10 August 2018 / China
Navigating China's savings surplus
China's current account surplus, measuring its excess savings vis-a-vis the rest of the world, is dwindling fast. This is causing the Chinese government to rethink its foreign investment strategies. Beijing may have to choose between slowing down outbound direct investment and scaling back the Belt and Road infrastructure initiative. China may be able to postpone the choice by reducing its stock of US Treasury bonds. Such a sell-off would, however, add one more problem to the already long list of China-US complications.