Eingestellte DIW Publikationen 4 / 1976, S. 238-243
Ernst Hagemann
The potential for trade expansion between western industrialized and socialist economies is as a rule limited by the latter countries' relatively small export capacity, their considerable indebtedness, and their low level of international reserves. Similar apprehensions have been expressed regarding trade with China as well. Reports of a passive balance of trade, rumors about Chinese sales of gold, and the discussion about the possible willingness of the People's Republic to accept larger credits from its trading partners have raised interest in the Chinese balance of payments. The Chinese balance of trade has since 1955 usually closed favourable; only since 1973 have there been larger deficits. On the other hand, since 1960 China has been steadily achieving a substantial surplus in the balance of services, mostly due to the items of transportation, insurance cost and capital returns. Supposedly, there has been a net inflow of long-term-capital during the past years, while only little is known about short-term-movements. The information about international reserves is scarce as well. The reserves in 1974 have been estimated at 2,5 Billion US-$, a high quota of which is probably held in gold. On the whole Chinas balance of payments situation is not as dramatic as may be presumed from the recent deficits in its trade balance. Nevertheless the PRC will have to make strong efforts to mobilize its export-resources, which are considerable, especially in the field of raw materials.