Photo: Markusram on Flickr
Something seriously creepy is going on.The world ran a $331 billion current account surplus last year—IMF statistics show it exports more than it imports. If the statistics are true, it would mean the world is exporting to aliens.
This statistical discrepancy has long been a problem, but it’s one that has intensified since 2007:
– It’s difficult to accurately measure imports and exports of services.
– Differences in measurement techniques: “Transport lags can cause annual global exports to exceed imports when trade is growing rapidly because goods in transit in December are counted as exports by China, say, but are not counted as imports by America until January.”
– “Another possible explanation posits that the surge in the global discrepancy broadly coincides with both the explosion in vertically integrated businesses, where firms locate different stages of production in different countries, and the increase in China’s trade…In 2009 intra-firm trade accounted for half of America’s imports.”
At the end of the day, such mismeasurement is a serious issue. China’s measurements could have overestimated its current account surplus by as much as 3 to 4%—and current data shows that surplus is equivalent to 5% of GDP.
From The Economist:
The good news is that international concerns about global imbalances may be much less pressing than many think. The bad news is that conventional balance-of-payments measures are clearly less reliable in a world of rising intra-firm trade and complex supply chains. That matters because dodgy statistics lead to policy mistakes. Governments should clean the figures up.
Check out The Economist’s full, in-depth analysis of this problem here.