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In the international environment, it is apparent that China is making large investments in the
global financial markets in their shift away from exports. Is there a connection between China's
exports and its financial investments in other countries? Your answer should mention China's
current financial account.
Solution
China has seen huge export surpluses during recent years. In 2008 China's
export surplus was 7.9 percent of GDP, down from 8.9 percent of GDP in 2007. The export
surplus is substanital even though declining. However, in the recent years there has been an
increase in China's FDI (Foreign Direct Invesments).

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