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China rejects status as world's biggest trader

Published on NewsOK Modified: February 19, 2013 at 10:04 am •  Published: February 19, 2013
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"Of course, it is only a matter of time before China becomes No. 1," said Ren.

Behind the headline numbers, China and the United States are drastically different traders.

China is the world's low-cost factory, assembling most of its mobile phones, home appliances and other goods. But its factories need imported technology and components. Much of the value of its exports flows to U.S. and European technology suppliers and to producers of components in Japan, Taiwan, South Korea and Southeast Asia.

That has meant surpluses Asian countries used to run with the United States were shifted to China's column in U.S. national accounts.

By contrast, the United States uses its own technology and adds more value to goods such as jetliners and factory machinery. So it keeps a bigger share of the value of its exports.

American workers also are far more productive. A trade group, the National Association of Manufacturers, says U.S. factories produce goods worth more than China's manufacturing output with about one-tenth as many workers.

Over the past decade, China passed the United States as the biggest market for autos and mobile phones and became the biggest producer of steel and ships. It overtook Japan in 2009 as the second-largest economy.

China also racked up firsts in more contentious areas as the biggest energy consumer and producer of climate-changing greenhouse gases. Beijing initially denied both changes, possibly out of concern they would add pressure for environment controls it feared might hamper economic growth.

As a developing country, China was exempt from emissions limits under the Kyoto Protocol aimed at curbing climate change. Some Western companies complained that gave its manufacturers an unfair price advantage.

The huge volume of China's imports makes it a driver of growth for suppliers of goods from iron ore to computer chips, which is starting to translate into political influence.

Even with growth slower than its double-digit rates of the past decade, China's share of world output and trade is expected to keep rising. Annual growth is forecast at up to 8 percent over the next decade, far above U.S. and European levels.

Chinese leaders are trying to nurture more self-sustaining economic growth based on domestic consumption instead of exports. That might slow demand growth for some raw materials, but China's appetite for other imports could pick up as consumer spending rises.

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Chinese Ministry of Commerce (in Chinese): www.mofcom.gov.cn