Really hard to overstate the extent to which the years after the pandemic have been marked by a shift in the global goods surplus (correctly measured, in customs) to China ... 1/x

China's neighbors have protected themselves from the second China shock with undervalued exchange rates of their own. the combined surplus of East Asia is huge ... close to 1.5 pp of WGDP, over 1.5 pp of the GDP of Asia's trade partners 2/

China's customs surplus is now 6 pp of China's GDP ... so if you are thinking of China's overall external surplus as a surplus of 2% of GDP (barely changed from 2020) something is off .. 3/

Yes, tourism generates a services deficit of around 1 pp of China's GDP, but a close to 20% of GDP positive net foreign asset position should generate a surplus of 0.5 to 0.6 pp of GDP in a simple estimate. The overall surplus shouldn't be that much below the goods surplus! 4/

& I don't think you can rule out the possibility that China's new survey based BoP methodology (lauded by the IMF as a move toward BPM6 standards ...) has been calibrated to zero out errors/ the statistical discrepancy, not to accurate estimate the true surplus! 5/5