Great walls: a closer look at China-US trade
President Trump’s trip to Asia at the beginning of the month dominated the news. Apart from his desire to address tensions on the Korean peninsula, the trip was also intended to address the trade imbalance between Asia and the US, particularly focused on China. Yet it is possible to argue that Chinese exports to the US are a function of the globalisation of US electronics companies. The chart shows the top five Chinese export sectors to the US in 2016 and projected for 2017. The first two, electrical machinery and equipment and components and machinery include mobile phones, washing machines, semiconductors and computers. Clearly, they inherently contain intellectual property which is a key focus for the discussions between the two leaders. These sectors also dwarf trade between the two countries in other sectors which actually might reflect more closely a pattern of trade between an emerging economy and a developed one: furniture, toys and clothing. Top US exports to China include the catch-all “Commodities Not Elsewhere Specified” which proxies well for oil and arms trade, and aerospace. Most of the top export sectors from the US to China show slight declines between 2016 and 2017 except aerospace.
Value of China’s top five export and import sectors with the US (US$ bn), 2016 & 2017
Equant Analytics 2017
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