China's Balance of Payments Evolution From Deficit to Sustainability Surplus



1 Higher Institute of Administrative Sciences Egypt

2 American University in the Emirates, UAE.


China's experience has aroused much controversy in international societies, as it has become a guiding experience for many developing countries seeking economic growth and the treatment of external imbalances (deficits), and this experience has been known for their macroeconomic breakthroughs at all levels. In the beginning the communist regime, the main task of the Chinese was to restore and rehabilitate the country after the war, as well as the legacy of the past economic backwardness and population pressure, establishing the "New China".
During the same period the Chinese suffered from years to the external deficit. The policy of reform and the open door was adopted, until the deficit completely vanished in the mid-1990s and even turned into a surplus of current and financial balance and hence a surplus in the total balance. In this paper, the development of China's balance-of-payments components and transition stages will be analyzed using some statistical tools. The evolution of economic variables affecting external balance, that motivated China to reach the most important corrective measures to remedy the external deficit, as well as the basic pillars on which it depended to sustain the surplus in the balance of payments.
The Egyptian economy is considered one of the most important indicators that reflect the Egyptian economy's external situations and the extent of its disorders resulting from both internal and external causes and drawing the most important lessons from China's experience to benefit from them in confronting and reducing Egypt's external deficit. A comparison will be conducted between the two countries with a discussion for the beneficial lessons that been implemented in the Egyptian context.