CFR Says China Drives Global Imbalances With $750 Billion Surplus as Europe’s Falls to €280 Billion
Updated
Updated · Council on Foreign Relations · Jun 22
CFR Says China Drives Global Imbalances With $750 Billion Surplus as Europe’s Falls to €280 Billion
1 articles · Updated · Council on Foreign Relations · Jun 22
Summary
$750 billion — China’s reported current account surplus has jumped from about $400 billion since end-2024, while the euro area’s surplus has dropped to €280 billion, leading CFR experts to argue China now drives global imbalances.
Three flaws distort OECD and IMF comparisons: they rely on stale annual data, leave Ireland’s profit-shifting-heavy surplus inside euro area totals, and accept China’s disputed balance-of-payments methodology and $125 billion investment-income deficit at face value.
€230 billion — netting out Ireland cuts the euro area’s 2025 current account surplus to roughly that level, or under 2% of GDP, while China’s goods-and-services surplus is about twice the euro area’s on CFR’s adjusted comparison.
$4 trillion — despite that positive net international investment position, China still reports a $125 billion income deficit; CFR says the mismatch and a 2022 methodology change likely understate China’s true external surplus.
IMF and OECD should shift to trailing four-quarter data, adjust euro area figures for Ireland, and use broader measures than China’s reported current account when assessing global excess imbalances, the report said.