China’s current account surplus in 2018 plunged 70% year-on-year to a record low of $49.1 billion, according to the country’s foreign exchange regulator.

It was widely speculated that China might book its first full-year current account deficit in 25 years after it ran a deficit of $28.8 billion in the first half. Following small surpluses in the second and third quarters, robust surplus growth in the fourth quarter backed by strong exports resulted in the narrow surplus, according to the State Administration of Foreign Exchange (SAFE) on Friday.

The current account measures a country’s total trade in goods and services plus earnings on cross-border investments. China’s 2018 surplus was equivalent to 0.39% of GDP, the first time the reading has dropped below 1%, according to SAFE.

China’s current account surplus expanded since 1993 and peaked at $420.6 billion in 2008. The surplus has since continued narrowing as the surplus of goods trade shrank and services trade expanded.

Central bank governor Yi Gang said late last year that China has never pursued a current account surplus, and the shrinking share of the surplus in GDP is an indicator that economic growth has relied more on internal demand.

Analysts said China’s current account is very likely to book an annual deficit in 2019 as exports are hit by the trade war with United States. They said a deficit means China’s balance of payments is moving more toward equilibrium.

But the narrowing current account surplus fueled concerns that it might erode an important source of stability for the yuan, as large surpluses have meant a steady flow of capital into China, giving the People’s Bank of China a war chest of foreign-exchange reserves.

China's cross-border capital flow remained generally stable, and the international balance of payments was also at equilibrium, the administration said.

Related: Caixin View: What the End of 25 Years of Current Account Surpluses Means for the Yuan