Traditional Culture Encyclopedia - Travel guide - What are trade surplus and deficit?

What are trade surplus and deficit?

Surplus and deficit are statistical concepts in international trade. Generally speaking, trade surplus and deficit refer to the statistical comparison of import and export trade volume of a country or region in a period of time (such as a quarter or a year). If the total amount of exports is greater than the total amount of imports, then this "difference" is called "trade surplus"; Conversely, if the total amount of imports is greater than the total amount of exports, then this "difference" is called "trade deficit".

that is, in a certain unit time (usually calculated on an annual basis), both sides of the trade buy and sell various goods, import and export each other, and the export amount of Party A is greater than that of Party B, or the import amount of Party A is less than that of Party B. For Party A, the difference is called trade surplus, whereas for Party B, it is called trade deficit. Generally speaking, as far as the interests of both sides of trade are concerned, the one who gets the trade surplus is the one who takes advantage, while the one who gets the trade deficit is the one who suffers. It can be seen that trade is to make money. On the other hand, the party with a trade surplus has made a net profit; On the other hand, the party with a trade deficit has paid a net amount of money.

when a country has a trade deficit, it means that its foreign exchange reserves are reduced, the international competitiveness of its commodities is weakened, and its foreign trade is at a disadvantage during this period. A large trade deficit will aggravate the outflow of domestic resources and increase foreign debts, which will affect the normal and effective operation of the national economy. Therefore, the government should try to avoid a long-term trade deficit.

Reference: Baidu Encyclopedia-surplus and deficit