IMF in the context of "Trade deficit"

The People's Republic of China has a developing mixed socialist market economy, incorporating industrial policies and strategic five-year plans. China has the world's second-largest economy by nominal GDP and since 2016 has been the world's largest economy when measured by purchasing power parity (PPP). China accounted for 19% of the global economy in 2022 in PPP terms, and around 18% in nominal terms in 2022. The economy consists of state-owned enterprises (SOEs) and mixed-ownership enterprises, as well as a large domestic private sector which contribute approximately 60% of the GDP, 80% of urban employment and 90% of new jobs.

China is the world's largest manufacturing industrial economy and exporter of goods. China is widely regarded as the "powerhouse of manufacturing", "the factory of the world" and the world's "manufacturing superpower". Its production exceeds that of the nine next largest manufacturers combined. However, exports as a percentage of GDP have steadily dropped to just around 20%, reflecting its decreasing importance to the Chinese economy. Nevertheless, it remains the largest trading nation in the world and plays a prominent role in international trade. Manufacturing has been transitioning toward high-tech industries such as electric vehicles, renewable energy, telecommunications and IT equipment, and services has also grown as a percentage of GDP. However, recent research indicates that China’s Total factor productivity (TFP) growth has slowed significantly. IMF estimates show that TFP growth declined from approximately 3.7% in the 2000s to around 1.9% during 2010–2019. Structural reforms and technological progress in manufacturing between 2010 and 2020 contributed only modestly to productivity gains. Additionally, a 2024–2025 IMF working paper finds that factor misallocation resulting from industrial and regulatory policies implemented since the early 2010s reduces China’s aggregate TFP by roughly 1.2% annually. IMF research suggests that while China’s state-led push for high-tech self-reliance since 2013 has supported rapid innovation, it has been accompanied by efficiency losses. Policy measures, including targeted state subsidies appear to favor politically connected firms, crowd out competition, and lead to overcapacity, undermining overall productivity. China is the world's largest high technology exporter. As of 2023, the country spends around 2.6% of GDP to advance research and development across various sectors of the economy. It is also the world's second-largest importer of goods. China is a net importer of services products.

Regional development refers to a broad category of policies aimed at reducing regional disparities within an economy or across economies by devoting resources to underdeveloped areas. Regional development can be national or international in nature. Therefore, the implications and scope of regional development may vary according to the definition of a region and how the region and its boundaries are perceived internally and externally.

In the past, regional development tended to center mostly on inward investment within national economies (OECD,2020). In recent decades, however, regional development has taken on an increasingly international character. For example, organizations such as the OECD, UN, and IMF have stepped up various forms of economic assistance to less developed regions.

A trade agreement (also known as trade pact) is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that help them trade with each other. The most common trade agreements are of the preferential and free trade types, which are concluded in order to reduce (or eliminate) tariffs, quotas and other trade restrictions on items traded between the signatories.

The logic of formal trade agreements is that they outline what is agreed upon and specify the punishments for deviation from the rules set in the agreement. Trade agreements therefore make misunderstandings less likely, and create confidence on both sides that cheating will be punished; this increases the likelihood of long-term cooperation. An international organization, such as the IMF, can further incentivize cooperation by monitoring compliance with agreements and reporting third countries of the violations. Monitoring by international agencies may be needed to detect non-tariff barriers, which are disguised attempts at creating trade barriers.

Sterling (symbol: £; currency code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound is the main unit of sterling, and the word pound is also used to refer to the British currency generally, often qualified in international contexts as the British pound or the pound sterling.

Sterling is the world's oldest currency in continuous use since its inception. In 2022, it was the fourth-most-traded currency in the foreign exchange market, after the United States dollar, the euro, and the Japanese yen. Together with those three currencies and the renminbi, it forms the basket of currencies that calculate the value of IMF special drawing rights. As of late 2022, sterling is also the fourth most-held reserve currency in global reserves.

In macroeconomics and international finance, a country's current account records the value of exports and imports of both goods and services and international transfers of capital. It is one of the two components of the balance of payments, the other being the capital account (also known as the financial account). Current account measures the nation's earnings and spendings abroad and it consists of the balance of trade, net primary income or factor income (earnings on foreign investments minus payments made to foreign investors) and net unilateral transfers, that have taken place over a given period of time. The current account balance is one of two major measures of a country's foreign trade (the other being the net capital outflow). A current account surplus indicates that the value of a country's net foreign assets (i.e. assets less liabilities) grew over the period in question, and a current account deficit indicates that it shrank. Both government and private payments are included in the calculation. It is called the current account because goods and services are generally consumed in the current period.