STRENGTHEN BOP MANAGEMENT AND SAFEGUARD NATIONAL ECONOMIC SECURITY
The current BOP statistics system was
established by referring to foreign experience after the publication of the
Regulations of Reporting the Balance of Payment Statistics by the State Council
in 1996. The core of this system is the International Transaction Reporting
System (ITRS). Many features can be found in this system-there are regulations
of reporting by the trade participants, direct reporting by the financial
institutions, and indirect reporting by non-financial enterprises and
individuals through banks; the information reported by the traders contains all
elements, and the information is processed entirely by computer; users can draw
information from the system both in pieces and in batches, and even can create
tables and charts by combining different conditions together according to their
intention.
In view of the excessively detailed items
in financial accounts, complicated trade activities and rapidly changing
transaction forms, the perfection of financial account statistics should be of
top priority. Besides, many international transactions, though not create any
fund flow themselves, are closely related with other fund flows. Therefore, it
is necessary to add other statistical methods to the currently employed ones,
which only reflect cross-border fund flow. Moreover, since the complete BOP
statistics include flux and inventory, a great deal of transnational M&A
come forth and the prices of financial assets fluctuate, formal BOP inventory
statistics should be established.
The statistical items of the international investment position should be built up as soon as possible by improving the direct investment flux statistics and securities investment statistics.
For weaker items such as tourism and direct investment, pilots should be made for the international bilateral verification and sample investigation.
All the transaction participants should improve the quality of their reports.
The technological means of data processing,
such as the integration of banks' internal business and reporting system,
should be enhanced.
The following principles of the functional design of the system should be taken into consideration. Firstly, an all-round supervision system should be set up. The targeted objects include the performance of the domestic macro economy, the situations of countries and regions influencing Chinese balance of payment remarkably, as well as the trend of global economic development. Secondly, the indicators selected should be pertinent, quite sensitive and easily acquired. Thirdly, the system should have comprehensive functions, i.e., apart from predicting and alerting, it should provide the service of data inquiry and provide references for decision-making.
In terms of structure, the whole system
should consist of different subsystems including an index system, a simulating
prediction system, a data processing system, an expert judgment system and a
countermeasure system.
Rules should be laid down for regularly publicizing, analyzing and judging the outcome of prediction and alerting. During its trial operation period, the system can first publicize the prediction report within itself, and can verify the prediction through the change in international BOP. It should be followed up by discussions and suggestions on how to improve the technologies employed.
After the formal operation of the system, the annual reports of BOP prediction will be publicized. More reports will be necessary in case of unexpected situations.
A policy pool should be made to tackle the sudden-bursting BOP crises.
To guarantee the effectiveness of the macro adjustment of BOP, the cross-department consultation system of macro policy and the regular joint meeting system should be established.
(by Hong Zhihua, Vice
Director, Balance of Payment Department, State Administration of Foreign
Exchange)