020202 Author: Director, Institute of Finance, China Academy of Social Sciences, Wang Guogang The theory of international trade balance is the basic theoretical basis for judging "global economic imbalance". The inherent logical connection is that if the theory of international trade balance is established, all countries and regions participating in international trade should realize the foreign trade balance of their own countries or regions, then the global economy will be in a state of balance; On the contrary, it has broken the balance of international trade and the global economy is in an unbalanced state. According to the theory of international trade balance, this global economic imbalance is not "regular" and should be corrected. So there is a demand for global economic rebalancing. The author believes that the western theory of international trade balance is wrong in theory and practice, and it has not been confirmed by the history of more than 200 years since the first industrial revolution. The main basis is as follows: Theoretically, the theory of international trade balance has a series of assumptions, but these assumptions do not exist in reality, which determines that the theory of international trade balance is fictitious and does not conform to the actual situation of international trade development. Specifically: First, the international currency was unreasonably abandoned. Although the theory of international trade balance shows the trend of international trade balance between countries and regions in a model way, it omits the international monetary factors needed in this kind of transaction, which is not in line with the actual situation of international trade. If international monetary factors are added, international trade imbalance will inevitably occur. We assume that the international trade volume in the first year is 100, and the international trade volume in the second year will increase by 10% compared with the first year. Under the condition that the speed of international currency circulation remains unchanged, it is necessary to increase the international currency 10% to realize the international trade volume in the second year. Assuming that the international currency is the currency of country A, how should country A put the international currency corresponding to the international trade growth of 10% into international trade? As far as international trade is concerned, there is only one way for country A to buy goods and services from the international market, so it can only be in a deficit state in foreign trade. Because country A is in a state of trade deficit, there are bound to be many countries or regions in a state of foreign trade surplus, so it is impossible to balance international trade between countries and regions. Second, it violates the essential requirements of the market mechanism. Consistent with other theories in western economics, the theory of international trade balance also chooses the identity of supply and demand, but this identity of supply and demand does not meet the basic requirements of market mechanism in essence. Under the condition of constant supply and demand, competition cannot be effectively carried out, survival of the fittest cannot happen, and innovation and development cannot be discussed. Market economy is essentially an overproduction economy. Only when the supply exceeds the demand will there be such a situation: under the condition of not seriously affecting the relationship between supply and demand, manufacturers will be forced to innovate and develop continuously, and efficiency will be improved through the survival of the fittest. This pattern of oversupply is the basic condition for the formation of a buyer's market, which exists in a country (and region) and is also applicable to the field of international trade. The so-called identity of supply and demand is actually an identity of economic stagnation, not the target model (or ideal model) pursued by human economic development. Therefore, the theory of international trade balance is based on this identity, which itself does not meet the essential requirements of market economy. Third, the differences in resource endowments between countries and regions should not be abandoned. Some countries or regions are short of natural resources, so they choose the development model of "two heads are outside". For these countries or regions, if foreign trade is balanced, economic growth and even economic development will encounter serious difficulties. Suppose a country's import and export volume in the first year is 500 billion US dollars, and there is no foreign exchange reserve, foreign capital introduction and overseas loans. Under the most ideal international trade conditions (such as the price, structure, performance and transportation conditions of resources purchased from the international market, etc.), the country's growth rate in the second year is zero. This means that once the terms of trade in the international market deteriorate, the country's economy will show a negative growth trend. An important condition for these countries or regions to maintain sustainable economic development is the foreign trade surplus. Because of the need to maintain economic development through foreign trade surplus, some countries are bound to be in the trend of foreign trade deficit, resulting in international trade imbalance. Fourth, the development differences between countries and regions should not be abandoned. The theory of international trade balance is actually a theory to maintain the position of developed countries in the international trade market, which ignores the differences in the development level between countries and regions. After World War II, the development history of many countries and regions proved that when developing countries started their economies, most of them chose the import route of introducing advanced overseas equipment, technology, management and experience to alleviate the shortage of domestic economy and narrow the gap with developed countries. During this period, most of their foreign trade showed a deficit trend. In order to meet the needs of imported equipment and technology, they not only tried to export more, but also chose policies such as introducing foreign capital, borrowing overseas and using precious metal reserves. With the continuous improvement of production capacity, the improvement of import substitution, the improvement of domestic supply and demand shortage and the improvement of international competitiveness of products, the amount of their products entering the international market has gradually increased, and the export-oriented strategy has achieved results. As a result, the foreign trade deficit turned into a foreign trade surplus. Fifth, we should not give up the production capacity formed by foreign investment in various countries and regions. Since the19th century, developed countries such as Britain have invested heavily overseas and transferred their production capacity to other countries or regions. On the one hand, they expanded the overseas commodity sales market, on the other hand, they used overseas low-cost resources to produce products and sell them to their own countries, which aggravated the global economic imbalance. In the 60 years after World War II, this situation became more serious. Investing in production in other countries and regions has become an important measure to bypass trade protection barriers. The theory of international trade balance abandoned this measure, making it far away from international trade practice and becoming useless empty rhetoric. From a practical point of view, since the19th century, there has never been a year of foreign trade balance among countries and regions in the field of international trade. Moreover, with the growth and expansion of international trade volume, the trade imbalance between countries and regions has expanded. Specifically: First, the trade balance between global economies tends to expand. In this context, it is not in line with the trend of global economic development to put forward or even hope for global economic balance. Second, countries and regions that lack natural resources tend to increase their trade surplus. Third, the outward migration of production capacity in developed countries has led to a foreign trade deficit. Developed countries use the foreign investment mechanism to transfer their production capacity abroad, which not only enhances the production capacity of developing countries and expands their market share in developing countries, but also enhances their export capacity based on the geographical map of developing countries, making developed countries change from trade surplus countries to trade deficit countries. To sum up, the theory of international trade balance is logically untenable, because it abstracts the most basic factors; Compared with the unbalanced development trend of international trade in reality, it has a series of serious mistakes and cannot effectively explain the numerous changes and development trends of the international market. Therefore, it should not be used as the basic basis for understanding and grasping international trade activities, let alone as the main basis for formulating relevant policies.