Select a country then search the Internet for its balance of payments records to answer the following questions: How will the current balance-of-payments position of the country affect its equity and...

Contents
2Foreign trade:
2Data show slow growth, but sentiment remains buoyant
4Forecast summary
5Economic growth
6Foreign direct investment
6Stocks and flows
6Origins and distribution
7Determinants
7Impact
7Potential
Foreign trade:
China's trade surplus (in balance-of-payments terms) fell slightly in 2011, to US$243.8bn, from US$254.2bn in 2010, according to the country's State Administration of Foreign Exchange. Exports totalled US$1.9trn in 2011, while imports stood at US$1.7trn.
    Major exports 2011
    % of total
     
    Major imports 2011
    % of total
    Machinery & transport equipment
    47.5
     
    Machinery & transport equipment
    36.2
    Miscellaneous manufactures
    24.2
     
    Crude materials
    16.4
    Manufactures classified by material
    16.8
     
    Mineral fuels & lubricants
    15.8
    Chemicals & related products
    6
     
    Chemicals & related products
    10.4
     
     
     
     
     
    Leading markets 2010
    % of total
     
    Leading suppliers 2010
    % of total
    US
    18.4
     
    Japan
    13
    Hong Kong
    13.8
     
    South Korea
    10.2
    Japan
    8.1
     
    Taiwan
    8.5
    South Korea
    4.5
     
    US
    7.7
Data show slow growth, but sentiment remains buoyant
Recent data continue to suggest that economic growth is slowing. Industrial value added output was up by 11.4% year on year in real terms in January-February—its slowest rate of growth in two years. This weak picture was underscored by modest year-on-year growth of just 7.1% in electricity generation in the first two months of 2012. Those of a pessimistic bent could point further to two important sectors, cement production and car retailing, that have both performed poorly in recent months, and to rising inventories of items such as copper and airconditioners. Moreover, China posted a trade deficit in January-February, although this partly reflected seasonal factors and the trade balance is expected to return to surplus as the year progresses.
Nevertheless, the government's stance at the NPC appeared to show that officials are not particularly worried about the recent downturn, suggesting that it remains under control. In February the city of Wuhu in Anhui province became the latest local authority to be forced by the central government to backtrack on its planned loosening of restrictions on property purchases. The government's unwillingness to allow a significant easing of restrictions in the property sector, despite month-on-month falls in property prices and weak sales data, highlighted its comfort with the current pace of economic growth.
On top of this, surveys of business confidence suggest a brighter picture. The official government purchasing managers' index (PMI) stood at 51 in February (a reading over 50 indicates an expansion in business activity). A similar PMI produced by a UK-based financial firm, HSBC, also pointed to a modest rate of expansion despite weakness in export orders. In addition, that fact that in February imports rose by 39.6% year on year, to US$146bn—an extremely rapid rate of growth, even discounting for the boost linked to the timing of the Chinese New Year holiday period in 2012—suggests that commodity imports remain firm. This would seem to indicate that local producers are upbeat about the prospects for...