Friday, 10 Oct 2025
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA
logo logo
  • World
  • Politics
  • Crime
  • Economy
  • Tech & Science
  • Sports
  • Entertainment
  • More
    • Education
    • Celebrities
    • Culture and Arts
    • Environment
    • Health and Wellness
    • Lifestyle
  • 🔥
  • Trump
  • VIDEO
  • House
  • White
  • ScienceAlert
  • Trumps
  • Watch
  • man
  • Health
  • Season
Font ResizerAa
American FocusAmerican Focus
Search
  • World
  • Politics
  • Crime
  • Economy
  • Tech & Science
  • Sports
  • Entertainment
  • More
    • Education
    • Celebrities
    • Culture and Arts
    • Environment
    • Health and Wellness
    • Lifestyle
Follow US
© 2024 americanfocus.online – All Rights Reserved.
American Focus > Blog > Economy > China’s Trade Surpluses are Not a Source of Strength
Economy

China’s Trade Surpluses are Not a Source of Strength

Last updated: March 24, 2025 11:48 am
Share
China’s Trade Surpluses are Not a Source of Strength
SHARE

In his latest publication, Dawn’s Early Light: Taking Back Washington to Save America, Kevin Roberts from the Heritage Foundation asserts that “China believes it has a mandate to rule the world” and is leveraging trade balances to achieve this ambition.

Roberts points out that this strategy is not new. “As far back as the Roman Empire,” he notes, “the global demand for Chinese goods far outstripped what China sought from other nations… This trade imbalance has significantly influenced the global economy—archaeological digs have unearthed coins from various continents in China, yet no ancient Chinese coin has ever been found outside East Asia.”

He further explains, “China’s economic supremacy, its monopoly over coveted goods, and its meticulously managed trade policies have generated enormous wealth for its rulers, albeit not for the general populace.” Indeed, estimates by Angus Maddison reveal a decline in per capita GDP in China from 106% of Britain’s in 1000 to 71% in 1500 and plummeting to 28% by 1880.

However, the benefits of these trade surpluses did not shield China’s leaders from adversity. When Britain opted to forcibly open China to trade in 1839, the Qing dynasty realized that its accumulated treasures were no match for Queen Victoria’s naval might. Those coins might have been more effectively allocated toward armaments than buried in the ground for future archaeologists to ponder. The nation with the trade deficit ultimately emerged victorious, proving that “before 1839,” as Roberts remarks, “trade was in favor of the Chinese,” yet the ensuing consequences were disastrous: military defeat, political fragmentation, and a subsequent plunge into communism.

See also  President Donald J. Trump Secures a Historic Trade Win for the United States – The White House

Roberts contends that China’s:

…traditional approach of amassing massive trade surpluses should not have been viable in today’s monetary landscape, as modern currency is not gold-backed (unlike the wealth of gold and silver that flowed to China under the Canton System). The surpluses generated by exporting more than imports should have led to a rise in the value of the yuan and a decline for its trade partners’ currencies. Over time, this would have rendered Chinese products more expensive and less appealing for outsourcing…

“Yet that never materialized,” he argues, “because China resorted to illegal currency devaluation, which harmed its citizens while ensuring that the CCP’s strategy of eroding Western manufacturing and reclaiming China’s position as a global economic powerhouse would succeed.”

Despite this strategy, the benefits appear limited. While GDP per capita in China has increased from a mere 7% of Britain’s in 1950 to 34% in 2018—levels not seen since around 1770—Roberts accurately notes that currency manipulation has led to decreased real incomes for its citizens. Moreover, the monetary expansion required to maintain the yuan’s exchange stability against the dollar has contributed to one of the largest property bubbles in history.

“Even a domestic spending and debt frenzy in China could not absorb all the trade imbalance,” Roberts observes, revealing that a U.S. trade deficit must be counterbalanced by a capital account surplus:

To sustain its export advantage, China employed a cunning tactic: it invested in the United States, purchasing American assets with U.S. dollars. This not only bolstered the dollar’s value (keeping Chinese products competitively priced) but also aimed at acquiring U.S. companies, real estate, and amassing trillions in U.S. government debt. Currently, the CCP holds a staggering $3 trillion in assets, many of which are American.

See also  Alphabet shares rise as Google search boosts profits

However, this accumulation may not be as advantageous as it appears. Possessing a considerable amount of depreciating U.S. government debt is not a position of strength. China cannot liquidate these holdings without jeopardizing their value—something the U.S. government seems to be doing quite effectively on its own. As for the U.S. assets, like farmland, they are not going anywhere—much like the properties that caused considerable distress for the Japanese in the 1980s.

While it is true that China’s government may be pursuing a trade surplus as a strategic policy to bolster its position against competitors like the United States, historical precedence suggests that the outlook for Beijing is grim. The Qing dynasty’s fate serves as a cautionary tale, as does the trajectory of the Communist Party itself.


John Phelan is an Economist at Center of the American Experiment.

TAGGED:ChinassourcestrengthSurplusesTrade
Share This Article
Twitter Email Copy Link Print
Previous Article Artificial Intelligence: Transforming Law Enforcement And The Justice System Artificial Intelligence: Transforming Law Enforcement And The Justice System
Next Article Jennifer Aniston & Pedro Pascal Are Not Dating Despite Romance Rumors Jennifer Aniston & Pedro Pascal Are Not Dating Despite Romance Rumors
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Posts

Pope Francis In ‘Critical Condition,’ Requests Prayers

Pope Francis is currently fighting for his life as he battles a series of health…

February 24, 2025

Potential NFL salary-cap cuts for all 32 teams: From Cooper Kupp to Davante Adams and more

As the NFL offseason heats up, teams are faced with tough decisions on who to…

February 17, 2025

What Health Systems That Are ‘Losing On Medicare Advantage’ Can Do

Medicare Advantage is often seen as a challenging program, with providers expressing frustrations over inadequate…

May 20, 2025

South Africa faces backlash over plan to change law for Musk’s Starlink

South African opposition parties are up in arms over the government's alleged "backdoor deal" with…

May 31, 2025

Mountain snow closes segment of I-70 west of Golden

An ongoing snowstorm in April has led to the closure of a section of Interstate…

April 18, 2025

You Might Also Like

Adidas to Enter Safety Footwear in 2026 With New ‘Pro Work’ Line
Economy

Adidas to Enter Safety Footwear in 2026 With New ‘Pro Work’ Line

October 10, 2025
Elon Musk and former Twitter execs agree to settle 8 million lawsuit
Economy

Elon Musk and former Twitter execs agree to settle $128 million lawsuit

October 10, 2025
Should You Buy Novartis Stock Before October 28?
Economy

Should You Buy Novartis Stock Before October 28?

October 10, 2025
I’m a Financial Advisor: People Always Regret Doing These 5 Things With Their Roth IRA
Economy

I’m a Financial Advisor: People Always Regret Doing These 5 Things With Their Roth IRA

October 10, 2025
logo logo
Facebook Twitter Youtube

About US


Explore global affairs, political insights, and linguistic origins. Stay informed with our comprehensive coverage of world news, politics, and Lifestyle.

Top Categories
  • Crime
  • Environment
  • Sports
  • Tech and Science
Usefull Links
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA

© 2024 americanfocus.online –  All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?