To do so, the US will need a trade surplus.

In fact, China's overall trade surplus today is actually small, around 1 of its GDP. Of course, the Bush Administration wants to shift the blame, but neither China, nor anyone else, should be fooled.

In fact, China's overall trade surplus today is actually small, around 1 of its GDP.

After all, a weaker currency and better trade balance in some countries necessarily implies a stronger currency and a weaker trade balance in others.

Its trade balance would turn negative, and there would be widespread unemployment.

In the past year, the RMB has appreciated by 6 , but the pace is not fast enough to reduce China s global trade surplus, its internal imbalances, or foreign exchange market pressures.

Second, any improvement in GDP derived from stronger exports leads to an increase in imports. Empirical studies estimate that the overall impact of a weaker US dollar on the trade balance is close to zero.

Empirical studies estimate that the overall impact of a weaker US dollar on the trade balance is close to zero.

So America's Treasury Secretary accuses China of deliberately keepings its exchange rate low, and calls for China to let market forces determine the value of the reminbi. The IMF's departing Chief Economist, Ken Rogoff, warns that the surpluses put global stability at risk.

Many factors other than exchange rates affect a country s trade balance. A key determinant is national savings.

The IMF's departing Chief Economist, Ken Rogoff, warns that the surpluses put global stability at risk.

Its trade balance is positive, and total public debt is not as high as it is in other countries.

Perhaps most important, a weaker dollar s effect on the trade balance, and thus on growth, is limited by two factors.

The theoretical problem is simple a country s trade balance depends on a lot more than the value of its currency in the foreign exchange markets.

China represents a massive challenge even for countries, such as Brazil, that have achieved a significant trade surplus up to now. So dividing Latin American countries into winners and losers makes no sense.

China represents a massive challenge even for countries, such as Brazil, that have achieved a significant trade surplus up to now.

To judge whether their prices are too high at the existing exchange rate we have to look at the trade balance.

China might want oil from the Middle East, but those in the Middle East with so much wealth concentrated in so few hands might be more interested in Gucci handbags than in China s mass produced goods. So China can have a trade deficit with the Middle East and a trade surplus with the US, but these bilateral balances indicate nothing about China s overall contribution to global imbalances.

So China can have a trade deficit with the Middle East and a trade surplus with the US, but these bilateral balances indicate nothing about China s overall contribution to global imbalances.

Balance Sheet

And, given that many goods are no longer produced in the US, stimulus measures would suck in more imports, further undermining the trade balance.

That won t happen anytime soon, but it is the direction in which the trade balance must continue to move.

A Tricky Trade Treaty

This vending machine is out of order.

The mall is deserted.

The mall is open.

In sum, the fact that the US trade balance has defied gravity for so many years has made it possible for the dollar to do so, too.

D. Gender balance

My balance is negative.

And, with the euro down significantly relative to many other currencies over the past year, Europe s trade balance can increase further in the months ahead.

In a world of integrated capital markets and floating exchange rates, the trade balance between any two countries reflects the difference between their domestic investment and savings.

A Lego vending machine!

There is a shopping area nearby.

There is a shopping area nearby.

Where's the shopping center?

The shopping center will be demolished.

Let's go to the mall.

Second, since the US has a large trade deficit that can only be cured by a more competitive dollar (while the euro zone countries collectively have a trade surplus), investors expect a trend decline in the dollar.

But today, the balance is shifting.

Finding the right balance is not easy.

How do you find a balance?

We need to strike a balance.

The balance of nature is very fragile.

My balance is negative.

Savings could remain high, even as current consumption grows slowly, while the trade balance would be held in check by higher demand for imported capital goods.