Why a country is an exporter of capital when it has a trade surplus

If there is to have a current account surplus, it must be a capital importing country. This is the explanation of Yu Yongding, a member of the Chinese Academy of Social Sciences, in "China's Exchange Rate Policy and Overseas Net Assets".

Theoretically, that is, more commonly, under normal circumstances, when a developing country enters the take-off phase, savings are less than investment, ** and investment income are in deficit, at this time the current account deficit, and the capital account surplus. This is the case with the historical development of Japan and Thailand.

China is a special case, that is, it has been in a double surplus of current account and capital account for a long time – China is not a capital importer in theory, but a net exporter of capital for a long time.

China is a special case in the application of many economic theories or models, and it is important to distinguish between the "general situation" and the "China situation".

Whoever said that China is not an exporter of capital.

A surplus is one in which a country's total exports are greater than its total imports in a given year. The size of the surplus largely reflects a country's external activity in a given year.

There are many reasons for the surplus, such as the production capacity of a country's products, the international competitiveness of products, the structure of export products, and so on. Taking China as an example, the main reasons for China's large surplus in recent years are:

First, economic globalization has made the economies of various countries more closely linked than in the past, and goods and services are flowing more and more freely between countries, which provides the possibility and conditions for promoting China's rapid growth.

Second, our supply capacity is relatively strong. In recent years, the rapid growth of domestic investment, as well as the rapid growth of foreign direct investment brought about by the international division of labor, China's production capacity has been greatly enhanced, and a strong industrial chain has been formed.

Third, the international market has a relatively large demand for goods produced in China. Restricted by the overall level of economic development, labor-intensive is still the basic feature of China's current production, and the European Union, the United States, Japan, etc., which are the largest in China, are characterized by an economic structure with high technological content, which has a strong complementarity with China's economy, which determines that the international market has a relatively large demand for goods and services produced in China.

Fourth, China's production cost is relatively low, which determines that China's products have strong competitiveness in the international market. According to the data of international organizations, the current labor cost of China's manufacturing industry is only equivalent to 20%-30% of that of developed countries, 50%-60% of the Asian tigers, and about 50% of the Asian tigers.

In addition, in recent years, the world economy has grown relatively fast, and the world economy is very large, which has also amplified the amount of surplus.

In short, the total amount of exports is greater than the total amount of imports. But a large part of China's surplus is inflated.

When a country has a surplus, the country's economy will inevitably be affected, for the people's livelihood is inflation, that is, the price of goods, the grip is the depreciation of the money in our hands now, the same amount of money can not buy the same amount of things.

When a country has a short-term trade surplus, then this is just a normal phenomenon, which does not have much impact on a country, and the country's internal economic development will not be greatly affected, it will only maintain a normal trajectory of development.

But when the country has a long-term surplus, this phenomenon will have a great impact on the world, both internationally and domestically, and these effects will be repeated and repeated. First of all, in the international aspect, a country's long-term surplus with foreign countries will hurt the interests of these countries, and over time, these countries will have the intention of not wanting to cooperate, which in turn will affect the country's internal economic development. The direct impact of the country's surplus on the country's internal economy is first of all filial piety or directly promote the rapid development of the country's internal economy, but the long-term rapid development may lead to the imbalance of the country's economic development, (because a country's external ** projects are limited after all, the rapid development of these projects will maximize its interests, which will lead to the saturation of these projects, and eventually make it full or **), on the contrary, the country's other industries will lose a lot of development opportunities, This leads to atrophy.

**Surplus, when exports are greater than imports, is equivalent to the debt of a foreign country to the country. When a foreign country borrows money from its own country, the demand for its own currency increases, and so does the amount of co-supply.