US EditionWhat Really Drives China’s Massive Trade Surplus
3 Articles
3 Articles
What Really Drives China’s Massive Trade Surplus
China’s trade surplus is often blamed on its industrial policies. In reality, however, it reflects a persistent gap between savings and investment, driven by demographic pressures and financial constraints that shape household behavior and restrict private firms’ access to credit.
The Chinese Current Account Imbalances
The subtitle of the paper is Puzzles, Patterns, and Possible Causes. Here is the abstract: China’s large current account surplus has been an irritant to its trading partners. While industrial and trade policies often lead to sector-level imbalances, they play a relatively limited role in the economy-wide surplus. Structural factors such as an unbalanced sex… […]
China’s huge trade surplus, which reached a record $1.2 trillion in 2025, has become a central fracture line in its economic relations with other countries. As competition from Chinese imports weighs more and more on domestic industries, French President Emmanuel Macron has warned that Europe is facing a ‘Chinese tsunami’ and has called for ‘rebalancing’. Policy makers across the continent have expressed similar concerns.This pressure is unlikel…
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