China’s foreign exchange reserves exceeded the mark of 3 trillion U.S. dollars for the first time at the end of March 2011, representing an increase of 24 percent from a year earlier and maintaining its top position around the world, according to data released by the central bank on April 14.
The foreign exchange reserves increased by 197 billion U.S. dollars in the first quarter.
China’s foreign exchange reserves were up by as high as 197 billion U.S. dollars in the first quarter of 2011 from 2.9 trillion U.S. dollars at the end of 2010, with 84 billion U.S. dollars in January, 60 billion U.S. dollars in February and 53 billion U.S. dollars in March.
According to the method released by the State Administration of Foreign Exchange (SAFE) for estimating the amount of “hot money,” the flow of “hot money” is a result of subtracting the trade surplus, a net inflow of foreign direct investments (FDI) and overseas investment returns of the foreign exchange reserves from the increment in the foreign exchange reserves.
China recorded 1 billion U.S. dollars of trade deficit for the first quarter and 18 billion U.S. dollars of FDI for the first two months, the combined amount of which was 180 billion U.S. dollars lower than the 197 billion U.S. dollars of the quarterly increment in the foreign exchange reserves. This marks that the aggregate amount of FDI, overseas investment returns and “hot money” reached 180 billion U.S. dollars in March.
Experts said that given the limited amount of capital inflows, the surge in the foreign exchange reserves in the first quarter was the result of too much “hot money” inflow. The speculation on further RMB appreciation is fueling the “hot money” inflow.
Furthermore, the amount of gold reserves among China’s foreign exchanges reserves remained unchanged at the end of the first quarter, standing at 34 million ounces.
&$&$By People’s Daily Online&$&$
Economically, this country of 65 million people is characterized by steady growth, strong exports and a vibrant domestic consumer market. Abundant natural resources and a skilled and cost-effective work force help attract foreign investors, and enable them to prosper and develop industry in Thailand.
Thailand has good infrastructure with modernized transportation facilities, as well as upgraded communications and IT networks that ensure optimum business and living conditions. State-of-the-art industrial estates boast sophisticated facilities and superior services.
The country’s well-defined investment policies focus on liberalization and encourage free trade. Foreign investments, especially those that contribute to the development of skills, technology and innovation are actively promoted by the government. Thailand consistently ranks among the most attractive investment locations in international surveys, and the World Bank’s 2010 Ease of Doing Business report places Thailand as the 12th easiest country in the world in which to do business.
The SET installed new Trading System to facilitate future growths in Thailand financial and stock markets
There are laws that were enacted and effective in the second half of 2008. The Demutualization of the Stock Exchange of Thailand (SET) was approved for implementation in 2009 and aims to restructure the SET organization by 2013. The Stock Exchange of Thailand (SET)’s Board of Governors approved the Demutualization of the SET group in principal. The demutualization will encourage customer’s satisfaction by promoting effective resource management, cost efficiency and maximize returns from fund-raising in the capital market. Under this plan, the SET will become a listed company on the Exchange by 2011, by which time it will have achieved its 5-year strategic targets including doubling capitalization of the cash equity market and its revenue by 2013 – with 25 percent of this income coming from new products.
The SET has replaced the Automated System for the Stock Exchange of Thailand (ASSET) with the new automated trading system named the Advanced Resilient Matching System (ARMS). This new system, which matches with those used by leading global stock market, can accommodate higher trade volumes and new products and support the planned ASEAN Linkage project. The Financial Sector Master Plan (FSMP) Phase II is expected to be implemented next year. The Financial Sector Master Plan (FSMP) Phase II, which is a five-year plan ranging from 2009-2013, will be implemented in 2009. This plan aims to reduce operating costs of financial institutions; increase competition among financial institutions and non-bank entities through expanding the business scope permitted banks and greater foreign participation; and improve market architecture with the development of limited deposit insurance and greater variety in risk-management instruments. The new plan allows greater competition in the banking industry. The plan would strengthen the banking system by lowering the NPL ratio to less than 2 percent in 5 years (2013).
Thailand’s real GDP growth in 2008 is expected to be 2.6% at the most, and 0 to 1% for 2009
International reserves stood at US$106 billion in early December 2008 compared to US$87.5 billion at end-2007. This is due to the large capital inflows in the first quarter of the year and again in the last quarter of the year. External debt is low at around US$66 billion or 30 percent of GDP, of which two-fifths are short-term debt.Three quarters of the short term debt are trade credits and inter-company loans. Public external debt (government and state-owned enterprises) make up one-fifth of total external debt and less than 1 percent of it is short-term. Overall, external debt service ratios are manageable at 6.1 percent of exports.
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Population aging in China (A1 stable) and other emerging markets in Asia will hurt economic growth, competitiveness and fiscal revenue, unless productivity gains accelerate, according to a new report by Moody’s Investors Service.(more…)
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