Friday, February 11, 2011

Exports to China Surge to Record Level in Dec. ($10B); Exports to China Have Grown Faster (19%/yr.) Than Imports (13.8%/yr.) Since 2000

Obama says he wants to double exports in the next five years to create U.S. jobs.  According to data released today by the BEA (available here), U.S. exports to China surged to $10.12 billion in December, a new monthly record, and more than double the $4.6 billion in February 2009, less than two years ago.  In fact, exports to China have more than tripled since January 2006, slightly less than five years ago.  And this apparently happened without any special help from Obama or Bush, it most likely happened because China's economy is booming.

Updated with Annual Data: And as much as we continually hear about China's currency manipulation to artificially increase its exports to the U.S., the chart below shows something very interesting.  When annual exports of China and imports from China are both normalized to equal 100 in January 2000 (when imports were $100 billion and exports were only $16 billion), we can see that exports to China have actually grown much faster (+19% per year) than imports from China (13.8% per year).  We could also say that in 2000, there were $6.25 of imports from China for every $1 of exports to China, and by 2010 the ratio of China imports-to-China exports had fallen to 4. 


HT: Robert Kuehl

17 Comments:

At 2/12/2011 7:22 AM, Blogger Anonymous said...

This is very interesting. It raises a few questions in my mind:

1) How much of the growth in exports to China is food? and of that,

2) How much is price vs. volume, and of that,

3) How much of the food price was driven by our crazy ethanol policies?

Wouldn't it be ironic if a misguided energy policy happened to satisfy a misguided trade policy?

 
At 2/12/2011 7:45 AM, Blogger Terry said...

Mark
Exports for 2010 were 91,878 Billion
Imports for 2010 were 364,943 Billion

A surge in a small number represented on a graph with a substantial growth of a large number using a normalized scale is misleading

 
At 2/12/2011 11:13 AM, Blogger Dr William J McKibbin said...

Nevertheless, the US trade deficit widened to $40.6 billion in December 2010 -- more at:

http://www.cnbc.com/id/41529859

Hype and propaganda are not going to be enough to reverse our nation's economic woes -- not this time...

 
At 2/12/2011 1:23 PM, Blogger Che is dead said...

I think that some may be missing the point. When trade was initiated with China they were simply too poor to consume U.S. trade goods in any meaningful way. However, as they have become a richer country they have begun to purchase U.S. trade goods in ever increasing quantities. Dr. Perry's post simply highlights that trend. Over time trade with China will tend to equalize and both of us will be richer for it.

 
At 2/12/2011 1:38 PM, Blogger Buddy R Pacifico said...

"China has introduced a number of policies aimed at increasing the level of scientific and technological innovation that originates within the country, as well as increasing the domestic
share of the value embodied in goods made by Chinese companies.
In a nutshell, China would like to shift from “made in China” to “created in China". 12 Policy arenas through which China is implementing indigenous innovation related policies include government procurement, technical standards, and the enforcement of
China’s Anti-Monopoly Law (AML)."


The above quote is from The U.S. International Trade Commission Publication 4199, November 2010.

America's strongest export to China is now soybeans. The fastest growing exports from the U.S. to China is waste such as pulp and metal scrap. So, China seems to have a national policy to turn imports from the U.S. into the type from a Third World country and not an advanced economy.

 
At 2/12/2011 2:00 PM, Blogger Che is dead said...

Nice try, but categorizing agricultural exports from the U.S. farm industry, the most technologically sophisticated agriculture industry in human history, as "third world" exports just doesn't cut it. And your argument about turning, " ... imports from the U.S. (or any other country) into the type from a Third World country ..." fails to take into account the complexity of our trade with China. As this article, mentioned previously by Dr. Perry, points out:

Trade statistics in both countries consider the iPhone a Chinese export to the U.S., even though it is entirely designed and owned by a U.S. company, and is made largely of parts produced in several Asian and European countries. China's contribution is the last step—assembling and shipping the phones.

So the entire $178.96 estimated wholesale cost of the shipped phone is credited to China, even though the value of the work performed by the Chinese workers at Hon Hai Precision Industry Co. accounts for just 3.6%, or $6.50, of the total, the researchers calculated in a report published this month. ...

Conventional trade figures are the basis for political battles waging in Washington and Brussels over what to do about China's currency policies and its allegedly unfair trading practices.

Not Really 'Made in China' , WSJ

Chinese government policy currently subsidizes exports to the U.S. at the expense of their own people. This is extremely advantageous to us, particularly those of us in the lower income quintiles. Why all the whining?

 
At 2/12/2011 2:12 PM, Blogger Buddy R Pacifico said...

Che is ...,

Strongly recommend that you read the USITC Report that I linked to. Your last comment shows a lack of knowledge in the area of State Owned Enterprises (SOE) in China and the drive for high-tech industry (champions) in China. U.S. ag is highly efficient within the ag world but it is laughable to present soybean producers as a high-tech industry.

 
At 2/12/2011 3:11 PM, Blogger Che is dead said...

Actually, I did look at it. I strongly recommend that you think about what intellectual property rights infringement in China means, not just for U.S. companies, but for any hope the Chinese have of inducing true "indigenous innovation". The Chinese will not be able to steal or sue their way into world economic leadership. The SOE "industry champion" model is simply another rip-off of the South Korean model, and it is more likely to effect industries in neighboring asian countries than those in the U.S.. Further, singling out large state owned firms as "national champions" has the effect of denying capital to the small business sector where real innovation thrives. Name a single product conceived, engineered and produced in China that the rest of the world wants to buy? All of these policies are efforts to address China's economic weaknesses not to project their strengths.

 
At 2/12/2011 4:54 PM, Blogger Che is dead said...

... it is laughable to present soybean producers as a high-tech industry.

Really, tell that to the bio-engineers at Monsanto, the mechanical engineers at CAT, or the chemists at Dow Chemical just to name a few.

 
At 2/12/2011 8:39 PM, Blogger soups said...

China’s Innovative Beggar-thy-neighbor Strategy!

Insanity: doing the same thing over and over again and expecting different results. – Albert Einstein

As long as the United States continues to allow China to manipulate the U.S. Dollar and therefore manipulate our trade with ALL our trading partners:
- our balance of trade with ALL our trading partners will be worse than it would otherwise be.
- free trade agreements will work to our disadvantage and we should halt entering into new ones.

China’s beggar-thy-neighbor strategy is not a competitive devaluation of its currency, which would only cheapen its exports and make exports into China more expensive, but an over-valuation of the currencies of one or more of its trading partners. This negatively affects all the trade of the pegged trading partner(s), not just trade with China. U.S. Dollar over-valuation was 8 times as damaging to the U.S. recovery as what the media refers to as “China keeping it currency undervalued”.

A link to my submission for the record for the September 15, 2010 Hearing on China’s Exchange Rate Policy, follows:

http://waysandmeans.house.gov/hearings/Testimony.aspx?TID=9666

An Inflation-Neutral Balanced Trade System (BTS), inspired by Warren Buffett’s 2003 Import Certificate Plan is introduced at the top of page 4 of the Pdf.

 
At 2/12/2011 8:40 PM, Blogger soups said...

China’s Innovative Beggar-thy-neighbor Strategy!

Insanity: doing the same thing over and over again and expecting different results. – Albert Einstein

As long as the United States continues to allow China to manipulate the U.S. Dollar and therefore manipulate our trade with ALL our trading partners:
- our balance of trade with ALL our trading partners will be worse than it would otherwise be.
- free trade agreements will work to our disadvantage and we should halt entering into new ones.

China’s beggar-thy-neighbor strategy is not a competitive devaluation of its currency, which would only cheapen its exports and make exports into China more expensive, but an over-valuation of the currencies of one or more of its trading partners. This negatively affects all the trade of the pegged trading partner(s), not just trade with China. U.S. Dollar over-valuation was 8 times as damaging to the U.S. recovery as what the media refers to as “China keeping it currency undervalued”.

A link to my submission for the record for the September 15, 2010 Hearing on China’s Exchange Rate Policy, follows:

http://waysandmeans.house.gov/hearings/Testimony.aspx?TID=9666

An Inflation-Neutral Balanced Trade System (BTS), inspired by Warren Buffett’s 2003 Import Certificate Plan is introduced at the top of page 4 of the Pdf.

 
At 2/13/2011 4:25 AM, Blogger Ron H. said...

Soups,

I believe you have posted this exact comment before. Apparently none of the responses you got caused you to rethink your strange ideas.

I don't believe China has any representation on the Federal Reserve Board of Governors, so It's not clear what direct effect they can have on the value of the USD.

"- free trade agreements will work to our disadvantage and we should halt entering into new ones."

Will you explain how this can be true?

 
At 2/13/2011 9:17 AM, Blogger Scott said...

Viewing the import/export data as a "rate" maybe useful to some, but also easily deceptive. Imports increased $265 billion (365-100), while exports increased $76 billion. If the "rates" of 13% and 19% stayed the same, the gap between imports/exports would still get bigger, not smaller due to headstart of imports. Nominal dollars matter, rates do not.

 
At 2/13/2011 3:44 PM, Blogger David said...

Detail on the mix of types of goods/commodities being exported to and imported from China here. (From 2009, but doubt if the mix has changed all that much)

 
At 2/13/2011 3:46 PM, Blogger David said...

Also, some state-specific data.

 
At 2/13/2011 4:25 PM, Blogger Buddy R Pacifico said...

David, the 2010 U.S.Export rankings to China are now in. Oilseeds (Soybeans) are #1 Export to China for 2010. The list is interesting because nuclear equipment is #2 but new nuclear plants in the U.S. are rare.

 
At 2/13/2011 4:36 PM, Blogger Buddy R Pacifico said...

To U.S. Import from China is Electrical Machinery and number two is Nuclear Machinery.

Both China and U.S. have #2 rankings for Exports to each other as Nuclear Machinery! -- interesting.

 

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