China exports like a trillion dollars of value more than it imports, and it seems to actively maintain this stance - Does it? And if so, why? My reductive ape-brain says if more goods are leaving your country than coming in, then other countries are accumulating actual goods, and your country is accumulating pieces of paper (or digital bits). Seems like a losing strategy.

Why not just make all the goods that your country wants (especially if you're an enormous country that can scale economies and has access to strategic materials like China) and then you'd have more stuff?

And how do currency exchange markets fit in? I thought exporting and importing and fluctuating value of currencies meant that it should all sort of 'balance out' in the end. Because prices of currencies change the value of export/import and consequently you'd eventually have a country that exports and imports the same value of goods.

Maybe I fundamentally misunderstand the purpose of trade. Or maybe I've been playing too much Victoria 3.

  • FuckyWucky [none/use name]
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    edit-2
    2 years ago

    China still has to import stuff like oil, chips etc which they need foreign exchange for. Also, having a ton of forex allows them to protect Yuan against external shocks (look what happened to so many other developing countries when fed raised interest rates) and keep it within the desired band.

    The export oriented economy is what helped bring in foreign capital and technology and recently China has been shifting focus to domestic consumption as well.