Last Year, Foreign Investment Lost 59 Billion 900 Million US Dollars.

In 2013 P, the difference between China's capital export earnings and foreign direct investment profits in China was -599 billion dollars, the highest in 30 years, second only to -853 billion in 2011, and 70% in 2012 than in 2012.

According to recent data from the foreign exchange administration (P), China's foreign investment income deficit in 2013 was US $59 billion 900 million, an increase of 70% over the previous year.

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< p > this set of data once again aroused the insiders' discussion on China's foreign assets and liabilities structure.

"It is clear that the problem lies in the structure of assets and liabilities, but it can not be reversed overnight, without excessive speculation.

The current diversification of foreign investment is under way.

A person close to the foreign exchange administration said.

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< p > the so-called assets and liabilities structure is mainly that China's foreign assets are mainly foreign exchange reserve assets, and foreign liabilities are mainly equity FDI and equity warrant liabilities, that is, attracting foreign capital mainly by equity liabilities, and investing mainly in creditor's rights through foreign exchange reserves.

The difference between the two yields is almost 20%, which is the root cause of the continued deficit in China's foreign investment earnings.

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< p > to adjust the structure of assets and liabilities, the general consensus now is to raise the ODI quota of foreign direct investment and raise the rate of return on capital, but there is still some objection to the opening of capital account.

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< p > strong > $59 billion 900 million, the external reserve deficit is less than /strong > /p >

< p > recently, the international balance of payments released by the foreign exchange administration in 2013 showed that China's foreign investment in 2013 covered foreign exchange reserves, foreign investment and foreign direct investment, and the profit margin of foreign direct investment FDI in China's investment amounted to -599 billion, reaching the highest level in 30 years, second only to 2011's -853 billion dollars, an increase of 70% over 2012.

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< p > China is generally recognized as the world's largest creditor country. As at the end of 12 2013, the reserve assets of the Central Bank of China were 3 trillion and 880 billion US dollars and its external net assets were 1 trillion and 970 billion US dollars, but the net assets of US $1 trillion and 970 billion earned a deficit of 59 billion 900 million US dollars in investment income, and the rate of return on investment was -3%.

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< p > in 2013, the foreign exchange administration's balance of payments report attributed the deficit of US $59 billion 900 million in investment income to China's external assets and liabilities structure: "mainly reflects the structure of China's foreign assets and liabilities, and the current foreign investment in China increased by 23% over the previous year."

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< p > according to Guan Tao, director of the balance of Payments Division of the foreign exchange administration, from 2005 to 2012, the average foreign investment income of China was 3.3%. In addition, according to the calculation of the national balance sheet research group of the Chinese Academy of Social Sciences, the earning margin of overseas FDI in China averaged 22%, and the United States was even higher.

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In this way, the total foreign exchange reserves of China are 3 trillion and 880 billion US dollars, and the annual assets income is about 128 billion 40 million US dollars, while China's FDI income of 1 trillion and 500 billion US dollars is 330 billion US dollars.

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< p > < strong > multi pronged adjustment < a href= "http://www.91se91.com/news/index_c.asp > > asset liability < /a > structure < /strong > /p >

< p > a person close to the regulatory department said that the investment income in China is negative for a long time with structural and historical stages. It is related to the distribution of China's foreign financial assets in the central bank and the distribution of liabilities in the private sector, and is directly related to the economic development stage and economic policy of our country.

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< p > by the end of 2013, our country's "a href=" http://www.91se91.com/news/index_c.asp "> foreign net assets < /a > US $1 trillion and 970 billion, of which foreign exchange reserve assets are close to US $3 trillion and 900 billion. If we exclude foreign exchange reserve assets, China's net external liabilities will be 1 trillion and 910 billion US dollars, which is mainly reflected in the external liabilities of the private sector.

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< p > based on the national balance sheet research, the Chinese Academy of social sciences has suggested that in order to improve the current balance sheet structure, we need to promote the accumulation of foreign exchange in the public, reduce the official concentration of foreign exchange assets, and promote the direct investment of Chinese enterprises, especially private enterprises, and thus reduce the proportion of excessive FDI net liabilities.

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Professor Fang Gang, director of the China National Economic Research Institute, said in a public speech recently that the main growth of China's foreign reserves is capital financial accounts, rather than current accounts. If more capital is allowed to flow out, China's external reserves may not grow so much.

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< p > according to Guan Tao's recent introduction, from 2010 to 2013, the contribution rate of current account surplus and capital financial project to foreign exchange reserve changed from 73 to 46, while the contribution rate of foreign exchange reserve in the first quarter of 2014 changed to 19.

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< p > "compared with attracting foreign capital to support domestic economic construction, China should open up the domestic capital market to a greater extent, attract financing through the bond market, and the financing cost of the bond market is lower than equity financing, which is the market rule."

A European underwriter of foreign bank bonds in China said.

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< p > added: "this requires further opening of capital account, but from the recent actions of regulators, the bond market is gradually opening to overseas investors, but the current share is still very low, which is not enough to affect the structure of assets and liabilities, and more direct way is to promote more Chinese Enterprises to invest overseas. However, given the insufficient experience of Chinese enterprises in overseas investment and the low level of industry, there is still a big gap between the investment income of overseas Chinese enterprises and developed countries."

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< p > in addition to encouraging enterprises to go out, the implementation of Shanghai and Hong Kong Tong is also promoting the cross-border investment of individual investors.

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In order to gradually realize the decentralization of foreign exchange assets and focus on official reserves, the mandatory foreign exchange sale system is gradually being relaxed. Since 2009, the foreign exchange administration has allowed enterprises to maintain an appropriate balance of foreign exchange and allow foreign profits to be retained for direct overseas investment. P

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< p > in addition, it is worth noting that a new normal now emerging is cross-border capital flows and two-way fluctuations in the RMB exchange rate, which will also play an adjustment role in the improvement of China's balance sheet in the long run. As China's current account is gradually balanced, and arbitrage funds and arbitrage funds are reduced at the same time, China will gradually say goodbye to the era of rapid accumulation of foreign exchange reserves.

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< p > some scholars believe that the most urgent thing to change the management mode of foreign exchange reserves is to reduce the balance of foreign exchange reserves as soon as possible, thereby reducing the passive situation of foreign exchange management institutions' passive management of foreign exchange and the logic of official foreign exchange management in the balance of assets security and income.

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As early as the beginning of the year, P, vice president of the people's Bank of China and Yi Gang of the foreign exchange administration, said that the huge foreign exchange reserves had exceeded the appropriate quota, and the increase was not cost-effective. The marginal cost was already greater than the marginal revenue.

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< p > < strong > < a > href= > http://www.91se91.com/news/index_c.asp > > financial reform < /a > correction < /strong > /p >

< p > in addition to encouraging enterprises to invest overseas, Ding Zhijie, a professor at the University of foreign trade and economics, thinks that the internationalization of RMB, capital account liberalization, and interest rate exchange rate marketization are all aimed at correcting the past distortions, which is one of the root causes of unreasonable assets and liabilities in China for a long time.

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Yu Yongding, director of the world economic and Political Research Institute of the Chinese Academy of Social Sciences, believes that capital account liberalization does not necessarily solve the current problems. The most important thing is that the central bank is interfering in the foreign exchange market, resolving arbitrage and arbitrage, and then considering capital account liberalization, because capital account liberalization at the present stage implies more short-term capital inflow fluctuations. P

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Huo Deming, Professor of the National Development Research Institute of Peking University, said that the conditions for capital account liberalization are difficult to achieve in the current situation at home and abroad, otherwise there will be short-term cross-border capital fluctuations, which will affect the stability of China's financial system. P

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"P >" from the policy analysis carried out by the current regulatory agency, 2014 should be a year for a major breakthrough in exchange rate reform. On the one hand, the depreciation of the RMB since February has provided the conditions for the expansion of the RMB's intra - day volatility in the RMB. The central bank has announced the expansion of the volatility in March 17th; moreover, the central bank and the relevant agency leaders have repeatedly stressed that it will fade out the normal form of foreign exchange intervention and the RMB exchange rate will be more determined by the market.

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