[Beren]

China Has Accomplished Something In Global Trade Not Seen Since Colonial Britain

MAMTA BADKAR
APR. 29, 2014, 11:51 AM

China's exports and imports of goods amounted to $4.16 trillion in 2013, topping the U.S. for the first time.

A new Standard Chartered report by Madhur Jha and other Standard Chartered economists, titled "Global Trade Unbundled," highlights just how much of a trading giant China has become.

"China is a true mega-trader — a position last held by colonial Britain, with trade significant not only as a share of world trade (11.5%) but also of its own GDP (47%)," according to Jha. "China will likely become a champion of free trade."

The U.S. is China's top export destination. China's trade with Latin America has risen more than 200 times since 1990 and is the fastest-growing corridor. China's trade is beginning to slow, however. Exports accounted for about 25% of GDP in 2012, down from 35% in 2007. And the slowdown is broad based.

The good news is despite the slowdown, exports to Latin America and Africa are still growing at "double-digit levels." Jha and the other authors identity a few reasons they think China will continue to be a leader of world trade.

1. The economic recovery in the developed world is a positive for China, as demand picks up.

2. "China remains a leading force in world trade, having consolidated its position as key player in global supply chains."

3. While China no longer has the low-cost advantage, it is moving up the value chain and has a larger share in medium and high-tech exports. "We believe it is unlikely that there will be significant migration of these processes out of China for lack of suitable replacement centers, with both the infrastructure and the scale to accommodate these exports."

4. There is too much attention paid to Chinese exports and not enough to imports. "The focus on more balanced growth and structural reforms domestically will, over time, allow for lower savings and higher consumption," writes Jha. "…Some of this shift towards consumption will filter nto greater imports from the rest of the world, strengthening global trade growth and South-South trade in particular."

Standard Chartered economists expect Chinese trade to double in size by 2020.

"China’s trade growth is unlikely to rebound to the double-digit level seen over the last couple of decades. However, it is important to remember that the sheer size of China’s trade will mean that even 7% GDP growth, faster than the growth in developed world trade, would make China the single biggest contributor to world trade in absolute terms."

Here's a look at the China's major trade corridors in 1990 and 2012.

If China topples the US and its trade will have doubled in size by 2020, then it will be such a huge commercial power as the US and the EU combined, I guess, or something very close to that.

[Soulflytribe]

It's impressive, indeed.

Check this: http://i.imgur.com/XVRTUC0.png

[Istanbuller]

Every third world country with a massive population could do that. I don't see any progress made in China. China is the least country where we can talk about concepts of freedom like ''free trade''.

[Atlantis]

Every third world country with a massive population could do that. I don't see any progress made in China. China is the least country when we talk about ''free things''.

What on Earth are you talking about? There is not a single country in the entire history of this planet that has achieved anything like it.

Within 20 years, China has developed from an impoverished backward nation to an industrial powerhouse. GDP has increased 6-fold. While the West indulges in complacency, China outperforms its competitors in technological and economical terms. The combination of market size, high tech and huge labor reserve make China unbeatable.

[Istanbuller]

It is just not China experiences that kind of rapid growth, but journalists like sounding it like China is a unique country. Lots of developing and underdeveloped countries see growth rates that they have never seen before.

Despite the economic growth, Chinese are not wise enough. They don't have balanced attitudes toward their trade partners and too aggressive. We will tolerate Chinese zealots till we find another country who can produce cheap and little products to us.

I have seen many studies which suggest India will overtake China in coming decades. Even, the overall growth in economies of Muslim countries close to what they have in China. If they solve social and political problems, then Muslims countries easily unite and turn themselves into economic and political powerhouse. The most surprising part, Africa also rises. We are hearing many news from Nigeria recently.

If you want to make conclusions about world economic trends, not just only a part of it but the whole picture you should take into account.

[Atlantis]

If they solve social and political problems, then Muslims countries easily unite and turn themselves into economic and political powerhouse.

This is what I find the most amazing thing about this forum: people talk about the rise or decline of a country as if you could pull economic development out off a hat. This ideological approach to reality completely misses the point.

What is it that the whole of the Muslim world produces? Do you produce electronics, cars, satellites, ships, new materials, space rockets, airplanes ... anything at all? Anything that other people might want to buy? Except for oil, there is nothing, absolutely nothing! And to explore their oil reserves, Muslim countries need foreign technology.

That is the difference, China develops its own technology.

[Istanbuller]

This is what I find the most amazing thing about this forum: people talk about the rise or decline of a country as if you could pull economic development out off a hat. This ideological approach to reality completely misses the point.

These were the realities, not wishful thinking. But i don't know if you have a bias to a particular group of people or you are a Chinese fan boy. I must say that nor your bias neither your admiration to China can manipulate the facts. Muslims nations like Indonesia, Turkey, Malaysia, Iran (despite the sanctions), N. Iraq etc. are the ones that can maintain a sustainable population growth and economic growth together, for instance. There is a suitable environment for economic growth and development in all these countries.

What is it that the whole of the Muslim world produces? Do you produce electronics, cars, satellites, ships, new materials, space rockets, airplanes ... anything at all? Anything that other people might want to buy? Except for oil, there is nothing, absolutely nothing! And to explore their oil reserves

What does China produce for us other than low valued consumer goods?

Muslim countries need foreign technology

Everybody needs foreign technology. This is the crucial point of our globalised world.

That is the difference, China develops its own technology.

[Atlantis]

Muslims nations like Indonesia, Turkey, Malaysia, Iran (despite the sanctions), N. Iraq etc. are the ones that can maintain a sustainable population growth and economic growth together, for instance. There is a suitable environment for economic growth and development in all these countries.

Didn't you ever ask yourself why China so desperately tried to limit population growth by the one-child-policy? Simple: overpopulation and prosperity don't go together.

Population is not important. Technology is important. Or do you think that Bangladesh is more prosperous than Japan because it has a bigger population? Do you think that Bangladesh will become more prosperous if its population increases even more? What is the difference between Bangladesh and Japan? Simple: technology.

2012 patent applications:
Japan: 287,580
Bangladesh: 32

Do you see a difference?

The same applies to China. 2012 patent applications:
China: 415,829
Indonesia 541
Turkey 3,885
Malaysia 1,076

Technological innovation in the whole of the Muslim World doesn't amount to much more than 1% of Chinese innovation.

Sure you can import technology. Old technology and low-cost manufacturing. The German engineer at a Siemens plant in Germany makes 5,000 while the Malaysian engineer at the Siemens plant in Malaysia makes 500 USD. You see the difference? If you don't have your own technology you will get the lowest pay. Only countries like China, which develop their own technology, will prosper.

Your idea of China is outdated. China has already overtaken the West in a number of technology fields. The country is developing very rapidly. Other countries are falling back at the same rate.

Therefore, we can safely forget all about the Muslim world.

[Istanbuller]

Didn't you ever ask yourself why China so desperately tried to limit population growth by the one-child-policy?

It is an old nonsense left from Communism era and when China was fully a closed country. A few months ago, i have read many news about China is going to abolish its one- child policy for for having a sustainable population and and slowing down the effects of its rapidly aging population. They just lighten their one- childy policy for now. So you should upgrade your information on this.

Simple: overpopulation and prosperity don't go together.

Overpopulation never exist.

Population is not important. Technology is important. Or do you think that Bangladesh is more prosperous than Japan because it has a bigger population? Do you think that Bangladesh will become more prosperous if its population increases even more? What is the difference between Bangladesh and Japan? Simple: technology.

This is not going to happen because you just overrate technology. But, for once, let's consider that technology becomes the only factor pushes economic growth. Everything is mechanised. Machines can work without any human need. In such a case, wouldn't China lose its large population advantage for production? Even Monaco would produce more goods than China if this were real!.

2012 patent applications:
Japan: 287,580
Bangladesh: 32

Do you see a difference?

The same applies to China. 2012 patent applications:
China: 415,829
Indonesia 541
Turkey 3,885
Malaysia 1,076

Technological innovation in the whole of the Muslim World doesn't amount to much more than 1% of Chinese innovation.

Sure you can import technology. Old technology and low-cost manufacturing. The German engineer at a Siemens plant in Germany makes 5,000 while the Malaysian engineer at the Siemens plant in Malaysia makes 500 USD. You see the difference? If you don't have your own technology you will get the lowest pay. Only countries like China, which develop their own technology, will prosper.

You enjoy sounding it like China has an absolute advantage in every field, don't you? I expected you to show me a better argument than this. In my country, people do similar comparisons between us and Israel.

Your idea of China is outdated. China has already overtaken the West in a number of technology fields. The country is developing very rapidly. Other countries are falling back at the same rate.

Therefore, we can safely forget all about the Muslim world.

I see what is wrong with you.