China’s Current Account: External Rebalancing or Capital Flight?

Abstract

This paper examines an anomaly in China's current account: its large and rapidly growing travel expenditure. Drawing evidence from counterparty data, Chinese international arrival statistics, and gravity equation models extended to travel trade, I find that a significant amount of China's travel spending in the period 2014-2016 could not be explained by accounting factors or economic fundamentals. The unexplained travel imports are inversely associated with domestic growth and positively associated with renminbi depreciation expectations against the dollar, suggesting that they are less likely to be consumption of goods and services abroad than domestic residents' acquisition of foreign financial assets. Adjusted for these potential disguised outflows, China's current account balance could be higher than reported by around 1 percent of GDP in 2015 and 2016, a period when the Chinese economy slowed noticeably as it shifted away from investment-driven growth (i.e. "internal rebalancing"). These results suggest that Chinese households, through the travel channel, have in part replaced the official sector in directing domestic surplus savings abroad in recent years. While the official sector preferred liquid foreign government assets, Chinese households appear to prefer private foreign assets.JEL Classifications: F32, F21, F14, G15

16. Pulping Processes

“…Very good pulp characteristics were reported for AQ-catalyzed neutral sulfite and semi-alkaline sulfite processes (NS-AQ, SAS-AQ) applied to pine and spruce wood (Virkola et al , 1981Raubenheimer, Eggers 1980;Anonymous 1980b;Wong 1981).…”

“…The sodium recovery was a drawback of this base as compared to magnesium, but there are several commercial recovery systems available today (Wong 1980(Wong , 1981. Furthermore it is quite easy to prepare the pulping liquors, usually by starting with sodium hydroxide in solution or less frequently with solid sodium carbonate.…”

“…with sodium as the predominant base, but recently considerable interest has arisen in the AQ-catalyzed neutral sulfite process (NS-AQ), applying cooking pH values between 8 and 10 (Wong 1981). with sodium as the predominant base, but recently considerable interest has arisen in the AQ-catalyzed neutral sulfite process (NS-AQ), applying cooking pH values between 8 and 10 (Wong 1981).…”

“…This is especially noticeable because the good strength properties are obtained in combination with high yields of 48-52% for bleached pulps (Virkola et al 1981;Wong 1981). This is especially noticeable because the good strength properties are obtained in combination with high yields of 48-52% for bleached pulps (Virkola et al 1981;Wong 1981).…”

The Drivers, Implications and Outlook for China’s Shrinking Current Account Surplus

“…Achieving a lasting external balance would thus require that the gradual reining in of expansionary macroeconomic policies be accompanied by structural reforms (for example, regarding the measurement of the tourism balance (see Wong, 2017), with some observers opining that Chinese tourist spending is overestimated (and indeed, foreign tourist spending in China is underestimated) and reflects disguised capital outflows, the trend is undeniable. It is also borne out by an almost fourfold increase in the number of Chinese outbound visitors -from 46mn in 2008 to 162mn in 2018.…”