paper takes the panel data of 29 provinces, municipalities and autonomous
regions in China as samples from 1994 to 2015, using dynamic panel GMM to analyze
the relationship between China’s population age structure, the real effective
exchange rate and current account balance. System generalized method of moments
and robustness test show that the adjustment of China’s current projects has
obvious inertial characteristics; the change of population age structure has
significant negative influence on the current account balance, the impact of
youth dependency ratio on the current account is not significant, the elderly
dependency ratio has a significant negative impact on current account; the effect
of the real effective exchange rate on current account is not significant, the
“Theory of Exchange Rate Manipulation in the Chinese Government” is not valid
and untenable. The conclusion of this paper shows that the change of population
age structure is an important reason for the long-term surplus of China’s
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