Relevance: Economy – External Sector (GS-3) • Source: The Indian Express; China Customs Data

China’s trade surplus crossed 1 trillion dollars for the first time in 2024. November surplus alone was 111.7 billion dollars, driven by rising exports to Europe, Southeast Asia, and Australia, while shipments to the United States fell sharply due to tariff tensions.

India–China Trade Snapshot

• India’s trade with China in 2023–24: 118 billion dollars.
  
• India’s trade deficit with China: ≈85 billion dollars, mainly due to high imports of machinery, electronics, and chemicals.
  

India’s Balance of Payments Situation

• Current Account Deficit (CAD): 0.7% of GDP in 2023–24 (≈ 26.5 billion dollars).
  
• Merchandise trade deficit: ≈238 billion dollars.
  
• Services trade surplus: ≈162 billion dollars, cushioning the CAD.
  
• Remittances: Over 120 billion dollars, supporting the BoP and stabilising the rupee.
  

Q. Consider the following statements:

1. China’s trade surplus has reached over one trillion dollars due to strong exports to non-United States markets.
   
2. India’s trade deficit with China forms a major part of India’s overall merchandise trade deficit.
   
3. A current account deficit necessarily indicates a weakening of the national currency.
   

Select the correct answer:
A. 1 and 2 only
B. 2 only
C. 1 and 3 only
D. 1, 2 and 3