libellule said:
SamuelRSmith said:
libellule said:
but it is an account ? if it is negative it means you are .... poor because you have money to give back to someone ???
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That isn't what a current account it. It's a measure of everything that a country exports, subtracted by everything that the country has imported.
So, if a country exports £250m worth of goods, but imports £300m, they will have a current account deficit of ... -£50m.
The reason why China's is so high, is because they export loads, and import very little (relatively), and the USA is the reverse - it exports little, and imports lots (indeed, it's one of the largest exporters in the world... but it just imports a fuck-tonne).
But the crucial fact of the matter is that, in the long run the current account always averages £0. That means, over time, the amount of imports will always be equal to the amount of exports (I won't go into the economics of why, unless somebody asks). This means that, at some point in the future (probably between 20-30 years away), the USA will begin exporting more stuff than it imports, and China will begin importing more stuff than it exports.
Thus, both China's and USA's surplus/deficit will shrink to £0.
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wow
I understand your point about the balance import/export
BUT
when you start saying it will go, with time, to 0 at some point : that I dont get
how could it possible for US to import less (they need so much ressource to live like any big developped countries) and start export a lot more (I doubt their industry will start skyorocketing ....)
so, how is it possible ?
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I don't know where you get this idea that the USA doesn't make anything? They're the largest manufacturer in the world, by quite some margin. The problem is, they manufacture things that are expensive: weapons, pharmaceuticals, vehicles; and things that are non-essential - entertainment products, luxury foods, etc.
Their exports will go up when China gets richer. When China gets richer, they'll want to buy the entertainment products, and the luxury foods. They'll be able to afford the vehicles, and expensive health products, and all of the other expensive gear that the USA produces.
The USA won't import less, it's always going to import low-end manufactured goods, and the ilk. But, when the developing world get rich - THEY'll import more, and those imports will be coming from countries like the USA.
