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by lottin 1262 days ago
Trade deficits and capital surpluses go hand in hand. This is easy to see. If the value of your imports exceeds the value of your exports (i.e. you have a trade deficit), the excess imports must be financed somehow—either borrowing money abroad or selling assets (such as equity) to the rest of the world. This results in a net flow of money into the country, i.e. a capital surplus.