Junior Economist 2020 Economic Basis Test Site Knowledge: Balance of Payments
(1) Balance of payments and balance of payments
Grasp the concept of balance of payments: balance of payments refers to a systematic record of various economic transactions between residents and non-residents of an economy (country or region) in a certain period of time.
Master the concept of balance of payments: balance of payments is a statistical report compiled according to the needs of economic analysis and the classification of specific accounts. It reflects the structure and overall situation of a country's balance of payments.
Master the composition of the balance of payments. Balance of payments accounts are divided into two categories: current account, capital account and financial account.
1. current deposit account
Record the flow of actual resources. Including goods and services, income and current transfers.
(1) Goods and services. Import and export goods are priced at FOB prices.
(2) income. Including employee compensation and investment income.
(3) frequent transfer. It mainly includes remittance, free donation and compensation, including in kind and in the form of funds.
2. Capital and financial accounts
Record the international flow of capital. Including capital account and financial account.
(1) The capital account includes capital transfer and non-production and non-financial assets transactions.
(2) The financial account records the changes of external assets and liabilities of an economic system, including direct investment, securities investment, other investments and reserve assets.
3. Net errors and omissions
China's balance of payments is compiled according to the International Monetary Fund's Balance of Payments Manual. The main difference is that reserve assets are listed separately, so the table includes four items: current account, capital and financial account, reserve assets, net error and omission.
(b) Balance of payments analysis
1. Trade balance
That is, the difference between goods import and export. It reflects a country's industrial structure, the international competitiveness of its products and its position in the international division of labor.
2. Current account balance
The current account balance represents the income and expenditure of the current account and reflects the transnational transfer of actual resources.
3. Comprehensive balance
Check the status of all items except reserve assets. This difference reflects the comprehensive situation of a country's balance of payments and can measure the pressure of balance of payments on a country's reserves.
(C) the adjustment of the balance of payments imbalance
1. foreign exchange buffer policy
Through the change of foreign exchange reserves or temporary borrowing to offset the excess foreign exchange supply and demand, adjust the balance of payments. When there is a deficit, the monetary authorities reduce foreign exchange reserves or borrow temporarily from abroad to sell foreign exchange in the foreign exchange market; When there is a surplus, the monetary authorities increase foreign exchange reserves and buy foreign exchange in the foreign exchange market.
2. Monetary and fiscal policies
Deficit, tight monetary and fiscal policies. When there is a surplus, expansionary monetary and fiscal policies.
Tight monetary policy: sell government bonds in the open market, raise the rediscount rate and raise the statutory deposit reserve ratio.
Tightening fiscal policy: reducing government expenditure and increasing taxes.
3. Exchange rate policy
The government uses the change of exchange rate to adjust the balance of payments. Deficit, devaluation of local currency; Surplus, local currency appreciation.
4. Direct control measures
Direct control measures refer to the policies and measures that the government directly intervenes in international economic transactions, including trade control and foreign exchange control.
The basic principle of balance of payments adjustment is to correctly apply and match various adjustment policies to restore balance of payments with the minimum economic and social costs.