China's current-account surplus stood at a massive US$297bn in 2009, but as a proportion of GDP it has been falling since 2008 and stood at 6.1% in 2009. The surplus is forecast to continue to shrink relative to GDP in 2011-15, but it will remain fairly constant in US dollar terms, and we expect it stand at US$314.2bn, equivalent to 2.5% of GDP, in 2015. Although merchandise exports are forecast to expand rapidly in the forecast period, by 11.9% a year on average, this will be well below the supercharged pace of export growth in the period preceding the global financial and economic crisis. A large proportion of China's imports consists of components that are assembled in the country before being shipped abroad again, and imports and exports therefore tend to expand at similar rates. However, a growing proportion of imports will be consumed domestically in 2011-15, and, at an average of 14.3% a year, import growth will outpace export expansion. The trade surplus will therefore fall, but at US$217.6bn in 2015 it will remain substantial.

The services deficit will widen considerably in 2011-15, largely reflecting an explosion in overseas travel by Chinese tourists. In addition, the economy's growing sophistication will see demand for imports of professional services increase rapidly, although exports of services will also grow, reflecting the increasing earnings of Chinese companies working on infrastructure projects overseas. The income account will post a huge surplus in the forecast period thanks to the income earned on China's enormous stock of foreign-exchange reserves, which will continue to rise. These inflows will dwarf the income debits associated with the country's large stock of inward foreign direct investment. However, such outflows will grow as the number of foreign firms operating in China expands rapidly and their revenue rises strongly. The current transfers surplus will remain in the black in 2011-15, reflecting the high level of remittances from overseas Chinese.