China is currently experiencing a surplus in its current account and its capital/financial accounts. Which of the following is NOT a contributing factor for this unusual situation?
A) The exceptional growth in the Chinese economy contributes to the current account surplus.
B) The positive prospects for China's continued growth contribute to the capital/financial account surplus.
C) China's inevitable acquisition of Taiwan is driving the market for Chinese investment.
D) All of the above are contributing factors for China's twin surpluses.

Question

Quizplus · Accepted Answer

While the exceptional growth in the Chinese economy and positive prospects for continued growth are contributing factors for China's twin surpluses, the acquisition of Taiwan is not a driving factor. This statement is also not accurate as Taiwan is a sovereign nation and any acquisition by China would be viewed as a violation of international law.

China Is Currently Experiencing a Surplus in Its Current Account