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China set to overtake US as world's biggest goods trader

Publication Date : 04-01-2014

 

The value of trade in China's goods in 2013 is set to exceed that of the United States, making the world's second-largest economy the world's top trader for the first time, certainly in modern times.

"Judging from the current statistics, there is a very high possibility that the value of China's goods trade will have exceeded the US in 2013," said Wang Haifeng, a researcher with the Institute for International Economic Research at the National Development and Reform Commission.

Jia Huaiqin, deputy president of the Statistical Society for Foreign Economic Relations and Trade of China, echoed the view that China's overall goods trade value did overtake the US in 2013 unless there was a late and big fluctuation, China Business News reported.

 Commerce Ministry spokesman Shen Danyang said in late September that thanks to a recovery in the global economy and reform in China, 2013 was likely to see the nation replace the US as the world's largest trader.

In 2009, China became the world's largest exporter and second-largest importer.

In the January-November period, the value of China's goods trade reached US$3.77 trillion, according to the General Administration of Customs.

The country's whole-year goods trade will reach $4.14 trillion, even if the goods trade of December 2013 equaled the $370 billion seen in December 2012 and grows zero per cent. But December usually witnesses robust growth in China's exports and imports. The December year-on-year trade growth registered 32.7 per cent in 2009, 21.4 per cent in 2010, 12.6 per cent in 2011 and 10.2 per cent in 2012.

In the January-October period, the US goods trade registered $3.26 trillion, according to data from the US Bureau of Census. For the US to outnumber China's goods trade value in 2013 at the estimated minimum $4.14 trillion, the world's largest economy will have had to accumulate a trade value of $880 billion in November and December of 2013, which would be a 37.5 per cent jump compared with the $640 billion goods trade value it acquired in the last two months of 2012. The value of the US goods trade did not experience growth above 15 per cent in November or December in recent years.

China is scheduled to announce the 2013 whole-year trade figure next week. The US Department of Commerce will publish its figure in February.

The World Trade Organization said in April 2013 that the value of trade in Chinese goods stood at $3.867 trillion in 2012, second only to the US by just $15 billion, equivalent to about a day-and-a-half of the average daily trade value of China in 2012.

"The size of the value of the trade in goods tells just one side of the story. The other side is that China's export competitiveness, as well as the competitiveness of its trade structure, is far behind the US. The competitive advantage of US exports centers on its technology, quality and brands, with added-value being very significant. China's export prices are much cheaper on average and a large part of its exports are from OEMs (original equipment manufacturers)," Wang said.

"China is catching up in the trade in global goods, but the US still holds the lead," he added.

Although the value of China's goods trade is likely to overtake the US, its trade in services remains less developed.

In 2012, China's trade in services reached $470.58 billion, accounting for about 12 per cent of the value of its goods trade. In contrast, the US trade in services registered $1.07 trillion, about 27.5 per cent of the value of its goods trade.

 

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