Rich nations shouldn’t fear China trade surplus
The writing on the wall is clear.
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China will run a trade surplus of US$100bn this year, triple last year’s figure. China’s bilateral surplus with the US is likely to exceed US$200bn; its traditionally far lower surplus with the European Union will also venture into politically dangerous territory. The risk of protectionism is growing. What to do?
The main thing is not to panic. China’s trade surpluses are not destabilising to the developed world, in fact quite the reverse.
It is commonly noted that the big difference between China’s emergence as a trade superpower and Japan’s three decades ago is that Japan’s trade surplus resulted from the activities of domestic companies like Sony, Matsushita, Toyota and Canon. China’s trade surplus, by contrast, is largely a story of foreign multinationals. Foreign companies account for about 57 percent of China’s exports
