Building a Modern Statistical System on the Balance of Payments

In the early 1980s，China began to build a statistical system on the balance of payments，which is an important part of the reform of foreign exchange administration system and an elemental work of foreign exchange administration. Under the leadership of the Communist Party of China (CPC)，the SAFE has continued to develop a high-level statistical system on the balance of payments with the guiding principles of "taking legal thinking as the core，advanced statistical systems and methods as the basis，modern information technologies as the support，and high-quality statistical data as products".

Statistical system on the balance of payments was set up in the reform and opening up

In 1978，the Third Plenary Session of the 11th CPC Central Committee sounded the clarion call for China's reform and opening up. A demand for foreign-related statistics was generated in participating in the global economy. In 1980，China officially resumed its seat in the International Monetary Fund (IMF).

As a member state，China is required to fulfill its commitment to transparency in statistics on the balance of payments. In 1981，the SAFE formulated China's first statistical system on the balance of payments in accordance with the internationally accepted statistical standards and China's actual economic situation. The compilation of China's statistics on the balance of payments was based on the sectorial administration records of the Customs，the Ministry of Economy and Trade，the Ministry of Finance，the National Tourism Administration and other national administrative departments. In 1982，the SAFE officially began to compile China's Balance of Payments on an annual basis. In September 1985，it issued Overview of China’s Balance of Payments 1982-1984 for the first time，giving an overview of China's foreign-related economy and laying a foundation for the development of statistics on the balance of payments.

Constantly building a high-level statistical system on the balance of payments

Under the leadership of the CPC，the SAFE has continued to consolidate the foundation of the statistical system on the balance of payments and enriched the statistical products. It has improved the frequency of statistical data release，and strictly controlled the data quality. It has also increased the transparency of statistics on the balance of payments，and deepened the reform of statistical methods. Additionally，it has involved itself in international statistical cooperation and governance. To sum up，it has made continuous efforts to create a high-level statistical system on the balance of payments.

First，consolidating the foundation of the statistical system on the balance of payments. In 1992，the 14th CPC National Congress called on the whole Party to seize the opportunity for development with the focus on economic growth. In order to improve the foreign-related statistical work and comprehensively reflect the foreign-related economic behaviors of market entities in China，the SAFE formulated the Measures for the Declaration of Statistics on the Balance of Payments (hereinafter referred to as "Measures") in 1995，which was officially implemented in 1996 after the approval of the State Council，laying a foundation for China's statistical system on the balance of payments. From 1996 to 1997，the SAFE successively set up systems such as indirect declaration through domestic banks，declaration of external assets and liabilities as well as profits and losses of financial institutions，declaration of exchange statistics，declaration of direct investment，and declaration of portfolio investment，which initially formed the statistical system on the balance of payments in China. In 2013，with the State Council's revision of the Measures as a new starting point，the SAFE accelerated the construction of the statistical system on the balance of payments consisting of three pillars: direct declaration，indirect declaration and special investigation. Following international standards，China's statistical system on the balance of payments combines comprehensive statistics and key investigations，and covers all types of reporting entities. It goes in the direction of improvement of data collection efficiency and reduction of declaration burden.

Second，enriching statistical products on the balance of payments. In 2002，the 16th CPC National Congress put forward the goal of accelerating economic growth and economic system reform，and building a moderately prosperous society in all respects. In order to improve the value in use of data and allow data to play a role in productivity，the SAFE has diversified the statistical products on the balance of payments. In 2006，China's International Investment Position (at the end of 2004 and 2005) was first published，which was a complete release of our external statistics，hailed by the IMF as a "landmark event". In 2012，the data on the direct investment flow and stock of financial institutions was released，presenting a series of changes of Chinese financial institutions in "going out" and "bringing in". In 2014，the monthly data on China's international trade in services was released，giving a picture of the development in this field. In 2015，the monthly data on trade in goods based on the balance of payments statistical scope was released. In 2015，China began to submit the data on Coordinated Portfolio Investment Survey (CPIS) to the IMF. In 2016，the data on portfolio investment assets of more than 200 countries and regions worldwide was released on a semi-annual basis. In the same year，the Bank for International Settlements (BIS) announced that China had officially become Locational Banking Statistics (LBS) reporting country，and China began to release the data on its external financial assets and liabilities in the banking sector. In addition，the SAFE began to publish China's Balance of Payments since 2005，providing a professional interpretation on the balance of payments situation in China. The publishment of these multi-dimensional and high-quality statistical products on the balance of payments presents China's foreign-related economic performance to the public from different perspectives.

Third，increasing the frequency of releasing statistics on the balance of payments. The Balance of Payments was published by the SAFE annually from 1982 to 2000，semi-annually since 2001，and quarterly since 2010. In addition，since August 2009，the SAFE began to release the preliminary data on China's Balance of Payments for the first half of the year with a delay of two months after the quarter，and the final data on China's Balance of Payments for each quarter with a delay of four months after the quarter. Later，the delay in the release of the preliminary and final data on the Balance of Payments was shortened to 40 days and 3 months after the quarter，respectively. The International Investment Position was released by the SAFE annually from 2006 to 2010，and quarterly since 2011. In addition，the SAFE published the release schedule of the Balance of Payments and related data for the first time in 2012，so as to inform the public of the timetable for data release.

Fourth，strictly controlling the quality of statistics on the balance of payments. Regarding statistical skills，the SAFE introduced the internationally accepted data correction mechanism in 2010，and the release of the Balance of Payments was changed from one to three times，namely，the preliminary data，the final data and the revised data. Accordingly，the release of the International Investment Position was changed from once to twice，namely，the final data and revised data. The Balance of Payments and International Investment Position for each quarter of the previous year are revised when the two documents for the fourth quarter and the whole year of the current year are published. In 2012，the SAFE began to release the Balance of Payments for each quarter instead of the annual cumulative data on the Balance of Payments on a quarterly basis. Meanwhile，it traced and published the time-series data on the Balance of Payments for each quarter since 1998 for the first time to facilitate the public's analysis and use of the statistical data. With the emphasis on both quality and speed，the statistics on the balance of payments is committed to presenting more accurate data to users at a faster rate.

Fifth，improving the transparency of statistics on the balance of payments. In 2002，China entered the General Data Dissemination System (GDDS) of the IMF，which is a "statistical access to the WTO". In 2012，the report at the 18th CPC National Congress proposed to "promote all-around improvements to China's open economy"，and put forward higher requirements for statistics on the balance of payments，an important indicator for the level of the open economy. In 2014，at the ninth Group of Twenty (G20) Leaders's Summit，President Xi Jinping announced that China would adopt the Special Data Dissemination System (SDDS) of the IMF，turning China into one of the few developing countries eligible to participate in the standard. In 2016，with the accession to the CPIS and LBS，China completely filled the data gap in the first phase of the initiative signed by G20，marking a new development stage of China's statistics on the balance of payments. By the end of 2021，China will bridge the data gap in the second phase of the G20 initiative to improve the transparency of China's statistics on the balance of payments to the international advanced level.

Sixth，making solid progress in the reform of statistical methods for the balance of payments. As the forms of foreign transactions continue to diversify，it is difficult to meet the needs of statistics on the balance of payments with the capital flow information of the indirect declaration on the cash basis. In 2020，the SAFE proactively carried out the transformation of enterprise data source，collecting directly from enterprises the data on foreign-related transactions and assets and liabilities on the accrual basis. This has facilitated the balance record of "trade" and "assets and liabilities" as well as "debit" and "credit"，and reduced net errors and omissions，thus improving the quality of statistics on the balance of payments fundamentally.

Seventh，making full use of technology to enhance data quality. By establishing an information system and a digital statistical monitoring system，the SAFE has realized the electronic operation of the whole process of collection，verification and processing of the statistical data on the balance of payments. On this basis，the SAFE has continuously improved the functions of the statistical system to facilitate the foreign exchange transactions. At present，the reporting entities can declare the data either through the system connecting banks with the SAFE，or by themselves through the Internet，which is convenient and quick to operate. The SAFE can verify the declared data through the built-in verification rules of the system to ensure the accuracy of the data. The declared data is collected and processed by the information system to form statistical products that are regularly released to the public.

Eighth，taking an active part in international statistical cooperation and governance. When presiding over the 27th Collective Study Session of the Politburo of the CPC Central Committee，General Secretary Xi Jinping pointed out that，with increasing global challenges，it is a prevailing trend to strengthen global governance and advance the reform of the global governance system. The rules of statistics on the balance of payments are an important part of the global statistical governance system. As early as 2005，the SAFE dispatched statistical experts to sit on the Committee on Balance of Payments Statistics，starting to make the voice of China heard in the global statistical governance system. Later，as China's opening up continues to expand with new technologies，industries，forms and patterns emerging endlessly，China has actively participated in the formulation of international statistical rules，including the revision of the Balance of Payments and International Investment Position Manual，and continued to convey China's voice and propose China’s plans in the process of formulating new rules for statistics on the balance of payments.

Continuously developing a modern statistical system on the balance of payments

As a significant part of the statistics on the four major national economic accounts，the statistics on the balance of payments can reflect the development and changes in China's foreign-related economy，casting a light on the macroeconomic decision-making. The CPC Central Committee has always attached great importance to the statistical work: the 19th CPC National Congress proposed to "improve the statistical system"，and the Fifth Plenary Session of the 19th CPC Central Committee made important decisions to "actively participate in the reform of the global economic governance system" and "advance the modernization reform of statistics"，putting forward new and higher requirements for statistics on the balance of payments in the new era.

Going forward，under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era，the statistical department of the balance of payments will earnestly implement the decisions and arrangements of the CPC Central Committee and the State Council，and continue to develop a modern statistical system on the balance of payments in the following aspects: first，continuing to improve the statistical system on the balance of payments，and improving the quality and timeliness of statistical data by integrating the general standards of international statistics with the unique experience of China's practice. Second，improving the transparency of data to show an overall picture of China's foreign-related economy from multiple perspectives and deep level; third，strengthening the publicity of statistics on the balance of payments，fostering the foreign-related transaction entities' awareness of declaration，and closing the distance between the statistical system and the declaration entities，so as to reduce the burden and increase the efficiency of the statistical work; fourth，taking an active part in making international statistical rules，improving China's statistical capability，enhancing China's voice in building the international statistical system on the balance of payments and showing an image of a responsible major country.

The author is the Deputy Director-general of SAFE's Balance of Payments Department