China's Net Creditor Status And Its Sustainability

From 90s, the current account of China have been in successive surplus and got a net investment position surplus. The abundant FDI inflows drive people's attention to the double surplus but neglect the truth that China has been a net capital-exporting country. In this way, China accumulates its claims and be a net creditor.Teoretical and practical methods have been introduced to analyze the Net Creditor status of China, what influences hide behind it, its sustainability and effectiveness. China is a developing country but turns to be a Creditor has been considered in this paper. Researching its sustainability and effectiveness, we find its truth by penetrating the facts. This paper shows its new ideas here.First, an introduction of the researches about this problem has been outlined and refers to the innovation. Then, analyzing the changing rules of China's balance of payments, we find that China turned out to be a creditor during nineteen ninetieth. But this kind of creditor is particular. It turned out to be an official creditor. On the same time, we compared the balance of payment structure of China, Japan and Singapore. And we find that the net creditor have never brought invest income surplus. The real fact is China's official creditor status.Third, if China's balance of payment structure can keep its sustainability is emphasized in this paper. The model analysis shows that although our country's balance of payment structure turns to be sustainable, it can't be like this in the long run. The model in this paper has never been introduced to research the sustainability of China's net creditor. So its analyzing methods have some innovation.Then, the effectiveness of China's net foreign assets is emphasized on studying the problem. Relative models used in foreign literatures have been introduced to estimate China's real net international investment position. The results show that China's real net international investment position should be negative in consistent with its developing. What's more, the majority part of China's foreign claims is reserve. This has brought on many problems. The analysis shows that the net creditor of China is not sustainable.At last, some advises such as perfect the save-invest transformation mechanism, develop China's direct investment in other countries have been mentioned. Also some imperfections have been referred to.