I like when analysts disagree about a subject. This brings balance to the article and leaves readers the opportunity to make his/her decision. My conclusion is that China these days is the same as western countries were 40-50 years ago. At that time economies were booming. People were not lavish spenders as they are today but savers. The high level of saving enabled western countries to increase production of infrastructure (roads, bridges, power plants, airports, etc.). Today's China is at a cross-road but, unlike in western countries, the leaders of China work for the future of the country, they are not working to be re-elected.
Why China's current account balance approaches zero
A country’s current account balance can be seen from different perspectives. From a trade perspective, the current account balance is positive if the sum of net exports and net income from abroad is positive. The current account balance is positive also if a country saves more than what is spent on domestic investment. The IMF’s spring edition of the World Economic Outlook projects the Chinese current account balance to be around 0.5% of GDP in 2019, enter negative territory in 2022, and stand at minus 0.2% by 2024. But during the last 15 years, the current account balance of China, the world’s manufacturing powerhouse, has been ... (full story)
- Posted: Apr 15, 2019 11:31pm
- Submitted by:Category: Fundamental AnalysisComments: 1 / Views: 1,077