Do you ever wonder what happens to the trillions of dollars China earns on foreign trade? President Xi Jinping does.

As the No. 2 economy's current account bulges, opportunities for investing the profit domestically shrivel. Excess cash from exports poured into China's property market before Xi's administration more or less deliberately crashed it six years ago. Few attractions are left, with a 1.7% yield on 10-year sovereign bonds and a stock market that tends to bust after every boom.

The result is massive capital flight, very possibly coming to a data center near you. China ran a record $1.2 trillion trade surplus last year without increasing its official foreign currency reserves, observes Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis.

Between half and two-thirds of that sum was sunk into overseas portfolio investments, increasingly favoring hot-button artificial-intelligence-related stocks and corporate bonds, says Logan Wright, head of China markets research at consultant Rhodium Group. "A striking paradox in global markets today is that China is indirectly driving the American AI boom," he says.

Xi wants some of that money back, but not too much. News emerged last week -- typically through press leaks which Beijing kinda sorta confirmed -- of a new 20% capital-gains tax on the offshore trusts and so-called insurance policies that funnel foreign investments, enforced retroactively in some cases.

Driving this move are two more China paradoxes: The manufacturers bestriding the globe can barely make money at home because a governor in the next province typically wants to subsidize a competitor. Partly as a result, governments are broke. The combined debt of central and regional authorities exceeds 200% of gross domestic product and is growing at least 12% a year, estimates Victor Shih, director of the University of California San Diego's 21st Century China Center.

The offshore tax crackdown is proving to be an effective Band-Aid, says Shuang Ding, chief economist for Greater China at Standard Chartered Bank. Beijing's individual income-tax revenue has jumped 13% this year. It won't hold back the gusher of capital outflow, though, not least because that would bolster a yuan that has already climbed 6% against the dollar over the past year, threatening manufacturing dominance.

"All that money remaining in China would cause a big problem," Garcia-Herrero says. "The real goal is controlling the people who are making the money."

Xi's central bank won't raise interest rates to lure back capital either, because that could dangerously increase government debt service costs, Shih adds.

Speculation that China might "rebalance" in some more systematic way is fading, says Arthur Budaghyan, chief emerging markets and China strategist at BCA Research.

The "anti-involution" campaign -- trumpeted two years ago to trim excess industrial capacity -- has failed in the face of local YIMBYism and the fear of laid-off workers. Shifting to consumption would involve massive social transfers that are off the policy table for now. "So far, they are unwilling to either meaningfully stimulate demand or reduce supply," Budaghyan concludes.

It translates into a global symbiosis of sorts for the moment: The world buys cheap and increasingly superior Chinese goods, China sends the money back to world markets. "We're not seeing the falling skies in China that we were expecting three years ago," says Jonathan Fortun, a senior economist at the Institute of International Finance.

It's a fragile looking symbiosis, though.

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