China records $39.3b surplus in capital and financial accounts

China recorded a $39.3 billion surplus in its capital and financial account in the first quarter, indicating eased capital outflows pressure, the nation's top currency regulator said on Thursday.

Surplus of financial account helped offset the pressure on China's balance of payments in the first quarter, according to the State Administration of Foreign Exchange.

During this period, the financial account surplus was $36.8 billion, compared with $126.3 billion deficits during the same period last year.

The current account registered a surplus of $18.4 billion in the first quarter, the administration said.

The forex regulator attributed the change to more rational outbound investment and increase in the flows of foreign investment.

Chinese authorities tightened inspections on cross-border M&A activities and outbound investment since December.

Enhanced regulations on cross-border business activities have gradually taken effect, according to Guan Tao, former head of the International Payments Department of the State Administration of Foreign Exchange.

He said the forex reserves face little pressure to drop in the second half this year, because the central bank does not need to use too much reserves to stabilize the exchange rate of yuan.