China's Gender Imbalance Fuels Surplus

New working paper evidence shows that regions with skewed male–female ratios see higher household savings when families have sons, and that credit favoritism toward state firms forces productive private firms to self‑finance: together these raise national saving and help explain China's persistent current‑account surplus. Short‑term demand stimulus can lower imports and shrink the surplus temporarily, but durable reduction requires reforms that change household incentives and corporate financing access. — If true, this reframes part of the global policy debate: trade tensions with China are not solely about export subsidies or industrial policy but also about deep demographic and financial‑sector distortions that require domestic Chinese reforms.