3 ms·

But that’s not capital outflow. That’s exporting useless cheap goods for an inflow of capital (USD).

• SgtBastard 4y ago
  All of those exported goods are expected to be sold at a markup in other countries, in that countries currency.
  • chrischen 4y ago
    Exactly, so China exports goods valued at less than markup, and pockets the markup, resulting in a net cash inflow. This is what is referred to by the “trade deficit” between the US and China. The deficit refers to the fact that China is exporting less valuable things and pocketing the money, and not buying back as many US goods, resulting in a deficit that net moves capital to China.