L1-China&39;s Economic Conditions(10)

Tradebalance

-6.29.08.13.6-11.95.216.712.340.543.629.124.122.630.425.632.0101.9

Year198919901991199219931994199519961998

Exports

52.962.971.985.591.6120.8148.8151.1183.8

Imports

59.153.963.981.8103.6115.6132.1138.8142.2140.2165.8225.1243.6295.2412.8561.4660.1

20042005

593.4762.0

Source: International Monetary Fund, Direction of Trade Statistics, and official Chinese statistics.

Merchandise trade surpluses, large-scale foreign investment, and its peg to the U.S.dollar have enabled China to accumulate the world’s second largest foreign exchange (afterJapan). As seen in Figure 1, China’s accumulation of foreign exchange reserves has beenparticularly acute over the past few years. China’s total reserves reached $769 billion at theend of September 2005, up nearly 50% over the same period in 2004.