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

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

China breaks Crowther s mold. Given that it has been running an investment income deficit, a trade surplus, and current account surplus, it seems that it should be classified as a debtor repayer.

Germany had a current account surplus of 2.1 of GDP at the time, while Japan s was 4.4 . In 2008, the Japanese surplus was 3.2 of GDP, Germany s was 6.7 , and China s was 9.8 .

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.

This argument is correct in the sense that it is the current account surplus or deficit of a monetary union as a whole that can be expected to have exchange rate implications. And, unlike China, Germany no longer has a national exchange rate that can adjust in response to its current account surplus.

So why, if China was still running a decent current account surplus and a long term capital surplus, did the RMB suddenly depreciate, forcing the PBoC to intervene (though not very vigorously) to prevent it from falling further?

Even more significant, shifting income from state owned enterprises to middle class workers and increasing consumer spending will reduce China s enormous saving rate. Since a country s current account surplus is the difference between its national saving and its national investment, China s current account surplus is likely to continue to shrink in the coming years.

The European Union, however, has built up a large external surplus, owing mainly to positive trade balances in the eurozone. The EU s current account surplus in 2014, at around 250 billion, will be even higher than that of emerging Asia.

Developing countries in the aggregate were running a large current account surplus in 2004, equivalent to 2 per cent of their gross domestic product (GDP).

(d) when the proceeds from the sale of surplus equipment shall be credited to the relevant programme account, provided that it has not been closed

Finally, there is the need for effective international cooperation. China s current account surplus has declined, but now northern Europe runs a 500 billion surplus, while demand in southern Europe is collapsing and the US is running a deficit that is close to 500 billion.

(h) Surplus

The combination of high corporate saving and low business investment has sustained the current account surplus, allowing Japan to fund its budget deficit domestically. But the surplus has fallen sharply in the past five years, from roughly 6 of GDP in 2007 to only 1 now.

In the short run, the US current account deficit will remain, regardless of which country runs bilateral surpluses. Thus, China s continued reinvestment of its current account surplus in US government securities is of utmost important for US growth and financial stability.

Perhaps the most notable consequence of Spain s recent reform efforts is its current account surplus the country s first in more than two decades. At the peak of the crisis, Spain s current account deficit amounted to an unprecedented 10 of GDP.

(a) Credits to Member States resulting from transfers made in 1959 and 1960 from the surplus account to the Working Capital Fund in an adjusted amount of 1,025,092 dollars

(a) Credits to Member States resulting from transfers made in 1959 and 1960 from the surplus account to the Working Capital Fund in an adjusted amount of 1,025,092 dollars

(a) Credits to Member States resulting from transfers made in 1959 and 1960 from the surplus account to the Working Capital Fund in an adjusted amount of 1,025,092 dollars

In a global economy with deficient aggregate demand, current account surpluses are a problem. But China s current account surplus is actually less than the combined figure for Japan and Germany as a percentage of GDP, it is 5 , compared to Germany s 5.2 .

China s Shrinking Trade Surplus

I call it cognitive surplus.

Differences among the eurozone countries in growth rates of productivity and wages will continue to cause disparities in international competitiveness, resulting in trade and current account imbalances. Germany now has a current account surplus of about 215 billion a year, while the rest of the eurozone is running a current account deficit of about 140 billion.

Overall, China s trade surplus has decreased by 36 in absolute US dollar terms, and has dropped by more than half (53 ) in proportion to GDP over the past two years. So the ratio of China s current account surplus to GDP is down to 4.6 , significantly below the recent peak of 11.3 , reached in 2007.

In response, current account balances the Achilles heel of the so called East Asian growth miracle went from deficit to surplus. For the ASEAN 5, current account deficits averaging 4 of GDP in 1996 97 swung dramatically into average surpluses of 6.8 of GDP in 1998 99.

Depending on the position of each account, the write off would eventually lead to an increase in future assessments or a reduction of the surplus that would prospectively be returned to Member States.

China has run a capital account surplus for most of the last 30 years, and a trade surplus every year since 1993. The PBOC keeps the exchange rate stable by intervening heavily in the foreign exchange market, creating so much liquidity that the authorities must engage in massive sterilization to avoid overshooting the targeted increase in the monetary base.

(p) Surplus due to Member States

For the ASEAN 5, current account deficits averaging 4 of GDP in 1996 97 swung dramatically into average surpluses of 6.8 of GDP in 1998 99. A similar transformation occurred in South Korea, where a 2.8 current account deficit in 1996 1997 became an 8.6 surplus in 1998 1999.

That's the second half of cognitive surplus.

Both of these rely on cognitive surplus.

(b) Surplus deficit position of the fund

But China s 3.2 trillion problem will become a 20 trillion renminbi problem if China cannot reduce its current account surplus and fence off capital inflows. There is no escape from the need for domestic structural adjustment.

Together with the surpluses of Austria, the Netherlands, and most non eurozone northern countries namely, Switzerland, Sweden, Denmark, and Norway northern Europe has run a current account surplus of 511 billion over the last 12 months. That is larger than the Chinese surplus has ever been and scary because it subtracts net demand from the rest of Europe and the world economy.

As developing countries increased their labor intensive production and exports, their current account surpluses rose by almost 3.6 percentage points, on average, between 1989 1993 and 2002 2006. China s current account surplus increased by almost 11 percentage points over the same period, India s by 2.5 percentage points, and Russia s by seven percentage points.

RMB appreciation should have started earlier and at a faster pace, when China s trade surplus was much smaller and its growth was much less dependent on exports. Delay has made current account rebalancing via RMB appreciation costly.

Cognitive surplus is made up of two things.

Europe almost doubled its surplus in 2000 2003.

The United Kingdom maintained a current account surplus for the century before World War I, and the US did the same for about 80 years before 1980. But neither country, apparently, did so by manipulating its exchange rate.

On top of this is the almost certain unwinding of global current account imbalances. Emerging markets and developing countries ran a surplus of 631 billion in 2007, split roughly equally between Asian countries and the oil exporting states.

But whether renminbi appreciation will work depends on reducing China s net capital inflows and current account surplus. International experience suggests that, in the short run, more capital flows into a country when its currency appreciates, and most empirical studies have shown that gradual appreciation has only a limited effect on countries current account positions.

Yet, strangely, it is the Fed, not the ECB, that has set an unemployment target. The US unemployment rate has declined to around 7.7 and the current account deficit is close to 500 billion, while eurozone unemployment is at a record high, near 12 , and the current account shows a surplus approaching 100 billion.

Clay Shirky How cognitive surplus will change the world

German policymakers pride themselves on the country s vast current account surplus 197 billion ( 262 billion) as of June 2014 viewing it as a sign of Germany s superior competitiveness. Why, then, are businesses unwilling to invest more in the country?

When all of these reforms are realized, China s national saving rate may be reduced to 45 , from 51 currently. That will have a very significant effect in terms of reducing the current account surplus, which reflects net national savings.