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China's gross trade surplus is much larger than the reported net trade surplus of $594.5 billion

Discussion in 'China & Asia Pacific' started by Martian, Oct 8, 2016.

  1. Martian

    Martian Captain SENIOR MEMBER

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    China's merchandise trade surplus is larger than the nominal figure reported by the Chinese government.

    China imports a huge amount of oil at 7.9 million barrels per day.

    China's merchandise trade surplus = Chinese exports - China's imports of oil - Chinese imports of other goods

    Hence, prior to subtracting the cost of imported oil, the gross Chinese merchandise trade surplus is larger than the reported annual number of $594.5 billion.

    Chinese law states that only electric vehicles can be sold in 2025 (due to a high mileage specification and tough emission standards). Without the heavy mechanical powertrain, electric vehicles are much lighter than internal-combustion cars. This means Chinese imports of oil for transportation should decrease after 2025 and the net Chinese trade surplus will exceed $594.5 billion due to the savings of less imported oil.
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    China Trade Surplus Swells as Exports Rise in Boost for Yuan | Bloomberg

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    Last edited: Oct 8, 2016

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