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On Friday the State Administration of Foreign Exchange released the balance of payments data for the first half of 2019. As the summary table below indicates, China’s trade surplus will be roughly 3.0% of its estimated 2019 GDP, while its current...
safe.gov.cn/en/2019/0927/1…
safe.gov.cn/en/2019/0927/1…
...account surplus will come in at roughly 1.3% and net foreign inflows at 0.6%.
Trade surplus +208.4
Other current account -120.2
-Net current account surplus +88.2
-Capital account surplus ex reserves +40.6
-Change in reserves +2.4
-Errors and omissions deficit -131.2
Trade surplus +208.4
Other current account -120.2
-Net current account surplus +88.2
-Capital account surplus ex reserves +40.6
-Change in reserves +2.4
-Errors and omissions deficit -131.2
...The numbers are in billion of US dollars.
What's worrying to me is errors and omission, which amount to roughly 1.9% of GDP. By definition we don’t know what this is, but it always serves as a reasonable proxy for illegal flight capital. If Chinese are taking so much money...
What's worrying to me is errors and omission, which amount to roughly 1.9% of GDP. By definition we don’t know what this is, but it always serves as a reasonable proxy for illegal flight capital. If Chinese are taking so much money...
...out illegally, it is probably safe to assume that the trade and current account surpluses are even higher than reported but have been reduced by disguised flight capital (e.g. over-invoicing imports, under-invoicing exports, overstating travel and tourist expenses)....
...The implication is that China’s net capital account is really in deficit, with more money leaving the country than entering by anywhere from 1.3 to 2.3%, or more, of GDP.
