BEIJING—China's first-quarter current account surplus, the broadest measure of its trade balance with the outside world, fell 18% to $29.8 billion from a year earlier, the State Administration of Foreign Exchange (SAFE) said in a statement on Tuesday.
The first-quarter current account surplus was also sharply lower than the $102.1 billion surplus in the fourth quarter. On April 1, China revised its estimate of the 2010 current account surplus to $305.4 billion, from the previous estimate of $306.2 billion.
The current account surplus includes certain payments, such as interest payments on bonds and other investments, that aren't included in the trade surplus. It is the preferred tool among economists for measuring a country's total trade balance.
The narrowing of the current account surplus in the first quarter may alleviate concerns over China's external imbalances. Although China recorded a trade deficit of $1.02 billion in the first-quarter, its first quarterly deficit in seven years, economists expect it will soon return to posting monthly trade surpluses and have a significant trade surplus for the full year.
The capital and financial account surplus—a measure of net capital inflows—was $111.4 billion in the first quarter, up from $61.2 billion a year earlier, but down from $118.9 billion in the fourth quarter.
Economists say that while China's "twin surpluses" in the current account and capital account, an indication of total money inflows into the economy, were narrower in the first quarter, they still put pressure on the country to allow faster yuan appreciation to slow the influx of funds. The addition to money supply also increases inflation pressures in the domestic economy.
China acquired $138.0 billion of foreign-exchange reserves in the first quarter, excluding the effects of changes in exchange rates and asset prices, SAFE said.
Earlier data released by the People's Bank of China, which does include the effects of exchange-rate and asset price changes, showed that the country's foreign-exchange reserves rose by $197.4 billion in the first quarter.
The data are preliminary and subject to revision.—Yajun Zhang and Eliot Gao