China's current account surplus hit US$162.9 billion in the first half, up from about US$90 billion in the same period of last year, the State Administration of Foreign Exchange (SAFE) announced on Wednesday.

Meanwhile, the nation saw its capital and financial account surplus hit US$90.2 billion, more than doubling the US$38.9-billion surplus for the corresponding period of last year.

An SAFE official attributed the surplus to high depositary rate which further widened the gap between deposits and investment and soaring fixed assets investment which boosted the country's manufacturing capacity.

"China's booming economy has consolidated foreign investors' confidence which resulted in surging foreign direct investment into the country," said an SAFE official.

The official said strong demand in the international market and sluggish growth of domestic demand contributed to the rising surplus.

In order to evade government's policy to curb export by cutting rebate and adjusting tax, many manufacturers hurried to export more before the policy takes effect in the latter half of the year.
Meanwhile, the country's sizzling stock market and real estate industry brought in more capital, the spokesman said.

Chinese financial institutions such as commercial banks cut down on their investment in foreign securities markets in response to yuan appreciation and the growing domestics credit demand, which reduced the outward capital flow.

China will deepen reform in foreign exchange regulation, further lift restraints on capital outflow, strengthen the supervision of cross-border capital flow, and gradually make the yuan convertible under the capital account, said the spokesman.