Brad Setser has been diligently cross-checking the external accounts of China. For purposes of thinking about how policymakers are trying to snatch aggregate demand across borders, the trade balance is key.
Source: Setser/CFR.
This means that as of Q2, China’s trade surplus might be as much as 50% larger than BoP statistics indicate. Note that focusing on dollar terms might be particularly misleading if export prices are falling. Import prices of goods from China have fallen about 4% since April of 2022 (through July 2024). This doesn’t seem like a big drop, but then the core PPI has risen by about 6.4% over that same period.
So, expect more stress on global imbalances…