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Scanning the Ups and Downs of China’s Trade Imbalances

Since 2007 China has considerably reduced its external global imbalances. Its bilateral trade surpluses with the EU and the US have persisted because the rise of China’s import demand has mainly benefited its Asian neighbors and the resource rich countries. The rapid growth of China’s imports of consumption goods from advanced economies, especially from Europe, suggests that they would benefit from a reorientation of China’s domestic demand towards household consumption.