China Q2 2026 BOP data show solid current account surplus

Economics Research 14 August 2026 | 8:55PM HKT

China: Q2 2026 BOP data show solid current account surplus

Bottom line: Yuting Yang | China’s preliminary Balance of Payments (BOP) data showed a solid current account Goldman Sachs (Asia) L.L.C.

surplus and a narrower capital/financial account deficit in Q2 2026. The current account surplus inched down to 3.7% of GDP in Q2 from 3.8% in Q1 (not seasonally adjusted), and FX reserves increased in Q2.

1. The preliminary BOP data show three main categories of China’s international transactions—i.e., the current account (with breakdown into various sub-categories), the capital and financial account (including the net errors and omissions, with net FDI individually reported), and reserve assets flow. In Q2 2026, the current account surplus stood at US$195bn, or 3.7% of GDP on an NSA basis, slightly lower than 3.8% of GDP in Q1 (Exhibit 2). The goods trade surplus widened and the services trade deficit narrowed modestly, while income and transfer outflows increased from Q1. As a result, the current account surplus rose in dollar terms on an NSA basis, but declined slightly as a share of GDP (Exhibit 1), partly reflecting the usual seasonality that Q2 tends to be the weakest quarter for the current account share of GDP on an NSA basis. On a seasonally adjusted basis, however, the current account surplus increased both in level terms and as a share of GDP, rising to 4.2% in Q2 from 3.7% in Q1. On a seasonally adjusted basis, however, the current account surplus increased both in level terms and as a share of GDP, rising to 4.2% in Q2 from 3.7% in Q1.

2. The capital and financial account (including net errors and omissions) showed slower net outflows. SAFE FX net receipts related to portfolio investment rose from Q1 to Q2 2026, implying that portfolio investment likely saw smaller net outflows from Q1 to Q2 2026. For example, foreign investors net bought US$1.2bn bonds in the interbank market in Q2 (vs. US$39bn bond sales in Q1). A detailed breakdown on portfolio and other investment flows will be released towards the end of September. The outflows through net direct investment were US$12bn in Q2, vs. US$9bn outflows in Q1 (Exhibit 3).

3. Reserve assets showed a US$75bn increase (higher reserves) in Q2, in comparison with the US$48bn increase in Q1. This BOP measure captures transaction flows and does not include valuation changes. By contrast, the headline FX reserves rose by US$35bn in Q2 vs Q1, suggesting around -US$40bn valuation effect in FX reserves in Q2.

4. Looking ahead, we recently raised our 2026 export volume growth forecast to 7.9% yoy from 7.2% previously and lowered our import volume growth forecast to

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4.4% from 6.8%. We also raised our import and export price growth forecasts, mainly reflecting higher energy prices and surging AI-related electronics goods/power equipment prices. Taken together, China’s goods trade surplus is likely to decrease slightly to 4.9% of GDP in 2026 (vs. 5.4% in 2025). Combining a smaller goods trade surplus with a narrower services deficit, we expect China’s overall current account surplus to decrease modestly to 3.5% of GDP in 2026 from 3.7% in 2025. For capital and financial accounts, we expect the picture of inward and outward FDI to remain similar this year vs. last year, and portfolio investment outflow to be smaller this year compared to last year. Taken together, we project China’s broad balance of payments (BBOP) to increase to 1.9% of GDP in 2026 from 1.2% in 2025, supporting our constructive view on the RMB (Exhibit 4).

Exhibit 1: Capital outflows decelerated and reserves rose in Q2 2026 Level (Bil USD) 2019 Q2 2020 Q2 2021 Q2 2022 Q2 2023Q2 2024Q2 2025Q2 2025Q3 2025Q4 2026Q1 2026Q2 Current Account Balance (a) as share of GDP (%) Trade in Goods Balance Exports Imports Trade in Services Balance - Exports Imports Income and transfer balance - Capital and Financial Account Balance* (b) - Direct Investment Portfolio Investment n.a. Other Investment - n.a.…