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Follow the Money

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

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Will China Take Over the Global Auto Industry?

by Brad W. Setser December 8, 2024

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.

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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.
Blog Post by Brad W. Setser December 1, 2024 Follow the Money
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.
Blog Post by Brad W. Setser and Michael Weilandt November 3, 2024 Follow the Money
Economics
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. 
Blog Post by Brad W. Setser October 17, 2024 Follow the Money
  • 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.
    Blog Post by Brad W. Setser October 14, 2024 Follow the Money
  • 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.
    Blog Post by Brad W. Setser September 30, 2024 Follow the Money
  • 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.
    Blog Post by Brad W. Setser September 2, 2024 Follow the Money
  • 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.
    Blog Post by Brad W. Setser August 26, 2024 Follow the Money
  • 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.
    Blog Post by Brad W. Setser August 14, 2024 Follow the Money
  • Economics
    What to Do About the Liquidity Difficulties in Low-Income Countries
    The IMF, while recognizing the liquidity challenges sure to be faced by several indebted countries in the coming years, needs to offer a solution that both widens its scope and deepens its analysis.
    Blog Post by Brad W. Setser August 13, 2024 Follow the Money
  • Economics
    The Spotty International Tax Record of Big U.S. Technology Companies
    Many big technology firms continue to book large offshore profits in low tax jurisdictions, particularly Ireland and Singapore.
    Blog Post by Brad W. Setser July 28, 2024 Follow the Money