Continued Increases in Globalization and Global Trade – The Chinese Case:
Julia West, Economist, Global Financial Data
The beginning of the 21st century has seen continued and increasing globalization. The removal
of trade and investment barriers, growth of domestic markets, as well as rapid development of
high-tech and information systems industries has each contributed. The advent and use of the
internet along with new technology has greatly facilitated this trend, shrinking our world
through increased integration of people and places, through communication, transportation
and trade.
International trade has continued to expand in emerging economies and developing countries
that are benefited by low wage costs and undervalued currencies (in particular China and
South-Asian countries).
World Exports
20
Defined:
Globalization –
growing
integration of
economies and
societies
around the
world
Trillions of USD
15
10
5
0
1948
1955
1962
1969
1976
1983
1990
1997
2004
During the past decade, global trade rose - driven in part by China’s entry into the World Trade
Organization in 2001. World goods exports more than doubled between 2000 and 2010,
increasing by 125%. China’s entry into the WTO allowed it to capitalize on its abundance of
labor. Pair this with China’s rapid industrialization and the result will of course be a competitive
advantage in manufacturing. China’s growth of goods exports has been tremendous - since
1999 total exports have increased over 700%, from 195 million USD in 1999 to 1.5 trillion USD
in 2010.
China's Exports
20
Trillions of USD
Not surprisingly, China’s primary
exports are manufactured goods such
as electrical components and other
machinery. Chinese imports consist
of industrial supplies and capital
goods – mainly textiles and electronic
equipment.
15
10
5
0
Annual Goods Exports (1948-2010)
22%
China
17%
Share of World
The share of world
BOP Goods Imports
and Exports has
increased
substantially for
China over the last
60 years. By 2010,
China was the
leading exporter in
the world.
Germany
12%
United
Kingdom
Japan
7%
USA
2%
-3%
1948
1955
1962
1969
1976
1983
1990
1997
2004
In 2005, China moved away from its stable exchange rate policy and the Yuan began to
gradually appreciate in value (The Yuan had previously been maintained at 8.27 Yuan per USD),
putting upward pressure on import and export price indices. As a result of implementation of
the managed float system, the dollar depreciated approximately 17% against the Yuan between
July 2005 and July 2008.
China's Trade Surplus/Deficit
350
300
250
200
150
100
50
0
-50
Goods Imports,
Share of World
Date
USA
China
1948 11.00% 0.91%
1958 11.60% 2.27%
1968 13.84% 0.86%
1978 14.28% 0.85%
1988 15.87% 1.91%
1998 16.47% 2.51%
2008 13.99% 7.03%
2010 13.15% 9.32%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Entry into the WTO in
2001 drastically
increased Chinese
imports and exports.
Despite rising Chinese export prices throughout the early 2000’s,
China’s share of world BOP Goods Exports had increased to 9.54%
by 2008 and reached 10.28% in 2010.
Billions of USD
Goods Exports,
Share of World
Date
USA
China
1948 20.84% 0.91%
1958 15.03% 2.50%
1968 14.26% 0.98%
1978 11.39% 0.79%
1988 11.54% 1.70%
1998 12.30% 3.37%
2008 8.69%
9.54%
2010 8.25% 10.28%
Year
Since 1994 the net balance of trade in goods for China has been in
surplus. The above chart shows the trade surplus has increased
tremendously in recent years. In 2008, the trade surplus peaked at
360 billion USD – an 8-fold increase over 2002. Recently the
increase in consumer spending has led to a rise in imports,
allowing the trade surplus to narrow to just 178 billion USD in
2010.
China’s economy has been growing at a rate of around 10% for the last several decades and
needs to continue to grow at a high rate in order to sustain job growth and stability within the
country. The question is - how long can exports continue to sustain the rapid growth of the
Chinese economy? China’s trade surplus has recently narrowed and Chinese policy makers are
attempting to slow down the economy. Rather than relying on exports, China needs to
complete their transition to domestic consumption-led growth in order to sustain economic
growth.
GFD File ID
File Description (Name)
(Symbol)
Current Series
TDGXCHNM
China Export of Goods
TDGMCHNM China Imports of Goods
TDGXDEUM
Germany Export of Goods
TDGMDEUM Germany Imports of Goods
TDGXJPNM
Japan Export of Goods
TDGMJPNM
Japan Imports of Goods
TDGXGBRM
United Kingdom Export of Goods
TDGMGBRM United Kingdom Imports of Goods
TDGXUSAM
United States Export of Goods
TDGMUSAM United States Imports of Goods
TDGXWLDM
World (WBG members) Export of Goods
TDGMWLDM World (WBG members) Imports of Goods
Historical Series
BXGCHNUA
China BOP Goods Exports (USD)
Periodicity (dates)
Monthly From Jan 1981 To May 2011
Monthly From Jan 1981 To May 2011
Monthly From Jan 1957 To Apr 2011
Monthly From Jan 1957 To Apr 2011
Monthly From Jan 1957 To May 2011
Monthly From Jan 1957 To May 2011
Monthly From Dec 1854 To Apr 2011
Monthly From Jan 1856 To Apr 2011
Monthly From Jan 1957 To Apr 2011
Monthly From Jan 1957 To Apr 2011
Monthly From Jan 1991 To Apr 2011
Monthly From Jan 1991 To Apr 2011
Annual From Dec 1865 To Dec 2008
BMGCHNUA
China BOP Goods Imports (USD)
Annual From Dec 1865 To Dec 2008
BXGWLDA
World BOP Goods Exports (USD)
Annual From Dec 1948 To Dec 2009
BMGWLDA
Annual From Dec 1948 To Dec 2009
BXGDEUUA
World BOP Goods Imports (USD)
United Kingdom BOP Goods Exports
(USD)
Germany BOP Goods Exports (USD)
BXGJPNUA
USBOPGEXP
M
Japan BOP Goods Exports (USD)
United States Exports of Goods, Balance
of Payments Basis (Mil. of $, SA)
Annual From Dec 1860 To Dec 2009
Annual From Dec 1790 To Jul 1866
Monthly From Aug 1866 To Aug 2011
BXGGBRUA
Annual From Dec 1796 To Dec 2009
Annual From Dec 1880 To Dec 2008