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Does a Data Quirk Inflate China’s Travel Services Deficit?

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Abstract

Chinese residents are increasingly traveling to see the rest of the world, logging a total of 162 million foreign visits in 2018, up from 57 million in 2010. Increased travel spending by Chinese residents is acting to reduce the country's trade surplus because such spending is counted as a services import. However, there appears to be a quirk in the Chinese data that results in a significant understatement of the offsetting spending by visitors to China (a services export). According to other Chinese data, this understatement totaled $85 billion in 2018. If so, China's deficit in travel services is smaller than officially reported, and its trade surplus correspondingly larger.

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  • Matthew Higgins & Thomas Klitgaard & Anna Wong, 2019. "Does a Data Quirk Inflate China’s Travel Services Deficit?," Liberty Street Economics 20190807, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:87346
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    Keywords

    China; international trade; service; balance of payments; imports; exports; tourism; current account balances;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General

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