Online Claims China's Annual Trade Surplus to Exceed One Trillion USD; Dollar Standard Limits International
China's external economic circulation requires financial services to facilitate global governments, institutions, and companies raising RMB funds under market rules, and to enable investors to use RMB for investing in Chinese enterprises and their host countries. The dollar-based international payment system ties trade expansion to deficit countries' dollar availability, constraining surplus countries and developing nations with trade deficits.
China's external economic circulation requires corresponding financial services to facilitate governments, financial institutions, and enterprises worldwide in raising RMB funds according to market rules, and to facilitate foreign investors using RMB to invest in Chinese enterprises and the governments and enterprises of their host countries. Under the dollar as the international standard currency, international trade payments are mainly made in dollars, and these funds typically come from the United States or other trade deficit countries. This structure has certain limitations, such as the trade expansion of surplus countries being constrained by the dollar funds that deficit countries can pay. Some developing countries have smaller surpluses with Europe and the United States than their deficits with China and other countries, and their products have limited international competitiveness. Meanwhile, they are in the early stage of economic development and need sustained capital inflows, manifesting as net deficits in international trade.