China’s growing economic importance is hardly news, but still certain economic milestones do serve to highlight the shifts underway in the global economy. According to statistics from both China and the United States, 2012 saw China’s total goods trade surpass that of the United States for the first time.
The stats from the U.S. Commerce Department show that the U.S. total trade in goods (exports and imports of goods) totalled USD$3.82 trillion in 2012. China Customs, who publish the equivalent data for the country, recorded China’s total trade in goods at USD$3.87 trillion, marking the first year in the modern era that China’s total goods trade surpassed that of the U.S.
There are a couple of things to keep in mind when considering these statistics. For one thing, trade in goods is not equivalent to total trade. A further category of trade is that in services, where the U.S. has an advantage due to its more advanced stage of economic development. In fact in 2012, U.S. total trade (including goods and services) was recorded at USD$4.93 trillion – the country recorded a trade surplus in services whilst recording a much larger deficit in the goods sector.
Another issue which distorts trade statistics is that of illicit fund outflows from China. Such outflows usually occur as a result of crimes such as corruption and tax evasion, in which China’s wealthy and well-connected elite are believed to excel. Moving funds offshore decreases chances of detection, and given the incoming leadership’s focus on graft and corruption, it is understandable that such practices could have increased in recent months. Even income equality policies are bound to encourage the wealthy and illicitly wealthy to move their money offshore.
Global Financial Integrity, a non-profit, monitors and reports extensively on illegal money flows, and has been drawing attention to flows out of China for years. One method of moving funds illicitly is by “misinvoicing” exports and imports to disguise flows of funds. A report published in October 2012 states that “The deliberate misinvoicing of exports and imports comprise by far the major channel for the transfer of illicit capital from China.” Such misinvoicing distorts trade statistics by understating exports or overstating imports. To put this figure in focus, China’s local media quoted the country’s anti-graft body as putting the total for illicit outflows from China in 2012 as a massive USD$1 trillion, and this was on top of an estimated illicit outflows of USD3.79 trillion between 2000 and 2011.
So, comparing China and U.S. goods trade is a bit like comparing apples and dragon fruit, and it is quite natural that the U.S. services sector should be larger and more significant that China’s. Furthermore, if we take into account the size of distortions that China’s illicit capital flight may have on its trade statistics, we can’t even be certain of China’s trade total anyway.
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Anon
The "Currency Wars" being waged now by the USD, Yen, Euro will only lead to a Weimar economy…China, Russia, BRICS will only survive this by backing their currencies with gold and commodities. Even as we speak, Goldman Sacks has made $$$ pushing global food prices up and starving poorer nations.
Jaques666
Haha,
China has intervened more in its currency than any country in history (it has the highest amount of FOREX reserves of any country in history).
Brazil has been engaging in currency rhetoric and action for years (nearly all aimed at China!!)
Russia we can ignore as it is dysfunctional and a lost cause….slow motion train wreck
Indian central bank chief and policymakers have stated repeatedly recently that their policy is influenced by the level of the currency (partly). I.E. – They are also focusing on currency.
All of it starts with China though, that has been actively intervening in the currency since 1994. Didn't matter when China;s economy was so small in the 90s, now it is provoking a reaction. China has also created nearly half of global new liquidity since 2009 (which has put massive downward pressure on the RMB even with the peg!)
Patrick McDonald
The Elites of Russia and of China are preparing their banking systems to hold enough gold that they can bypass other banking systems. China and Russia want to be the bankers of money readily acceptable with trade partners. They want money to work for them in commerce and for their trade currency to be weighted favorable on their own terms. When the classes of countries have more spending power;They may become more of a larger consumer base. Tax base increased jobs increased less imports maybe more exports. Companies world wide will outsource to cut costs.
blee
U.S. experts and analysts shouldn't worry too much over China's booming trade figures cuz they aresimply going to go up and up despite the increasingly loud howls and shrieks and the insanely gowing obsession with them. The U.S. ought to worry more about Mexico because of NAFTA and the potential great flooding of made-in-Mexico goods into the U.S. in the coming years. The U.S. could go broke due to just very that alone (Asian manufacturers are now shifting wholly or partly to Mexico).
Bankotsu
I am waiting for China GDP to overtake the U.S and also for the sole reserve currency status of the dollar to end.
U.S control of World Bank, IMF and WTO, all must come to an end. The entire U.S unipolar system must end.
Jaques666
It's funny, how no one else really wants the so called "exorbitant privilege" that th e US has. Everyone exports as much capital as possible to keep their trade surpluses! The US should be delighted when other countries start running trade deficits so it doesn't have to…that is the economic logic behind the end of the US Dollar as the Global reserve currency status.
It's a shame that most US leaders don't understand this. Even if most Chinese, Japanese and European leaders do!
Kanes
China's GDP per capita is very small.
hereandthere
China still has a long way to go, but there is no denying that over the past three decades it has made tremendous progress in boosting its economic prosperity.
klee
Maybe China & USA are both lying their figures. But, the fact is whether by 2020 or 2030, China's economy will be bigger than the US's. Those western analysts, whether they live in China or elsewhere in the world, are reluctant, resist to, are frustrated and hate to admit the decline of US in economy and the rise of China's. The only thing US has and proud of are those 11+ aircraft carriers, 700+ overseas bases, war-fighting experienced (several wars going on) and the bigger defense budget in the world with more than 16+ trillion dollars in national debt; and all these go with grandma without underwear at home that includes high crime rates (gun violence, etc.), higher number of citizens without health cares, and mid-level of test scores in the PISA tests.
Oro Invictus
@Klee
Sigh…
Let's go over your last "points", bit by bit.
High Crime Rates-
True enough, it does seem the US has a higher crime rate than the PRC. Yet, at the same time, it also has a significantly lower per capita suicide rate than the PRC (also, notably, the PRC's rate of increase in per capita suicide rate is higher than almost any nation on Earth, outstripping places like South Korea and Japan whose suicide rates have been relatively stable). This is kind of important, given most sociologists consider suicide rates a far better indicator of societal wellbeing and life satisfaction than crime rates.
http://www.oecd-ilibrary.org/sites/factbook-2010-en/11/03/01/index.html?contentType=&itemId=/content/chapter/factbook-2010-90-en
http://en.wikipedia.org/wiki/List_of_countries_by_suicide_rate
Higher Number of Citizens Without Health Care-
This is true… If you're comparing the US to Canada or Sweden or what-have-you. If you're talking about the PRC, well, given that the PRC's health coverage falls in between 10-40% of the population and the US' exceeds 95% (that >95% statistic actually surprised me, even though we are just talking about base coverage), you can kind of see why claiming the PRC's system covers more of their population than the US is a categorically ridiculous statement.
en.wikipedia.org/wiki/Universal_health_care
Mid-level PISA scores-
This is also something you might not want to bring up as, in terms of level of education, the US ranks 13th and the PRC ranks 98th. Also, before you start talking about how the American system is failing and the PRC's low rank is just because it is a developing country and is catching up, you should also take notice that, while the US has dropped a rank, the PRC has dropped two (that's another thing that surprised me, given that is rather atypical of developing nations). And you don't even want to start talking about per capita rates of innovation.
http://en.wikipedia.org/wiki/Education_Index
So, yes, in the future I would recommend you refrain from making passive-agressive comments like these, particularily when the facts run opposite to the statements you are using to impugn others. Then again, at least you haven't regressed to full-on projection and started claiming others are "jealous" and "bitter" about you, so there's that.
klee
China & USA are on different developmental stages, coming from different paths. Roughfully, China is perhaps around what USA was in last qarter of 19th century. Western analysts always like to attack China's human right issues. But you can look back to see what human right those native Americans had around early 1990's and those Black Americans had in 1950's & 60's.
High per capita income is, no doubt, good for individuals, personal wealth, etc.; but not necessarily good for the country in a certain way. Because when wages go up, companies will go overseas to search for cheaper labor and the country has then needs to rely on innovative products to maintain GDP. At the present, USA's R&D expenses still are higher than those of China. That is the truth. But, China will get there, maybe in 10 years or a few decades.
I forgot to mention that another glory USA has is those 8500+ nuclear warheads (very impressive! only Russia has more, maybe China needs to start do some catching up work on this too).
para82
According to The Economist, about 80% of the money leaving China goes through "misinvoicing". Most of these funds belong to the Chinese SOEs but they come back to China as foreign investments to take adventage of lower tax rates and subsidies which are only given to the foreign business entities. In reality many of the "foreign investemts" are Chinese investments. So actually very small amounts of money leaves China. Where else are they going to put their movey besides China? After all China is the fastest growing MAJOR economy.
Anon
@klee It is remarkable the first portion of your list reflects in perfect cause-effect symmetry the latter half. Real Americans know this, why, and who really benefits from this state of affairs, etc. False patriots will continue to push America over this debt-war-WallSt-corrupted abyss.
para82
@oro invictus: About 95% of Chinese are covered by various government and private health insurance schemes. The problem lies in that the out- of- pocket expenses are very high. So the Chinese government has been steadily increasing it's spending on health care so that the people's out -of- pocket payments will decrease. Even though America has a good higher education system, it's K-12 education system is a big failure. The American secondary students are way behind the students of the other developed countries in reading and math skills. Also college graduation rate has been declining and most of American college students resuse to major in the areas of STEM which are essential for the development of science and technology. By the middle of this century, the Hispanics and blacks will be a majority in America. So unless America brings up their very low academic achievement levels, America is doomed. In my opinion, for a society, a high crime rate is far worse than a high sucide rate, simply because many more innocent people get hurt in a vilolent criminal act than a sucidal act that only kills one person. Of course a person kills a lot of people before he commits sucide, then he also commits a violent crime contributing to a higer crime rate.
Oro Invictus
@Klee
I like how you basically didn't actually provide any salient responses to my post. First off, I didn't mention anything about human rights, but if you really want to get into that well… Trying to excuse the atrocities of the PRC by comparing them to the past atrocities of the US is not only a false equivalency, it is a moot point. Please explain how the past actions of the US (while still quite atrocious) justify what is happening in the modern PRC? Likewise, the fact that suicides and dissatisfaction with life surveys have been skyrocketing in the last while doesn't really support your implied statement that the PRC under the CPC is becoming more tolerable.
The only quasi-salient point is that of R&D expenses, but even that falls flat; even with all the ridiculous beauracratic mismanagements of the US' research efforts, their innovation rate still exceeds the PRC's per individual AND per unit of resources invested. Many would point to the ridiculously unproductive jet engine research in the PRC which (even accounting for the fact that the US co-opted a great deal of early jet technology and ignoring that the PRC has been reverse-engineering such engines for years) has yet to produce anything approaching serviceable for military purposes, but I think the sheer lack of innovation in green technologies and biotechnology despite massive government subsidies are the best example. Further hammering home the point is the fact that the total amount of innovations in the PRC increase proportionally (albeit, with diminishing returns) with amount of resources invested, while only showing limited correlation with level of education and implementation of various initiatives; that is to say, the socio-cultural climate under the CPC is not improving for researchers, rather, innovations there are simply a function of amount of resources invested (brute-force science, as one might call it). As such, for the PRC to exceed the US in total number of innovations, it will need a significantly higher amount of resources invested (depending on which research programs you want to use as templates, several times over as much); that isn't to say it can't happen, but it will be extremely-resource intensive, inefficient, and of limited sustainability.
Finally, on the matter of nuclear warheads, ignoring once again thathas nothing to do with anything in my post, I would agree that the US, and any other nuclear state for that matter, should dispose of their nuclear weapons. Still, the key thing is that the US and Russia are actually retiring a large portion of their arsenal; the PRC, on the other hand, is increasing it (though, it is hardly alone in this regard). Considering the PRC has more than enough nuclear weapons to serve as a deterrent, this increase hardly seems to qualify as self-defense.
@para82
If you bring insurance into the matter, but we are talking about base health coverage; i.e. you can say 100% of the population is insured, but unless the base health coverage is similarily as high then such a statement is meaningless. There's a reason why, for many families in the PRC, a relative developing a serious illness will essentially ruin said family financially.
Similarily, the whole bit about schooling would be a lot more pursuasive if, for the same time period, the US dropped one rank while the PRC had not dropped two (once again, despite massive investment in the latter's system nd the fact it is starting from a low point). The US does need to fix it's schooling system, but then again, so do most nations (particularily the PRC). The bit about "blacks and hispanics" is also a moot point, as education levels among these groups are equalizing with other groups (which is in notable contrast to the case with the PRC's non-Han minorities); they aren't going to "bring down the average" or anything, unless you're trying to suggest that these groups are less intelligent than others (which, to be honest, you may very well be; the way you put in that statement without qualifying it could lead one to conclude you are just being racist).
Finally, if you believe crime is a better indicator of societal stability and social contentment than suicides, that's fine. However, I will once again reiterate most sociologists disagree with you and the data shows a much stronger correlation with rate of suicide and personal satisfaction and social stability than it does with crime rates.
para82
@Oro Invictus: I think you have a serious reading comprehension problem. I mentioned that the problem with the Chinese health care system is the big out-of-pocket paymenmts on the part of the insured. Therefore the Chinese government has been steadily increasing the health care subsidies in order to lesson the financial burden of the insured. Go back to my previous post , read it again. Also you are wrong in saying that "the educational levels among these groups( Hispanics and blacks) are equalizing with other groups". According to Teresa Wiltz of America's Wire in 2012 quoting the Washington- based advocacy group Education Trust, black and Hispanic high school achivement has fallen to a 30 year low. The academic levels of black and Hispanic high school seniors are about the level of 13- year- old white students. The fundermental difference between China and America by the middle of this century is that the academically high-achieving Han Chinese will be still an overwhelming majority in China but in America the academically underachieving Hispanics and blacks will be a majority. So take a wild guess on which country will do better. I said nothing about a group's intellegence in my comments. Academic achivements have a lot more to do with a culture that encourages hard work and study than so-called innate intelligence. What America has to do is teach all the American students of every racial and ethnic group good study habits to improve their academic achievements. There is nothing racist about this. Japan has a higher sucide rate than America. But accoding to many statistics, the crime rate in the U.S. is a lot higher than in Japan. In my experience, I find Japanese society is much more stable than America. I don't know about you, but I would rather live in a country that has a high sucide rate but a low crime rate than in a coutntry wth statistics the other way around.
para82
@Oro Invictus: I mentioned that the problem with the Chinese health care system is that the out-of-pocket expense is very big for the insured. Therefore the Chinese government has steadily increased the health care subsidies to lesson the burden of the insured. Also you are wrong in saying that "the educational levels of these groups( blacks and Hispanics) are equalizing with other groups. According to Terasa Wiltz of America's Wire who quoted in 2012 the Washington-based advocacy group Education Trust, the black and Hispanic high school achievement has fallen to a 30 year low. The academic levels of black and Hispanic high school seniors are about the level of 13-year-old white students. The fundermental difference between China and America by the middle of the century is that the high achieving Han Chinese will still be an overwhelming majority in China, on the other hand academically low achieving blacks and Hispanics will be a majority in America. Now, you tell me which country will do better. I said nothing about a group's intelligence in my comments. Academic achievements have a lot more to do with a culture that encourages hard work and study than so- called innate intelligence. What America has to do is teach all it's students of every racial and ethnic group, good study habits to improve their academic achievements. There is nothing racist about this. Japan has a higher sucide rate than America. But according to many statistics, the crime rate in America is a lot higher tham in Japan. In my experience, I find the Japanese society much more stable than the American one. I don't know about you, but I would rather live in a country that has a high sucide rate but a low crime rate than in a country with statistics the other way around.
Oro Invictus
@para82
It's abundantly clear you seem to lack even a basic grasp of what I am saying. First off, the issue with health care coverage is that the PRC lacks the infrastructure to actually provide for even half it's people effectively (did you even read the links I posted, or understand the concept of basic health coverage?).
Second, your bit about "high achieving Han", besides completely refuting your claims your "not talking about groups", further falls flat as, once again (since you seemed to have missed this twice), during the same time period in which the US dropped one spot in education level the PRC dropped two despite being a developing nation, starting from a low rank, and heavily investing in education. Not to mention you completely ignored the matter of poorly performing non-Han minorities in the PRC. Also, I recommend you read the NCES report regarding education among ethnic groups in the US, particularily as it pertains to general trends in education level (not to mention, the general principle that as population distribution among ethnic groups in a region equalize, so do does resource distribution and education level).
http://nces.ed.gov/pubs2010/2010015.pdf
Finally, statements like "I find" are immaterial, as that is your (biased) opinion, which is fine but is only first-person subjectivity. Most sociologists and mosta data support the suicide-based hypothesis, while you can only claim your opinion as support for your argument. Honestly, at this point, unless you want to provide data from independent and verified sources, I would recommend you stop here before embarrassing yourself further.
para82
@ You really DO have a serious reading comprehension problem, don't you? You sound like a perfect example of the Ameican k-12 education system . It's obvious that you keep missing the point I have been trying to make abut the China's health care system. So I'm going to repeat one more time for your benefit. It is very expensive for the insured to get proper health care in China, because of high out-of-pocket expenses. But the Chinese government has STEADILY raised the health care subsidies to lesson the financial burden of the insured. The POINT that I'm trying to make is that the very nasent and not- too- perfect Chinese universal health care system is IMPROVING. I know it still has a long way to go to provide excellent health care services to the Chinese people. Also you should read the articles by Teresa Wiltz of America's Wire and others to find out what a sorry shape the American k-12 education system is in and the achievement gap beween white students and black and Hispanic ones is huge. On the 2009 PISA test, the Shanghai students came out on top( according to the OECD many other Chinese regions participated in the PISA test and the OECD also indicated it didn't expect much variation.). On the other hand American students came in 23rd. The American students' score was below the OECD average. By any measure, the higher-sucide-rate-but -lower- crime- rate Japan is much more stable than America. Compare the life expectancy, incarceration rate, juvinile delinquency rate, high school and college graduation rate, divorce rate, etc in the two countries. If you do that you 'll find on the whole,Japan is much more stable and safer than America. I think you are driven by an intense anti-Chinese GOVERNMENT agenda who concerntates only on what's wrong with the Chinese government rather than what it has done right. The Chinese government has done a lot of terrible things but also a lot of good things too for China. I think the entire Chinese economic and political system is evolving for better. But If it makes you feel better, please keep saying to yourself, things in China are terrible but they are good in America with your head buried in the sand. LOL !!!!!!
para82
@Oro Invictus: My last comment was directed at you.
Oro Invictus
@para82
I'm not sure what I find sadder: your ridiculously overbearing posturing which is a clear attempt to compensate for your perceived faults or your utter inability to see how ridiculous you're making yourself look. LOL indeed.
In any case, since you seem too blinded by the desire to protect your (apparently fragile) ego, I'm going to make this my last response to you (unless, of course, you manage to overcome your catastrophic insecurities and act like an adult).
First off, I'm Canadian, not American. Likewise, had you even the most minute iota of understanding my comments, you would probably realize I have little love for the US beyond its "virtue" of being a lesser evil. So much for your "reading comprehension", it seems.
Second, I never said anything about whether or not the PRC's health care was improving, I was simply refuting the notion it currently even comes close to covering as much of its population as that of the US.
Third, it seems abundantly obvious you have no conception in regards to how the global education index works; it is an extremely encompassing system utilizing myriad indicators, including PISA scores, to rank overall education levels. You are essentially, by continuously attempting to bring up PISA scores and compare them to the GEI are displaying an appalling lack of understanding regarding basic statical modelling. Similarly, your attempt to compare a single group's study against that of the DoE's (which incorporated information from numerous other groups into its data) shows a similar scholastic deficiency on your part.
I'm not going to even get into the suicides issue (although your complete and utter inability to even try and discuss the matter of life satisfaction rankings show how little stock you put in your own argument); that you still can't seem to understand the difference between your opinion and that of a consensus between numerous experts seems to imply your ability to apply logic is as poor as your ability to comprehend it.
At the end of the day, the difference between you and me is that I have no fear regarding my personal situation or the overall validity of my various interpretative and predictive models while only having the utmost fear for the wider world (particularly those within and around the PRC's borders). Your blatant denial and projection, on the other hand, is characteristic of someone extremely concerned with their own future and utterly indifferent to the plight of those around you.
para82
@ Oro Invictus: I can see you are full of hot air. It's obvious you can not argue logically . You sound like a failed master's degree candidate. You'd better stop spewing out a lot of garbage and go back to school and try to learn and fill your precious brain with some knowledge. LOL !!!!!!!!
para82
@Oro Invictus: I think you have not only a reading comprehension problem but also a math problem. According to The Economist, China Daily and many other publications I have read, even though the Chinese health care system is inadequate as it is, about 95% of the Chinese are insured also the system has been impovng steadily. So your argument that the number of the Chinese insured does not come close to the number of the U.S. population is very wrong. You either don't know how to add or subtract simple numbers or spew out a wrong figure on purpose. On PISA test, The New York Times on Dec 7. 2010 quoted Arn Duncan, the Secretary of Education saying "I know skeptics will want to argue with the results, we consider them to be accurate and reliable and we have to see them as a challenge to get better". he aded " The United States came in 23rd or 24th in most subjects. We can quibble,or we can face the brutal truth that we are being OUT-EDUCATED (by the Chinese)". So who is in better position than the U.S.Secretary of Education in assessing the American education? So you are Canadian? Believe me, I'll take the American Secretary of Education's words on the American education than your unfounded-B.S. anytime. You should also remember that you are the one who initiated the discussion about the American and Chinese education. I have just been responding to your b.s arguments. According to a study done by Jane's Information Services in 2008 about the most STABLE and prosperous countries among 235 countries, all the top 10 countries with the exception of Germany are the countries with LOW crime rates. The HIGH crime rate U.S. came in 24th. Do you really think the High crime rate America is more stable than Austria or New Zealand that has high sucide rates but very low crime rates? My suggestion to you is research things better before you run your mouth off.