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Brad Setser tracks cross-border flows, with a bit of macroeconomics thrown in.

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The iPhone, the IMF, and China’s Balance of Payments

by Brad W. Setser February 24, 2025

The iPhone is priced correctly in China’s customs trade data. A seemingly banal observation that leads to big questions about China’s post 2022 balance of payments methodology. 

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China
Xi is Making the World Pay for China’s Mistakes
My recent essay in the New York Times argues that China’s rising surplus in manufactures is a real threat to the global economy. 
Post by Brad W. Setser February 23, 2025 Follow the Money
China
China’s FX Playbook: December 2024
This is this first blog in an ongoing series which will provide a monthly look at the various indicators of China’s foreign exchange management.
Post by Brad W. Setser and Michael Weilandt January 29, 2025 Follow the Money
China
China’s Stunning 2024 Export Growth
Chinese exports are growing much faster in volume than in dollar terms. Europe is losing out.
Post by Brad W. Setser and Michael Weilandt December 17, 2024 Follow the Money
  • China
    Will China Take Over the Global Auto Industry?
    China’s electric vehicle capacity will soon match total Chinese domestic auto demand, and total Chinese auto production capacity is already over half of total global auto demand.
    Post by Brad W. Setser December 8, 2024 Follow the Money
  • China
    Why Did China’s Current Account Surplus Surge in the Third Quarter?
    An old school, “make blogging great again” style post. The rise in the current account surplus might be linked to the “carry” unwind in the third quarter.
    Post by Brad W. Setser December 1, 2024 Follow the Money
  • Economics
    The U.S. Income Balance Puzzle
    The long-standing surplus in the U.S. investment income account, often cited as evidence of  “exorbitant privilege,” is receding. It already goes away without the income from profit-shifting by U.S. multinationals.
    Post by Brad W. Setser and Michael Weilandt November 3, 2024 Follow the Money
  • RealEcon
    The Surprising Resilience of Globalization: An Examination of Claims of Economic Fragmentation
    In my new paper published by the Aspen Economic Strategy Group, I highlight the persistence of unhealthy globalization and lay out some proposals for a more sustainable regime. 
    Post by Brad W. Setser October 17, 2024 Follow the Money
  • China
    The iPhone's Outsized Impact on Debates about China's Trade Data
    China’s main explanation for the $300 billion plus gap between its customs surplus and its goods surplus in the balance of payments is the Apple iPhone.
    Post by Brad W. Setser October 14, 2024 Follow the Money
  • China
    Beijing Still Has Fiscal Space
    China’s central government has plenty of capacity to implement a counter-cyclical fiscal approach in addressing its economic slowdown. Net central government debt is very, very low.
    Post by Brad W. Setser September 30, 2024 Follow the Money
  • China
    Chinese State Investors Do Not Seem to Profit From Higher U.S. Interest Rates
    Given the size and composition of its external lending, China should be clearing far more interest income on its reserves and policy lending than SAFE reports.
    Post by Brad W. Setser September 2, 2024 Follow the Money