China’s Trade Balance with the World

China’s exports rose 4.8% and imports fell 3.4% in May from a year earlier.—cnbc.com

The 1993 Trade Deficit with the World

The last time China maintained a trade deficit with the world was in 1993.—macrotrends.net

China’s Government Sector Balance in 2024

China had a budget deficit of 7.7% of GDP in 2024.—reuters.com

Answer the following questions to check your understanding of the story.

How did China’s balance of trade with the world change during the year ended May 2025?

China’s ___________.

a) trade deficit increased

b) trade surplus increased

c) trade surplus changed to a trade deficit

d) trade surplus decreased

Why does China have a trade surplus?

China has a trade surplus because ____________.

a) China uses a crawling peg exchange rate regime

b) China has a government budget deficit

c) China saves more than it invests

d) China pays lower wage rates than most other countries

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