How big is China’s trade surplus?

Brad Setser:

Michael Spence has a Nobel prize in economics, a series of very prestigious academic appointments, friends on the Harvard faculty and access to the opinion page of the Wall Street Journal.

I, obviously, don’t have comparable qualifications — or comparable access to the Wall Street Journal’s oped page.

But I do try to follow the data coming out of China closely. I probably shouldn’t say this, but it sure seemed to me that Dr. Spence got a few key facts wrong in his Wall Street Journal oped…

If you just look at China’s trade surplus (BoP basis), it works out to around 5.5% in 2005 and probably 6.5-7% of China’s GDP in 2006 — numbers comparable to the US trade deficit. Spence’s graph shows China’s trade surplus through 2004. That seems a bit misleading to me: China’s trade surplus ballooned in 2005 and 2006, just when the graph ends. Spence’s argument worked through 2004. It no longer does.

Spence’s side of the debate is behind the WSJ‘s firewall.