This paper decomposes and analyzes China's saving-investment imbalance (equivalent to current account imbalance) from 2002 to 2008. We first use the Flow of Funds Accounts to calculate the saving and investment rates (propensity) of the household, corporate and government sectors and to evaluate their relative contribution to the aggregate saving-investment surplus. The results indicate that the increase of saving-investment surplus can be attributed to the steady increase of saving by the house