The Root And Trend Of China’s Surplus In Current Account And Capital Account

From1994to2011, surplus appears both in China’s current account and capitalaccount, which is referred to as the double surplus. In this paper, the history andstructural features of the double surplus are reviewed and deemed special because ofthe premature development of trade in goods. Based on the analysis of thecharacteristics of trade and FDI in China, double surplus is attributed to intra-productspecialization in the context of worldwide adjustment of industrial structure. Then,problems in China`s economy which can be reflected by double surplus arediscoursed, they are the gap between savings and investment, suppression of wages toworkers and lag of the development of financial markets. Finally, predictions ofChina’s balance of payments and policy recommendations are made.