As an immature debtor borrower, its trade balance and current account are also in deficit as a mature debtor borrower, its trade balance enters surplus and, as a debtor repayer, its current account moves to surplus.

(iii) 25,395,513 dollars, being the balance in the surplus account as at 31 December 1999

(iii) 15,671,000 dollars, being the balance in the surplus account as at 31 December 2003

Why, then, did local government balance sheets swing from surplus to deficit over the same period?

Rather, deficit countries need to export their way back to balance, while imports should increase in surplus countries.

To be sure, China has accumulated an enormous balance of payments surplus, which indicates that the renminbi is greatly undervalued.

The international balance of payments remains in surplus, and there is still a net capital inflow despite the global credit crunch.

China s balance in ordinary trade shifted from a surplus of 38 billion in 2005 to a deficit of 48 billion in 2010.

Improvement in the rate of implementation of programmes for 2004 was acknowledged and further reduction of the surplus fund balance was encouraged.

Indeed, if foreign owned enterprises exports are deducted from the total trade volume, the surplus vanishes, because both the overall balance of merchandise trade and the balance of trade in services normally run deficits.

Only when a country invests less in fixed assets than the amount that it saves will the surplus savings show up in the trade balance.

CAMBRIDGE China s trade balance is on course for another bumper surplus this year. Meanwhile, concern about the health of the US recovery continues to mount.

Countries can reduce their national debt by narrowing the budget deficit or achieving a primary surplus (the fiscal balance minus interest payments on outstanding debt).

As a result, balance of payments equilibrium would be reached at a certain exchange rate level, but a current account surplus (albeit smaller) would still exist.

That is how the turnaround of the economy took place by reducing the fiscal deficit and converting the external balance of payments from deficit to surplus.

As an immature creditor lender, the trade balance and current account are in surplus as well as a mature creditor lender, the trade balance returns to deficit finally, as a creditor borrower, the country s current account swings into deficit.

The overall trade balance for August 2012 was a surplus of almost 390 million for the first six months of 2012, a huge figure compared with that of 2007, which reached only 5.7 million the surplus had risen by about 425 million compared to 2006.

So the key determinant of the dollar s long term value is that it must decline enough to shift the US trade balance from today s deficit to a surplus.

A more likely scenario is that China will continue to have a trade surplus (though much smaller) and an investment income deficit, mirrored by America s trade deficit and investment income surplus. If both countries have balanced current accounts, their balance of payments positions can be sustainable.

(h) Surplus

In Spain, Portugal, and Greece, the deficit has been reduced by more than seven percentage points of GDP since 2007, and in Ireland the current account balance has swung into surplus.

This large, steady fall in the country s trade surplus makes the Chinese government hesitant to allow the RMB to appreciate significantly, for fear of the lagged impact on the trade balance.

A country can balance its trade either on a trading partner basis in which total money flows between two countries are equalized or it can balance the overall trade and money flows so that a trade deficit with one country is balanced by a trade surplus with another country.

Lacking in saving and wanting to grow, America must import surplus savings from abroad. And to attract that foreign capital, it has no choice but to run equally large balance of payments deficits.

The picture is little better in Italy, where the current account balance has swung from a surplus of around 2 of GDP to a 3 of GDP deficit over the last ten years.

China s Shrinking Trade Surplus

The End of China s Surplus

The last surplus was in 1974.

(p) Surplus due to Member States

Denmark is a net exporter of food and energy and has for a number of years had a balance of payments surplus while battling an equivalent of approximately 39 of GNP foreign debt or more than DKK 300 billion.

There is an enormous surplus of commanders.

(b) Surplus deficit position of the fund

Indeed, some Chinese authorities also maintain that renminbi appreciation would have no significant impact on China s trade balance because they believe that China s trade surplus is a reflection of excess saving and hence has nothing to do with the exchange rate.

From 2005 to 2008, China s bilateral surplus with the United States increased by 41 , and its trade surplus with Europe more than doubled.

Europe almost doubled its surplus in 2000 2003.

CAMBRIDGE China s current account surplus the combination of its trade surplus and its net income from foreign investments is the largest in the world.

Saudi Arabia also has a bilateral and multilateral surplus Americans want its oil, and Saudis want fewer US products. Even in absolute value, Saudi Arabia s multilateral merchandise surplus of 212 billion in 2008 dwarfs China s 175 billion surplus as a percentage of GDP, Saudi Arabia s current account surplus, at 11.5 of GDP, is more than twice that of China.

High domestic investment may for the time being prevent surplus savings from creating too much upward pressure on the external balance, but, given trends in China s terms of trade, growth without an increase in domestic consumption is unsustainable over the long run.

A big difference, however, was the turnaround in Germany s external balance, with annual deficits in the 1990 s swinging to a substantial surplus in recent years, thanks to its trade partners in the eurozone and, more recently, the rest of the world.

They observed that each province in British India, including Burma, had a surplus of foodgrains, and the annual surplus was 5.16 million tons (Bhatia, 1970).

Clay Shirky How cognitive surplus will change the world

This adds to the surplus by increasing firms profitability.

Germany s enormous current account surplus aggravates their problems further.

But the impact will extend beyond the surplus countries.

White Balance...