An End to China’s Imbalances?

By Ashvin Ahuja, Nigel A Chalk, Nathan Porter, Papa M N'Diaye, Malhar S Nabar

April 1, 2012

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Ashvin Ahuja, Nigel A Chalk, Nathan Porter, Papa M N'Diaye, and Malhar S Nabar. An End to China’s Imbalances?, (USA: International Monetary Fund, 2012) accessed April 5, 2025

Also available in: 中文

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Global imbalances have been a central theme of the international economic policy debate for much of the last decade, prompted by large and sustained current account deficits in the U.S. and counterpart surpluses in China, Germany, and among many of the oil producers. This paper focuses on the current state of the external imbalance in China, examining the factors underlying the post-2008 drop in China’s current account surplus and analyzing the prospects for the external surplus going forward. The paper finds that China’s current account surplus should remain modest in the coming years. However, despite the fact that China’s medium-term current account is likely to stay below its pre-crisis range, it is too early to conclude that "rebalancing" has been truly achieved in China. While imbalances do not currently seem to be manifesting themselves as a feature of China’s external accounts, the evidence increasingly points to a rising domestic imbalance as growth becomes increasingly dependent on very high levels of investment.

Subject: Balance of payments, Current account, Current account surpluses, Exports, Foreign exchange, International trade, Real effective exchange rates, Terms of trade

Keywords: China, China terms of trade, Current Account, Current account surplus, Current account surpluses, Export mix, Exports, Factor input, Factor market distortion, GDP, Global, Global Imbalances, Market share, Real effective exchange rates, Surplus, Terms of trade, Trade performance, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/100
Stock No:

WPIEA2012100
ISBN:

9781475502909
ISSN:

1018-5941

Notes

Also available in Chinese

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