As incomes in China grow, imports from other low or middle income countries rise faster than imports from high wage countries. China's trade surplus with the US exceeds 100 billion, but it runs a deficit with India.

China's trade surplus with the US exceeds 100 billion, but it runs a deficit with India.

With the global economy recovering, China s trade surplus began to grow.

That country has a trade surplus. It exports more than it imports.

So its trade surplus continues to soar at the expense of other countries.

This is the strongest decline in net foreign demand facing a single country, or, equivalently, the strongest increase in a country s net demand for foreign goods.

This makes the renminbi chronically undervalued and assures China of a persistent large trade surplus.

Japan s trade balance fell into deficit in 2011, for the first time since 1980.

Its launch has sharply weakened the yen and is now leading to rising trade surpluses.

Germany , Europe s largest exporter, has a very large trade surplus with the rest of the world.

They would run down their trade surpluses and, in some cases, allow their currencies to appreciate.

Australia has been a particularly large beneficiary of Chinese growth, which is relatively commodity intensive. This has tended to increase metals prices, fueling Australia s large export surplus in metals.

Manufacturing production has plummeted, the trade balance has deteriorated sharply, and corporate bankruptcies are increasingly frequent.

The US has complained about China s current account (trade) surpluses but, as a percentage of GDP, Germany s surplus is even greater.

The arithmetic of global trade implies that the sum of all trade deficits equals the sum of all trade surpluses. If some countries, say, Japan and China, insist on running huge surpluses year after year, then other countries must run deficits.

Trade and immigration (legal and illegal), if left unchecked, will continue to exert downward pressure on rich countries labor markets.

The arithmetic of global trade implies that the sum of all trade deficits equals the sum of all trade surpluses.

China has yet to discover and adopt an alternative growth strategy that does not rely on a large trade surplus.

So China continues to run a giant trade surplus, and the US continues to spend and borrow.

Moreover, it is hard to see how anyone even the IMF, as the US proposal envisions could enforce caps on trade surpluses.

But some, particularly American politicians in this presidential election year, focus on only one thing China s trade balance.

China s purchases of American debt effectively transferred the official reserves gained via China s trade surplus back to the US market.

But the downward trend in the trade balance is clear.

But the euro area as a whole nonetheless had a trade surplus of more than 30 billion over the past 12 months.

It is nice that Mexican workers and entrepreneurs are gaining experience in export manufactures, and successful enough to run a trade surplus vis à vis the US.

The northern countries argue that permitting wage growth and boosting domestic demand would reduce their competitiveness and trade surplus. But that misses the entire point surplus countries must contribute no less than deficit countries to global and regional rebalancing, because the world economy cannot export to outer space.

In the end, this may be the most compelling reason for why China should continue to run trade surpluses.

Thus, they would minimize the deterioration in their trade surpluses, maintain competitive exchange rates, and safeguard their foreign reserves and net creditor positions.

The northern countries argue that permitting wage growth and boosting domestic demand would reduce their competitiveness and trade surplus.

So far in 2009, China s surplus has accounted for 75 of the total US non oil goods trade deficit.

And, to be sure, it would very difficult for countries to cap their trade surpluses in practice there are simply too many macroeconomic and measurement uncertainties.

In recent years, China also got hooked on a large trade surplus vis à vis the US the counterpart of its undervalued currency.

In recent years, China also got hooked on a large trade surplus vis à vis the US  the counterpart of its undervalued currency.

Many emerging markets have run current account surpluses for the first time.

Partly by design and partly by chance, about a decade ago China found itself consistently accumulating large amounts of foreign reserves by running a trade surplus and intervening to buy up the dollars that this generated.

Moreover, national banking systems can now separate more easily, because the peripheral countries current accounts have already achieved a rough balance, with all but Greece expected to record a small external surplus in 2014.

Countries that had been growing rapidly in the run up to the great crash of 2008 typically had trade surpluses (or very small deficits).

But what is that sustainable level of the trade balance and of the dollar?

The fall in the capital inflow would therefore bring with it a fall in the trade deficit.

With imports still growing strongly and commodity prices beginning to fall as a result of the world slowdown, Argentina s large trade surplus is disappearing quickly.

China found it useful to run a large trade surplus, using a very high rate of internal savings and inward foreign investment to support its industrialization and rapid growth.

Higher foreign demand from today s trade surplus countries (China, Germany, and Japan, among others) could help restore some of the missing demand.

Meanwhile, the trade surplus is rising again, in part because China is dumping its excess supply of goods such as steel in global markets.

Americans accumulated their trade deficits by living far beyond their means.

China's current account surplus and export growth have, indeed, fallen.