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Democracy & Technology Blog China’s trade DEFICIT

China today announced a large $102 billion trade surplus for 2005, triple last year’s total. But wait. Excluding its $114.7 billion trade deficit with the United States alone, China actually ran a modest trade deficit of almost $13 billion with the rest of the world. We’ve been predicting this development all year. China’s consumption of consumer and capital goods is growing fast. According to a recent “economic census,” the nation’s first ever, its domestic services economy is one-third larger than previously thought and accounts for over 40 percent of GDP. These numbers are just one more factor showing that China has not been “manipulating” its currency, the yuan, to gain unfair advantage in international markets via a singular focus on manufacturing exports.
-Bret Swanson

Bret Swanson

Bret Swanson is a Senior Fellow at Seattle's Discovery Institute, where he researches technology and economics and contributes to the Disco-Tech blog. He is currently writing a book on the abundance of the world economy, focusing on the Chinese boom and developing a new concept linking economics and information theory. Swanson writes frequently for the editorial page of The Wall Street Journal on topics ranging from broadband communications to monetary policy.