China surpassed the US to become the world’s biggest trading nation last year as measured by the sum of exports and imports, ending the US supremacy in global commerce that emerged after the end of World War II in 1945.
US exports and imports last year totaled $3.82 trillion, the US Commerce Department said yesterday. China’s customs administration reported last month that the country’s total trade in 2012 amounted to $3.87 trillion. China had a $231.1 billion annual trade surplus while the US had a trade deficit of $727.9 billion.
China’s emergence as the biggest global trading nation gives it increasing influence, threatening to disrupt regional trading blocs as it becomes the most important commercial partner for countries including Germany, which will export twice as much to China by the end of the decade as it does to neighbouring France, said Goldman Sachs’ Jim O’Neill.
“For so many countries around the world, China is becoming rapidly the most important bilateral trade partner,” O’Neill, chairman of Goldman Sachs’s asset management division and the economist who bound Brazil to Russia, India and China to form the BRIC investing strategy, said. “At this kind of pace by the end of the decade many European countries will be doing more individual trade with China than with bilateral partners in Europe.”
China began focusing on trade and foreign investment to boost its economy after decades of isolation under Chairman Mao Zedong. Economic growth averaged 9.9 percent a year from 1978 through 2012. China became the world’s biggest exporter in 2009, while the US remains the biggest importer, taking in $2.28 trillion in goods last year compared with China’s $1.82 trillion of imports. HSBC forecast last year that China would overtake the US as the top trading nation by 2016.
China was last considered the leading economy during the height of the Qing dynasty. The difference is that in the 18th century, the Qing Empire -- unlike rising Britain -- didn’t focus on trade. The Emperor Qianlong told King George III in a 1793 letter that “we possess all things. I set no value on objects strange or ingenious, and I have no use for your country’s manufactures.”
More Involved
Now China is the biggest energy user, has the world’s biggest car market and has the world’s largest foreign currency reserves.
The trade figures underscore the need to draw China further into the global financial and trading architecture that the U.S. helped create, O’Neill said.
“One way or another we have to get China more involved in the global organizations of today and the future despite some of their own reluctance,” said O’Neill said, mentioning China’s inclusion in the International Monetary Fund’s Special Drawing Rights currency basket. “To not have China more symbolically and more importantly actually central to all these things is just increasingly silly.”
Last month China’s trade expanded more than estimated, with exports rising 25 percent from a year earlier and imports increasing 28.8 percent, government data released yesterday showed. China’s trade figures in January and February are distorted by the week-long Lunar New Year holiday that fell in January of last year and started today.
