China has adopted the International Monetary Fund's (IMF)standards to calculate its balance of payments data, the Chinese currency regulator said on Tuesday, as authorities work to turn the yuan into a global reserve currency. The State Administration of Foreign Exchange (SAFE) said China will apply the IMF standards when calculating flows in its current account and financial and capital account from this year.
The change follows China's request to the IMF to include the yuan in the fund's Special Drawing Rights (SDR) basket, a move that would promote the yuan as a potential global reserve currency and could further increase its international usage. China wants to internationalise the yuan partly to provide an alternative to the dollar as a global currency, and in turn reduce its own vulnerability to fluctuations in the greenback.
Under the new standard, China's reserve assets will be accounted for under the financial account, and a new sub category for non-reserve assets will be added to the financial account. Other changes include different classifications for some business transactions, the regulator said. For example, value-added services will be classified under trade in services.
The new accounting standard left China with current account surplus of $78.9 billion in the first quarter, and a concomitant $78.9 billion deficit in the financial and capital account. The figures, published on the regulator's website, are subject to revisions.