Date
22 October 2017
China racked up US$4.16 trillion in international trade in 2013. Photo: Bloomberg
China racked up US$4.16 trillion in international trade in 2013. Photo: Bloomberg

Trading places: China in the front seat on imports, exports

China became the world’s biggest trader in goods for the first time last year, edging out the United States’ estimated 2013 total by about US$250 billion.

Thirty-five years after opening up, China was able to export US$2.21 trillion worth of goods and import US$1.95 trillion worth, according to The Economist. Added together, its international trade in goods amounted to US$4.16 trillion for the year.

The world’s second-largest economy raised its exports by 7.9 percent, while imports increased by 7.3 percent, with total trade up 7.6 percent from 2012, according to Zheng Yuesheng, chief statistician of the General Administration of Customs in Beijing, which released the information Friday.

Still, the milestone is not without its skeptics, as the accuracy of Chinese trade data and economic statistics over recent months has proven less than factual.

In the first quarter of 2013, China’s export growth unexpectedly accelerated even as shipments to the US and Europe fell, spurring Bank of America Corp. and Mizuho Securities Co. analysts to say the figures were inflated by fake reports. The 14.7 percent increase, reported by Customs, was led by a 57.2 percent jump in shipments to Hong Kong that highlighted suspicions of false transactions used to mask capital flows into China, Bloomberg reported.

At the time, Royal Bank of Scotland said export gains may have been overstated by as much as 9 percent.

Gordon Chang, a well-known China critic notorious for predicting its downfall just about every year since he wrote The Coming Collapse of China in 2001, wondered if other false numbers lurked in the ledgers.

Even Li Keqiang {李克強}, with a PhD in economics, has expressed concern over the accuracy of China’s financials. Before becoming premier, he questioned the reliability of Chinese GDP.

Disbelievers notwithstanding, analysts say that, even if exports were accurately reported, China would still take the crown from America. They said that when the Department of Commerce releases 2013 trade figures in February, we will see that China topped the US total by about US$250 billion.

“Just about everyone makes the reasonable-sounding argument that Beijing’s numbers, as atrocious as they are, cannot possibly be a quarter of a trillion dollars off,” Chang said.

According to the World Trade Organization, the total value of China’s goods trade in 2012 trailed the US figure by just US$15 billion, or roughly a day and a half of China’s average daily trade value that year.

Despite everything, China Customs stands by its official numbers, with statistician Zheng expecting a stronger showing in 2014, “thanks to an improving world economy, the impact of structural reforms in China and a lowered outlook for commodity prices, which will help offset rising costs of labor and financing for Chinese manufacturers.”

China’s rise to dominance of world trade has happened over a very short period, with the value of Chinese trade roughly doubling every four years over the past three decades, according to the Financial Times.

The country became the world’s biggest goods exporter in 2009 and Chinese imports and exports now account for more than 10 percent of global goods trade, up from just 3 percent in 2000.

According to Zheng, trade with the European Union (EU), China’s biggest trade partner, edged up 2.1 percent year on year to US$559.1 billion in 2013. China exported US$339 billion worth of goods to the EU, while importing US$220.1 billion worth.

Joshua Keating, international affairs writer at Slate, notes that China last year eclipsed the United States as the world’s most prominent trading partner. In 2006 the US. was the larger trading partner for 127 countries, versus just 70 for China. In 2012 it was 124 for China, 76 for the U.S.

That said, “not all trade is made completely equal. Most Chinese trade is still in low-end goods despite heavy investments in technology, aerospace and automobiles,” Keating said.

SK

 

A strategist and marketing consultant on China business

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