The analysis of balance of payment and twin surplus in China

Abstract

This thesis would discuss the balance of payment (BOP) in China and other relevant economic factors, including exchange rate, trade friction and roots of twin surplus. It would introduce the definition and background of BOP and focus on a special situation in China, twin surplus. After summarizing a number of existing literatures, the thesis proposed two hypotheses about the relationship between the total of current account and financial account and exchange rate; and twin surplus and trade friction. Using the big data from WTO and World Bank with regression model, these hypotheses had been proved in this thesis. In additional, the thesis also explained some descriptive questions, for example, the effects of twin surplus for Chinese market structure.