China's official reserves have ballooned, fueled by strong foreign investment and large trade surpluses. china is a net lender and a creditor nation.
What is trade surpluses ?
A trade surplus is an economic indicator indicating a favorable trade balance where a nation's exports are more than its imports.
When the outcome of the computation above is positive, there is a trade surplus. A trade surplus is the result of a net local money inflow from international markets. It takes place when the outcome of the aforementioned computation is negative and is the opposite of a trade surplus, which denotes a net inflow. The Bureau of Economic Analysis in the US publishes trade balances on a monthly basis. A trade surplus can boost an economy's employment and economic growth, but it can also raise prices and interest rates.
The value of a nation's currency on international markets can also be influenced by its trade balance.
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