China revises down third-quarter capital account deficit

BEIJING Wed Dec 26, 2012 4:07am EST

BEIJING (Reuters) - China posted a $51.7 billion deficit in its capital and financial account in the third quarter, official data showed on Wednesday, a downward revision to the preliminary $70.8 billion reported in October.

The finalized deficit, reported by the State Administration of Foreign Exchange (SAFE) on its website www.safe.gov.cn, nevertheless marks a second straight shortfall that will likely play on investor jitters over short-term capital flight.

China had a capital account deficit of $41.2 billion in the second quarter and a current account surplus of $53.7 billion, leaving a small balance of payments surplus.

There are signs that some investors are pulling short-term funds from the world's second-largest economy amid a global economic downturn, but Chinese officials have played down the risk of capital flight.

SAFE has attributed the capital account deficit to increased dollar deposits held by Chinese firms, or more dollar purchases for their outbound investment.

Such a trend was driven by the yuan's brief depreciation from late last year through late July. But the yuan has regained steam since then as the dollar has weakened broadly and as signs grow that China's economy is stabilizing.

China's current account surplus was $70.8 billion in the third quarter, SAFE said, up slightly from a preliminary calculation of $70.6 billion.

For the first nine months, China's current account surplus amounted to $148 billion while its capital and financial account deficit was $36.8 billion, SAFE said.

(Reporting by Kevin Yao; Editing by Nick Edwards)

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