How the world trade with China stacks up

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: Trade frictions with China continue to make headlines. Much has been said on USA levying 35% tariff on Chinese tyres, or anti-dumping duty imposed by EU on China-made fastners, or how US stocks slide as its trade tensions escalate with the far-eastern country. However, one earlier report did not get the attention it deserves: in H-1 of 2009 China for the first time has overtaken Germany and become the world’s largest exporter. China’s spectacular ascent as a ‘trade superpower’ is reflected in the massive eight-fold jump in its trade turnover from $324 billion in 1998 to $2.6 trillion in 2008. Export from China significantly improved its share in worldwide total from 3.4 to 9%, while its rank among leading exporters raced from 9 to 2 in the same period. Import of China as a proportion of global total also moved up from 2.5 to 7% with its world rank going up from 11 to 3. Post-entry into the WTO, China’s trade recorded over 26% average annual growth and quadrupled in 2002-2008.

Share of select partners in China’s total trade (%)

In the backdrop of such an amazing growth story, it would be interesting to see how the direction and structure of China’s trade has changed in recent years. China now trades with 200-plus countries. In 2002-2008 several non-traditional partners like Africa, Latin America, Australia and BRI(C) countries have made their presence felt in China’s overall trade, as the pre-eminent position of USA, Japan and Hong Kong shrank. Europe now occupies a higher share while expansion in China’s trade with ASEAN and South Korea has remained relatively subdued in this period. China-ASEAN trade was up by 14% and reached $231 billion last year. Substantial opportunities for further enhancing the trade volume would arise as the free trade area between the two economies becomes operative from 2010. The China-ASEAN FTA will create a combined GDP of nearly $6 trillion and cover a population of 1.9 billion, and become the world's third largest FTA.

Success in diversification of export