I guess I should qualify my statement, since this post is about surplusses based on value-added business like manufacturing and technology. A trade surplus based on resource extraction is not necessarily a source of long-term wealth.
I agree with the statement “The notion that bilateral trade deficits are per se detrimental to the respective national economies is overwhelmingly rejected by trade experts and economists.”, by the way. The key word is “bilateral”. Consider the China-Australia example I used in my original post. China has a bilateral trade deficit with Australia, but that’s misleading because China imports raw material from Australia and exports manufactured goods to many other nations. In this way, China’s bilateral trade deficit with Australia is one component of a net trade surplus. once you account for all the other countries China trade with.
The country with the highest GDP-adjusted export/import ratio is… Gabon. Then Qatar, Bermuda, Cambodia, Turkmenistan, and Libya. Norway is sandwiched between Congo and Azerbaijan. Zimbabwe ekes out a lead over the US. Luxembourg, the country with the highest GDP per capita, is right below Kuwait.
You are spreading misinformation. The impact of trade balances on GDP growth is an incredibly controversial topic among academic economists.
I guess I should qualify my statement, since this post is about surplusses based on value-added business like manufacturing and technology. A trade surplus based on resource extraction is not necessarily a source of long-term wealth.
I agree with the statement “The notion that bilateral trade deficits are per se detrimental to the respective national economies is overwhelmingly rejected by trade experts and economists.”, by the way. The key word is “bilateral”. Consider the China-Australia example I used in my original post. China has a bilateral trade deficit with Australia, but that’s misleading because China imports raw material from Australia and exports manufactured goods to many other nations. In this way, China’s bilateral trade deficit with Australia is one component of a net trade surplus. once you account for all the other countries China trade with.
This is simply false. See e.g. https://en.wikipedia.org/wiki/List_of_countries_by_trade-to-GDP_ratio
The country with the highest GDP-adjusted export/import ratio is… Gabon. Then Qatar, Bermuda, Cambodia, Turkmenistan, and Libya. Norway is sandwiched between Congo and Azerbaijan. Zimbabwe ekes out a lead over the US. Luxembourg, the country with the highest GDP per capita, is right below Kuwait.
You are spreading misinformation. The impact of trade balances on GDP growth is an incredibly controversial topic among academic economists.