Slight Fall of Growth Speed of Bilateral Trade between China and the US in the F

Source: General Administration of Customs Website

According to Customs statistics, the bilateral trade value between China and the US amounted to USD 251.5 billion in the first three quarters of this year, registering a growth of 13.8% over that of the same period last year (the same below) even if the growth rate is 1.7 percentage point lower. The US still remains the second largest trade partner of China but the proportion of China-US trade value among China’s total import and export has decreased from 14.1% last year to 12.8% this year. China exported USD 189.13 billion worth of goods to the US, registering a growth of 11.2%. The growth rate is 4.6 percentage points lower than that of last year but 2.3 percentage points higher than that of the first half of this year. China imported USD 62.37 billion worth of goods from the US, registering a growth of 22.1%. The growth rate is 7 percentage points higher than that of last year but 2.4 percentage points lower than that of the first half of the year. There is a trade surplus of USD 126.76 billion, registering a growth of 6.6% and accounting for 70% of China’s total trade surplus in the same period. In September alone, the bilateral trade value between China and the US amounted to USD 31.81 billion, registering a growth of 16.9%. The exports and imports amounted to USD 24.68 billion and USD 7.13 billion respectively, registering a growth of 15.5% and 22% respectively. The imports and exports have the following characteristics:

I.       Gradual increase of export growth rate and slowing down of import growth rate: as the Chinese Yuan slows down a little bit in its appreciation process against the US dollars in the second half of the year, there has been a gradual increase of growth rate for exports to the US even if it is still obviously behind the growth rate last year. In the first three quarters of the year, China's exports to the US grew by 5.4%, 12% and 15.3% successively while its imports from the US grew by 26.2%, 22.8% and 17.7% successively, showing a slow-down trend.

II.      Slow-down of processing trade exports and higher weight of general trade imports: in the first three quarters of the year, the value of processing trades between China and the US amounted to USD 127.95 billion, registering a growth of 7.6% that is 4.6 percentage points down. It includes USD 112.82 billion in exports, registering a growth of 7.1% that is 5.8 percentage points down, and USD 15.13 billion in imports, registering a growth of 11.4% that is 4.3 percentage points up. In the meantime, the general trades amounted to USD 105.42 billion, registering a growth of 23.3%. It includes USD 69.8 billion in exports, registering a growth of 17.1% that is 3.3 percentage points down, and USD 35.62 billion in imports, registering a growth of 37.5% that is 15.2 percentage points up considerably.

III.    Foreign-funded enterprises account for more than 60% of trade value and exports by private enterprises grow at a reduced rate. In the first three quarters of the year, foreign-funded enterprises contributed USD 161.98 billion to China-US bilateral trade, registering a growth of 12% that is 4.9 percentage points down and accounting for 64.4% of total China-US bilateral trade value. State-owned enterprises contributed USD 41.39 billion to China-US bilateral trade, registering a growth of 9.4% that is 9.3 percentage points up. Private enterprises contributed USD 39.54 billion to China-US bilateral trade, registering a growth of 28.7%. It includes an export value of USD 30.4 billion, registering a growth of 25.1% that is 11.1 percentage points down.

IV.     Four provinces have a US trade value of more than USD 20 billion each. In the first three quarters of the year, Guangdong, Jiangsu, Shanghai and Zhejiang had a US trade value of more than USD 20 billion each, totaling USD 176.41 billion for all four provinces with a growth of 10.3% and a share of 72.3% in China’s total trade with the US. All four provinces exported USD 142.75 billion to the US, registering a growth of 10% that is 7.1 percentage points down. Among the four provinces, Guangdong and Zhejiang exported USD 57.8 billion and 20.1 billion to the US respectively, registering a growth of 7.9% and 8.9% respectively. Jiangsu and Shanghai exported USD 36.52 billion and USD 28.33 billion to the US respectively, registering a growth of 12.8% and 11.6% respectively.

V.      Exports of traditional labor-intensive products are languishing and three of the top nine categories of export goods show a downtrend. In the first three quarters of the year, China exported USD 114.67 billion worth of E&M products to the US, registering a growth of 10.6% that is 5.2 percentage points down and accounting for 60.6% of China’s total exports to the US. The traditional labor-intensive categories of products with an export value of over USD 1 billion each, including textile, garment, furniture, shoe, plastic goods, casing and similar containers, lighting fixture and bedclothes, had a total export value of USD 42.98 billion, registering a growth of only 5.4% that is 13.6 percentage points down. In the meantime, five out of the nine major categories of products (as shown in the following table) exported to the US have seen a slowdown in exports except shoes, textiles, steels and agricultural products that witnessed certain growth. Three categories of products, i.e. garments and apparel attachments, telephones as well as components of automatic data processing equipment, had an export of USD 14.11 billion, USD 6.06 billion and USD 4.17 billion respectively, registering a drop of 2.3%, 21.8% and 10.9% respectively. Automatic data processing equipment and parts as well as furniture had an export of USD 27.61 and USD 7.55 billion respectively, registering a growth of 8.4% and 12.4% that are 2.16 and 5.2 percentage points down respectively.

VI.    Agricultural products account for nearly one-fourth total imports and imports of hi-tech products slow down: in the first three quarters of the year, China imported USD 10.78 worth of agricultural products from the US, registering a growth of 67.3% that is 58.5 percentage points up substantially and accounting for 23.1% of China’s total imports from the US (as against merely 16.8% in the same period last year). Such imports of agricultural products contribute 9.3 percentage points to the growth of imports from the US. Grain imports amounted to USD 6.14 billion, registering a sharp growth of 130%; cotton imports amounted to USD 1.28 billion, slowing down the decrease rate from 38.9% last year to 2.9% this year. Meanwhile, China imported USD 18.92 billion hi-tech products from the US, registering a growth of 3.8% that is 11.8 percentage points down (as shown in the following table).

It is noteworthy that ordinary American citizens feel increasingly uncertain about the scale of the sub-mortgage loan crisis and consumer confidence keeps falling. In September, US commodity retailing fell by 1.2% compared with that of the previous month and this has been the lowest fall since August 2005. Chinese exports are dependent on American consumption to a very large extent and drop in American citizen consumptions will directly affect China’s exports. Despite all the efforts taken by the US government boost the economy, including tax reduction, interest rate cuts, issue of national debts and other fiscal and monetary measures, further recession of the US economy still looms ahead. In that case, trade protectionism may be intensified so that anti-dumping, anti-subsidy and other traditional trade protection measures may be frequently adopted. Meanwhile, the US government may further pressurize China in the protection of intellectual properties, opening of the financial market and various other issues.

Proposals (omitted)