On Nov 12, 2009, at 6:49 AM, Michael Pollak wrote:
> "China has not been experiencing net inflows of capital?" I'm
> totally down with the argument that China disproves rather than
> proves the Washington Consensus because it broke every rule in the
> book. But I thought this came from harnessing FDI, not excluding
> it. I could swear that China has been one of top destinations for
> FDI for years. No?
SA got here first, but some numbers. In 2008, China had a surplus of $361 billion on trade in goods; a deficit of $12 billion on services; a surplus of $31 billion on income; and a surplus of $16 billion on its capital account. Within the capital account, there was a deficit (net inflow) of $53 billion on FDI, but a surplus of $23 billion on portfolio investment (meaning Chinese acquired more assets abroad than foreigners acquired in China). The total balance on the current account was +$426 billion. The net investment position with the rest of the world was +$1.5 trillion (i.e., China had that much more in foreign assets than in liabilities to foreigners) - $2.9 trillion in assets, and $1.4 trillion in liabilities. Within the liabilities, foreigners held $876 billion in FDI, but only $161 billion in portfolio investment. By contrast, China had $169 billion in FDI abroad, and $251 billion in portfolio assets. Most of the assets, though, were in foreign reserves - a hair shy of $2 trillion.
Doug