Blogs

Follow the Money

Brad Setser tracks cross-border flows, with a bit of macroeconomics thrown in.

Latest Post

China’s FX Playbook: December 2024

This is this first blog in an ongoing series which will provide a monthly look at the various indicators of China’s foreign exchange management.

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China
China’s Stunning 2024 Export Growth
Chinese exports are growing much faster in volume than in dollar terms. Europe is losing out.
China
Will China Take Over the Global Auto Industry?
China’s electric vehicle capacity will soon match total Chinese domestic auto demand, and total Chinese auto production capacity is already over half of total global auto demand.
China
Why Did China’s Current Account Surplus Surge in the Third Quarter?
An old school, “make blogging great again” style post. The rise in the current account surplus might be linked to the “carry” unwind in the third quarter.
  • Economics
    The U.S. Income Balance Puzzle
    The long-standing surplus in the U.S. investment income account, often cited as evidence of  “exorbitant privilege,” is receding. It already goes away without the income from profit-shifting by U.S. multinationals.
  • RealEcon
    The Surprising Resilience of Globalization: An Examination of Claims of Economic Fragmentation
    In my new paper published by the Aspen Economic Strategy Group, I highlight the persistence of unhealthy globalization and lay out some proposals for a more sustainable regime. 
  • China
    The iPhone, Chinese Customs Data, and China’s Balance of Payments Puzzle
    China’s main explanation for the $300 billion plus gap between its customs surplus and its goods surplus in the balance of payments is the Apple iPhone.
  • China
    Beijing Still Has Fiscal Space
    China’s central government has plenty of capacity to implement a counter-cyclical fiscal approach in addressing its economic slowdown. Net central government debt is very, very low.
  • China
    Chinese State Investors Do Not Seem to Profit From Higher U.S. Interest Rates
    Given the size and composition of its external lending, China should be clearing far more interest income on its reserves and policy lending than SAFE reports.
  • China
    The IMF’s Latest External Sector Report Misses the Mark
    The IMF should take a mulligan on the 2024 External Sector Report. The imbalance in China’s goods trade is expanding, not receding. It is too big for the IMF to ignore.
  • China
    China’s Imaginary Trade Data
    China has a new way of calculating its good surplus in its formal balance of payments data. It is a deeply misleading. It also explains the apparent fall in the current account account surplus.