Chinese tourists help reduce trade imbalance

​China’s current account surplus in the first half of this year amounted to $99 billion (2 % of GDP). The massive $229 billion surplus in goods trade was offset by a $117 billion services trade deficit. Other current account categories (factor income and current transfers) showed a deficit of $13 billion.

The total goods trade surplus for the past twelve months was $544 billion in August and the services trade deficit $227 billion. Nearly all of the services trade deficit ($211 billion) was generated by travel abroad. In the past 12-months, Chinese travellers spent $319 billion (up 35 % y-o-y) outside the country. International travellers visiting China spent $108 billion. However, questions have been raised whether travel spending has become a way to circumvent capital controls, i.e. part of increase in Chinese spending abroad is just capital outflows. According to China’s tourism administration, the number of Chinese travelling abroad increased 4 % y-o-y in 1H16.

China’s current account

Source: Macrobond.