China's current-account surplus in the third quarter more than doubled from a year earlier, its foreign-exchange regulator said Thursday, indicating the country still faces challenges in rebalancing the economy away from a reliance on external demand.
The current-account surplus—the broadest measure of China's trade balance with the outside world—was $102.3 billion in the third quarter, the State Administration of Foreign Exchange said in a statement.
In the second quarter the surplus was $72.9 billion, up 35% from a year earlier, which was a sharp rebound from the first quarter, when it fell 32% from a year earlier.
The rebounding surplus may reinforce concerns, voiced by some economists in recent months, that China's external imbalances are returning to pre-crisis levels after temporarily declining during the global economic downturn. Such concerns could, in turn, put further pressure on China to allow faster yuan appreciation.
The third quarter's current-account surplus was equivalent to 7.2% of gross domestic product, according to a Dow Jones Newswires calculation, compared with 5.5% of GDP in the second quarter and 4.5% in the first quarter.
"China was making the argument that since the current-account surplus was falling as a percent of GDP, that indicates the yuan isn't undervalued," said Tom Orlik, an economist with Stone & McCarthy Research Associates. "Now that it is rising again, it puts them in a difficult position."
The capital and financial account surplus—a measure of net capital inflows—fell in the third quarter to $5.7 billion, SAFE said in the statement, from $25.8 billion in the second quarter.
China's foreign-exchange reserves rose by $107.3 billion in the third quarter, SAFE said, excluding the effect of exchange-rate movements and asset prices. The value of the country's total international reserves, which includes foreign-exchange reserves as well as reserves held at international financial institutions, rose by $108 billion in the third quarter, it said.
Including the effect of exchange rate and asset price changes, China's foreign-exchange reserves rose by $194 billion in the third quarter to $2.648 trillion, the People's Bank of China said in October.