Current account is a part of the balance of payment that measures the imports and exports of goods and services. China has been experiencing surplus in the current account for 12 years according to the graph. This means that China has exported more than it has imported for 12 years. The amount of surplus increased dramatically between year 2006 and year 2010.
As China has experienced the surplus of current account, this implies that Chinese people have not enjoyed the highest possible standards of living as it could be. The surplus they earn could be used to boost up the living standards of Chinese people and also bolster the economic growth. However, in the case with China, it is not that China is in surplus because it is under-performing. Instead, their products exported are extremely competitive in terms of price and this is what it’s boosting up their exports. China has actually decided to decelerate on their economic growth because they fear that the overheating of their economy will cause severe inflation. So, they have decided to set their economic growth under 8-7%.