And the U.S. call for a more market-determined exchange rate was understood, I think, as a call for China to let its currency appreciate. Technically, the current account surplus and net FDI inflows are about equal to the current pace of “hot” outflows—making it possible, in some sense, for China to borrow from the world to finance its lending to the world.But that equilibrium is fragile, and hinges on a combination of controls (on outflows) and China’s commitment to resist further yuan depreciation. Those controls aren’t prefect—errors and omissions (the “hottest” form of flight capital) are still significant, and the tourism accounts include some disguised outflows. Trading Economics members can view, download and compare data from nearly 200 countries, including more than 20 million economic indicators, exchange rates, government bond yields, stock indexes and commodity prices.

Import growth now is much weaker, and But there is little doubt that China’s surplus is now much more modest than it was prior to the global crisis.The question is whether this fall is “structural” or a function of policy.I think the answer is clear. Current Prices, NSA (If you want the story here in saving and investment terms, China would—with strong support for growth from net exports—be able to cut back on its fiscal stimulus, reducing government investment and central government dissavings.
It only stayed under 3 percent of GDP (in my view) because China changed how it measures tourism imports.
Current Account in China averaged 385.09 USD HML from 1998 until 2020, reaching an all time high of 1330.85 USD HML in the fourth quarter of 2008 and a record low of -403.15 USD HML in the first quarter of 2018.

No matter, even if it is a bit less than 45 percent of GDP, China's high level of savings makes it an outlier among the major economies. What seems more likely is that a more open financial account would lead to a more rapid reallocation of Chinese savings out of China—e.g. Take away those policies, and the yuan would likely start to move down…Outflows in the short-run tend to generate more outflows, as Chinese exporters start to expect further depreciation and hold onto the dollars they earn on their exports. The turn back toward stimulus in 2016 is the main reason, together with the partial recovery in the price of oil, why the surplus has come down in the past couple of years—not any structural change in China’s savings.It is true that China has already “aged” so to speak, and now in theory should be saving less as its already old population draws on their accumulated assets.

In 1Q19, China showed a surplus of roughly similar magnitude. That’s the kind of national savings rate that typically leads to large external surpluses.Assuming that the fall in savings leads to a current account deficit requires assuming that China, with an aging population, can sustain its current level of investment even if it cuts back—as And from a global point of view, the risks here are asymmetric. It isn’t actually clear that financial sector liberalization in the presence of pervasive implicit guarantees always produces the best outcomes, particularly when there are under-capitalized financial institutions that have an incentive to gamble for redemption. I am a bit less sure now that oil is back at But the fall in the surplus last year was not just oil. Current Account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). According to the IMF, That’s the same level of national savings as Singapore. more capital flight.And that would undermine the current, fragile, equilibrium in China’s financial account that has kept pressure for further yuan depreciation modest.Ever since the (controlled) depreciation of the yuan came to an end two years ago, China has been able to keep the yuan stable recently, and to do so Right now, China has fairly tight controls on how much money Chinese residents can take out of China.

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