432 Revista del Instituto Español de Estudios Estratégicos Núm. 2 / 2013 up with the United States if trends in GDP growth continue. After more than 20 years growing at rates of around 10% and higher – which implies that the figure doubles every 7-8 years - GDP growth in China was 9.6% in 2008, 9.2% in 2009, 10.4% in 2010 and 9.3% in 2011. It therefore appears that China has managed to escape unscathed from the effects of the financial crisis that erupted in the United States in September 2008 and spread to most of the world’s developed economies. Like the other major emerging countries, namely Brazil, India and Russia, China has pulled the world economy up during these difficult years. In 2012, GDP growth was “only” 7.8%, which gave rise to a wide debate as to whether China was facing structural difficulties or whether this was merely a temporary slowdown. The debate is beyond the scope of academia, given the systemic importance that the Chinese economy has acquired. This has a significant bearing on our work, as we will demonstrate in part four. Secondly, the table shows how the U.S. Current Account Deficit grew throughout the period and, more importantly, how China’s Current Account Surplus increased alongside it. We will shortly explain the reasons for this and the outlook for what are known as Global Imbalances. The last piece of relevant information is that in 2000, Chinese holdings of U.S. treasuries were 97 billion dollars, while the figure had increased to 1.160 trillion by 2012. As we will explain later on, there is a connection between the two countries’ Current Account Balances and Chinese investment in U.S. treasury securities, and this connection and its evolution will have a major influence on the military strategies of the two countries in the future. 3.2 What are Global Imbalances? In economics, the most common way of measuring the financial position of a country as regards the rest of the world is using the balance of payments (BOP). This is an accounting record of all monetary transactions between a country and the rest of the world. If we have enough information, we can draw up the balance of payments for a set of countries, such as the European Union, for comparison with the rest of the world. Because it is an accounting tool, when all components of the BOP accounts are included they must sum to zero; therefore, the components must be analysed in detail. Although these can be subdivided in more detail if the necessary information is available, the basic components of the BOP are the Current Account, the Capital Account and the Financial Account. The Current Account reflects the inflows and outflows of money generated by imports and exports of goods, services provided to agents of other countries (such as tourism), income to Spaniards from abroad and vice versa and current transfers, such as those made by immigrants living in Spain to their home countries. The Capital Account reflects the inflows and outflows resulting from the movement of capital and money, such as the funds the country receives from the EU or which it pays to NATO for membership of the organisation. Finally, the Financial Account reflects foreign
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