The country's foreign exchange reserves expanded to US$1.43
trillion at the end of September, a year-on-year increase of 45.1
percent, the central bank said on Friday.
That's 3.5 percentage points higher than in the first six
months.
"The increasing trade surplus has been the main driver of the
reserve expansion," said Hu Shaowei, a senior economist with the
State Information Center.
China's trade surplus was US$185.7 billion in the first nine
months - more than for the whole of last year - according to
Customs.
It may also be a result of incoming "hot money" as the domestic
stock and property markets surge, said Chen Xingdong, chief
economist of BNP Paribas Peregrine Securities in Beijing.
Some analysts said the reserves could have been higher if not
for the transfer of funds to the newly launched China Investment
Corp, but the central bank did not reveal whether this is the
case.
Hu said the expanding trade surplus is difficult to control and
contributes to the country's ballooning reserves.
The Chinese Academy of Social Sciences' latest macroeconomic
forecast said the surplus could reach a record high of about US$260
billion this year.
Meanwhile, the central bank said, the annual growth in broad
money supply or M2 accelerated to 18.45 percent in September, up by
1.39 percentage points from the end of June.
Yuan-denominated lending rose to 25.9 trillion yuan at the end
of September, a year-on-year increase of 17.13 percent.
Banks extended 3.36 trillion yuan in new loans in the first nine
months of the year, 607.3 billion more than last year, which,
analysts said, could add pressure to fixed-assets investment.
The central bank said in a statement that the financial
situation was, on the whole, "stable".
(China Daily October 13, 2007)
