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China’s Trade, Exports, and Imports

China’s Trade, Exports, and Imports

China’s main imports are electrical and mechanical products as well as high-tech goods. As of July 2019, the imports had declined by 5.6% to $176.5 billion (World Fact Book, 2019). This percentage was less than the 8.3% that was expected. The fall in imports was the third in a row between May and July and was suggestive of a sluggish domestic demand, which could result in more stimuli added by Beijing. Demand for unwrought copper fell by 7.1%, while that of crude oil fell by 14%. China’s key import partners include the US, Australia, Germany, the EU, and ASEAN countries, including Taiwan, Japan, South Ore, and Malaysia (Trading Economics, 2019).

The export market has played a vital role in China’s rapid economic expansion. The main exports from the country include integrated circuits, generators and motors, ceramic and plastic products, furniture, footwear, textiles, clothing, high-tech products, and electrical and mechanical products (World Fact Book, 2019). As of July 2019, the export volumes rose by 3.3% compared to the previous year, following a 1.3% decline in June. The growth was realized despite the increasing trade tensions between China and the US. However, this growth in exports is projected to be short-lived as more tariffs are set to be imposed by the US on the 1st of September 2019 (Trading Economics, 2019). The main export partners to China include the Netherlands, the UK, Germany, the EU, Hong Kong, the US, India, South Korea, Japan, Vietnam, and other ASEAN countries (Trading Economics, 2019).

Exports are most times reported as a GDP percentage in evaluating their magnitude in relation to an economy’s size. Where exports are 15% or less of the GDP, the economy is described as being closed, while the opposite is true. Exports of services and goods represent the value of the same provided in the international market and include the value of freight, merchandise, transport, insurance, license fees, travel, and royalties, among others (The Global Economy, 2019). The export of goods as a GDP percentage for China averaged 14.22% for the years between 1970 and 2018. The Export GDP percentage in 2016 was 20% of GDP, a fall from 36% recorded in 2006. This means that China, though tilting more toward consumption rather than investment, is an open economy (Rasmi, 2019).

China’s exports rose while imports declined as of May 2019, which created a trade surplus of $41.7 billion (White, 2019). The country, though classified as developing, does not depend on imports more than it does its exports. This means that China has a trade surplus (Lee, 2019). However, the looming implementation of stricter tariffs by the US has the potential to affect global economics. In May 2019, China’s imports from the US decreased by $18 Billion, which shows a weakening of demand. A slowing down of the country’s economy can have a negative impact on the world’s economy in the future (White, 2019).

China has experienced an approximate 10% annual growth over the last two decades. This has resulted in the emergence of a middle class similar to that in the US and Europe. The younger generations, driven by economic and cultural changes, are sensitive to environmental and social issues (Qiao et al., 2016).  As a consequence of these, fair trade has gained prominence in the country. Fairtrade in China describes a scenario where exporters from developing nations are paid higher for their products, factoring in the workers (for example, workers who harvest coffee beans) who are expected to be paid a wage higher than the bare minimum. China purchases fair trade goods out of an attitude that all workers should be paid a fair price and not exploited, and also because of the country’s philanthropic beliefs (Trade for Development Center, 2013).  Fairtrade products thus have premium prices that the middle class can afford (Yang et al., 2012).

References

Lee, Y.N. (2019). China says its first-quarter GDP grew by 6.4 percent, topping expectations. https://www.cnbc.com/2019/04/17/china-reports-first-quarter-gdp-march-industrial-output-retail-sales.html#targetText=China%20on%20Wednesday%20released%20a,polled%20by%20Reuters%20had%20expected.

Qiao, Y., Halberg, N., Vaheesan, S., & Scott, S. (2016). Assessing the social and economic benefits of organic and fair trade tea production for small-scale farmers in Asia: a comparative case study of China and Sri Lanka. Renewable Agriculture and Food Systems31(3), 246-257.

Rasmi, A (2019). In 2018, China’s economy grew at its slowest pace in nearly 30 years https://qz.com/1527008/chinas-final-2018-economic-numbers-will-be-shaky/

The Global Economy (2019). China: Exports, percent of GDP. https://www.theglobaleconomy.com/China/Exports/

Trade for Development Center (2013). https://www.befair.be/drupal_files/public/all-files/brochure/Fair%20trade%20in%20China_EN.pdf

Trading Economics (2019). China Imports. https://tradingeconomics.com/china/imports#targetText=China%20Imports,aluminum%20being%20the%20most%20important.

White, M(2019). China trade surplus has fallen dramatically-but that doesn’t mean China is winning, experts say. https://www.nbcnews.com/business/business-news/china-trade-surplus-has-fallen-dramatically-doesn-t-mean-china-n1015756

World Fact Book (2019). East Asia/South East Asia: China. https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

Yang, S. H., Hu, W., Mupandawana, M., & Liu, Y. (2012). Consumer willingness to pay for fair trade coffee: a Chinese case study. Journal of Agricultural and Applied Economics44(1), 21-34.

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Question 


China's Trade, Exports, and Imports

China’s Trade, Exports, and Imports

Reading:

Wheelan, C. (2010). Naked economics: Undressing the dismal science.

  • Chapter 9: Keeping Score
  • Chapter 11: International Economics
  • Chapter 12: Trade and Globalization

Bonello, F., & Lobo, I. (2015). Taking sides: Clashing views on economic issues (16th ed.).

  • 1 Is a Fair Trade Policy Superior to a Free Trade Policy?

 Part IV: Trade, Exports, and Imports

Go back to your data sources at the World Factbook and the World Bank to determine your country’s trade partners. What does your country import? What does it export? What percent of its total GDP is dependent on trade? If it is a developing economy, is it dependent on imports? Are imports thus greater than exports, giving it a negative balance of trade (trade deficit), or does it have resources to export to provide the country with a positive balance of trade (trade surplus)? Can you find any articles on fair trade within your country?

Your analysis of your country’s trade partners, imports, and exports should be 1- to 2 pages in length (not including cover and reference pages). Find an article outside of the World Factbook or the World Bank to provide the foundation for this section of your Final Assignment.

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