In 2007, China’s current account surplus (= net capital exports) peaked, as a share of GDP, reaching 10% of GDP. In dollar terms, the surplus peaked in 2008 at more than USD 410 bn. By contrast, the US, the world’s largest net capital importer, saw its deficit peak in 2006 at USD 800 bn. Remarkably, China’s share of global net capital exports has just about halved since 2009, declining from 24% to 12% in 2011. By contrast, German and, somewhat less so, Japanese net capital exports have more or less remained the same as a share of global flows (generally around 12%). Germany overtook China in 2011 to become the world’s largest net capital exporter, but it looks like China will narrowly reclaim the number one spot this year. According to the IMF, though the IMF has gotten its projections badly wrong before, China’s current account surplus will increase over the next few years and exceed USD 550 bn in 2017, while the US deficit will widen and reach almost USD 700 bn 2017. By contrast, German and Japanese surplus will hover in the USD 120-160 bn range. What is clear, however, is that, barring tail risk, China, Germany and Japan will remain the world’s largest surplus countries, and the US will remain the world’s largest deficit country.
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| Source; IMF |