Common factors affecting international trade imbalance

The so-called international trade imbalance refers to the phenomenon that the trade deficit or surplus is too large. There are many reasons for the international trade imbalance, which are also very complex. Therefore, the solution is also not limited to one, and can only be achieved through multiple efforts. Better and proper solution, so as to avoid the violent turbulence of the world economy.

Analysis of China Standard Parts: There are three common factors that affect the imbalance of international trade:

First, necessary foreign exchange reserves are an effective means to prevent and resolve financial crises. Several financial crises in Latin America and Asia in the past 20 years were first broken through by the shortage of foreign exchange, and finally resolved by the injection of foreign exchange. The painful lessons have made many developing countries understand that they must increase their foreign exchange reserves through various means to prepare for unforeseen circumstances. Therefore, these countries strive to export more than their imports, so that foreign exchange increases. This of course affects the balance of trade.

Second, use the trade surplus as an engine for investment and growth. Many developing countries once hoped to introduce a large amount of foreign capital to develop their own economies. But this wish did not materialize. As a result, they have to turn to self-reliance, relying on the country’s trade surplus to accumulate funds. This results in more exports and less imports, resulting in a trade imbalance.

Third, the transfer of deficit or surplus caused by industrial transfer. From the 1960s to the early 1980s, a large number of labor-intensive industries in developed countries such as Europe and the United States were transferred to many developing countries, especially some countries and regions in Southeast Asia. trade surplus. Since the early 1980s, Japan, the United States and the “four little dragons” of Asia have transferred some industries to mainland China, and subsequently transferred their trade surplus to China. This is one of the important factors in the formation of the Sino-US trade imbalance.

Although on the surface, there are many reasons for global trade imbalance, even strange, but fundamental research and observation, it is not difficult to find that it is caused by the unbalanced development of the world economy. Due to many reasons such as science and technology, economy, society and natural resources, the speed of economic development in various countries varies. It turns out that some backward countries have caught up. On the contrary, some advanced countries have fallen behind. As a result, the old economic order and trade relationship will inevitably be disrupted, and a new order and relationship will be formed. 

 


Post time: Apr-20-2022