China’s foreign financial assets surge by 19% to $4.1 trillion in 2010

BEIJING: China’s offshore financial assets jumped 19 percent on an annual basis to $4.126 trillion at the end of 2010, of which 71 percent are held in reserves, the State Administration of Foreign Exchange ( SAFE )) said on Monday.

According to China’s balance sheet of foreign exchange assets and liabilities, otherwise known as China’s International Investment Position , China’s portfolio investment, made up of stocks and bonds, rose 6 percent in 2010 to $257.1 billion, or 6 percent of total assets.

China’s total liabilities to foreign investors surged 20 percent to $2.3354 trillion at the end of 2010, of which 62.3 percent were in the form of foreign direct investment.

The expanding balance sheet is a result of China’s increased forays into international markets. Data showed that China only started buying stocks in its portfolio investment in 2006, after which its equity investment surged.