China’s Huge Trade Surplus with US


The article discusses the issue of huge Trade deficit between China and Usa during the International Trade meeting held recently. The Chinese defended the huge Trade surplus citing the different development stages of the two countries, and also that the Trade surplus has been declining over the years. Also that “China is a rapidly developing country with a high savings rate, while the US is a developed country with a low savings rate,”


Topics covered are Balance of Payments, Current Account Deficit, Terms of Trade , Causes and consequences of protectionism and Marshall Lerner conditions with diagrams and formulae.



Evaluation will include various strategies for tackling the current account deficits, Balance of Payments and causes and consequences of protectionism . Discuss the impact on the consumers, Domestic producers, Government and countries at large in short term and long term.