Banking

China's current-account surplus in the third quarter more than doubled from a year earlier, its foreign-exchange regulator said Thursday, indicating the country still faces challenges in rebalancing the economy away from a reliance on external demand.

The current-account surplus—the broadest measure of China's trade balance with the outside world—was $102.3 billion in the third quarter, the State Administration of Foreign Exchange said in a statement.

In the second quarter the surplus was $72.9 billion, up 35% from a year earlier, which was a sharp rebound from the first quarter, when it fell 32% from a year earlier.

China again tried to drain cash from its banking system, increasing banks' reserve requirements for a second time in as many weeks in its intensifying push to rein in inflation.

The Friday move by the central bank, the fifth this year, follows a Wednesday announcement by the State Council, the executive arm of China's government, of several measures—including price controls if necessary—aimed at containing food and commodity prices. It also comes on the heels of a rise in the so-called reserve-requirement ratio just last week, on Nov. 10, and last month's hike in benchmark interest rates, which was the first in nearly three years.

The move comes as the U.S. shows increasing impatience with China's economic policies; U.S. Federal Reserve Chairman Ben Bernanke on Friday argued that China and other emerging markets threaten the global recovery by keeping their currencies weak and allowing their economies to overheat.

China's yuan should be "immediately" included in the special drawing rights (SDR) basket of the International Monetary Fund (IMF), a top Chinese banker said on Tuesday, adding that the greater status of the yuan will help stabilize the global financial system.

"The IMF should put the yuan in the SDR basket immediately," said Guo Shuqing, chairman of China Construction Bank, the world's second-largest lender by market value, and former head of the country's foreign exchange regulator.

Guo said that overseas central banks, including those in the European Union, Japan and the United States, should hold a certain amount of yuan as currency reserves through agreement with China.

A day after a Chinese agency downgraded U.S. sovereign debt Moody’s announces that it has raised China’s debt rating.

Moody’s Investors Service increased China’s debt rating to Aa3 from A1 with a positive outlook. Moody’s cited China’s financial strength and ability to contain losses from a credit boom.

Moody’s also based the upgrade on the lack of erosion in central government financial credit fundamentals and the strength of China’s external payments position.

China’s capital controls will help to stem destabilizing capital inflows, and the trade and currency regime tensions between China and the U.S. will be constructively managed, Moody’s said.