China Trade Dwarfs US - Growth

Chinese Trade Accelerates

Jun 23, 2006

To understand China's dominance in world trade, we'll look at its fastest growing exports. For America, China's powerful trade position is particularly problematic.

In 2004, China became the world's number one exporter of technology products used for information and communication purposes. Products include laptop computers, mobile phones and digital cameras.

Including both imports and exports, China's share of global trade in these technology products increased almost ten-fold to US$329 billion in 2004 from $35 billion in 1996. America's share of trade for these product categories grew by only 63 percent over the same period.

According to the Organization for Economic Co-operation and Development, growth in the amount of technology products that China exports to and imports from other Asian countries continues to accelerate.

At the same time, the People's Republic is doing less business with the U.S. and European Union countries for electronic components including computer chips used to make laptops and and mobile phones.

China's trade shift to Asia may in part explain flattening revenues for top U.S. chipmaker Intel, which has seen its stock price slump recently.

And The Winners Are...

In contrast, Japan has increased to 20 percent its share of total electronic components exported to China. China itself is manufacturing and exporting more electronics than ever, to a point where electronic components now represent China's second-largest export (after computer and related equipment).

The lists below give us perspective on the growth in Chinese exports from 2004 to 2005 by product category. Amounts shown are for 2005 in $US billion, with the percentage change from 2004 in brackets.

China's Top Exports to the World

The above list shows that Chinese exports for optics & medical equipment, chemicals, plastics and iron have the highest growth rates.

And it's not just information and communication technology manufacturing where China is staking its world leadership position. The list also reveals that all other product exports are growing at a healthy clip; no product category listed has increased less than a robust 20 percent.

American and other Western companies in all sectors would do well to check themselves to see how they can best fit into - and excel within - a global trade picture that increasingly is tilted towards the People's Republic.

Sources: Organisation for Economic Co-operation and Development, PRC General Administration of Customs, China's Customs Statistics

The copyright of the article China Trade Dwarfs US - Growth in Import/Export is owned by Daniel Workman. Permission to republish China Trade Dwarfs US - Growth in print or online must be granted by the author in writing.