indexes used in the world, China’s international payment remained good during the first half of this year. If judged by import payment capacity, China’s foreign exchange reserves equaled the total amount of its import volume of 16 months. If judged by debt payment capacity, China’s foreign exchange reserves during the first half of this year was 566% of its short-term foreign debts, far above the internationally recognized alerting point, which usually stands at 100%. Its solvency ratio was 3.92%, far below the internationally recognized point of 25%.