China's current-account surplus declines by one third in 2009

China’s current-account surplus fell by almost a third to US$284.1 billion over the course of 2009, according to preliminary estimates by the State Administration of Foreign Exchange. The decline – the first outright contraction in the measure since 2001 – reflects the impact of the global financial crisis, the Wall Street Journal reported. China’s trade surplus shrank to US$249.3 billion in 2009 down from US$368.7 billion the previous year as export demand crumbled. At the same time, Beijing’s policies to stimulate the economy helped support imports. The current-account surplus also includes a deficit of US$28.7 billion for trade in services, as well as income from abroad and transfers. China’s surplus for 2009 stood at 5.8% of GDP, compared to 9.4% in 2008 and 11% in 2007. Many economists would like to see further efforts from Beijing to reduce the current-account surplus on the grounds that huge surpluses in China and huge deficits in the US are responsible for destabilizing the global economy.