AP IMPACT: China surpasses US as top global trader
Also, even though Chinese companies invest abroad and employ thousands of foreign workers, they lag behind American industry in building global alliances and in innovation, which is still rewarded in the marketplace. China’s competitive edge remains low labor and other costs, while the U.S. is the world’s center for innovation in autos, aerospace, computers, medicine, munitions, finance and pharmaceuticals. The Chinese have yet to build a car that will pass U.S. or European emission standards.
And the United States still does more trade overall — but just barely. If the trend continues, China will push past the U.S. this year, a remarkable feat for a country so poor 30 years ago that the average person had never talked on a telephone.
‘‘The center of gravity of the world economy has moved to the east,’’ said Mauricio Cardenas, the finance minister in Colombia. Like most of Latin America, his country is still more closely tied to the U.S., but its trade with China has risen from virtually nothing to 2.5 percent of GDP, a more than tenfold increase since 2001. ‘‘I would say that there is nothing comparable in the last 50 years.’’
In one sense, China’s growing presence in trade is just restoring the Middle Kingdom to its historic dominance. China was the biggest economy for centuries until about 1800, when the Industrial Revolution propelled first Europe and then the U.S. into the lead.
China began its return to the global stage in the 1990s as a manufacturer of low-priced goods, from T-shirts to toys. Factories in other countries slashed costs to meet the ‘‘China price’’ or were pushed out of the market.
As the new millennium dawned, the U.S. remained by far the world’s dominant trader, rivaled collectively by Europe but no single nation. However, from 2000 to 2008, China’s imports grew 403 percent and exports 474 percent, driven in part by its entrance into the World Trade Organization and its move to higher-value production.
China’s imports of oil and raw materials for its factories propelled resource booms in parts of Asia, Africa and Latin America. China’s demand for steel for manufacturing and construction grew so fast that its mills now consume half the world’s output of iron ore.
Zambia, a major copper producer, switched to the China column in 2000. Australia, a coal and iron ore exporter, followed in 2005. Chile, another copper supplier, moved in 2009.
Meanwhile, exports surged as Apple, Samsung, Nokia and other electronics giants shifted final assembly to China. Shipments of mobile phones, flat-screen TVs and personal computers have jumped sevenfold over the past decade to nearly $500 billion. That made China a major customer for high-tech components supplied by countries such as South Korea, which swung into China’s column in 2003, followed by Malaysia in 2007.
In the U.S., Vermont-based manufacturer SBE Inc. started exporting capacitors — energy-storage devices used in computers, hybrid cars and wind turbines — in 2006. The company now gets 15 to 20 percent of its revenue from China, and has hired 10 employees there.
As China grew richer, its people spent more.
Chinese ate more pork, fried chicken and hamburgers, rapidly sending up the demand for soybeans to make cooking oil and feed for pigs and cows. Some cattle ranchers in Latin America turned grazing land into fields of soy, a crop few in their region consume. Soybean exports helped push Brazil into the China column in 2010, and put China neck and neck with the U.S. as Argentina’s top trading partner.
In the Brazilian state of Mato Grosso, some 10,000 miles (17,000 kilometers) from Beijing, farmer Agenor Vicente Pelissa and his family raise cattle and soy on 54,300 acres, a farm twice the size of Manhattan. Half their 21,000-ton annual soybean harvest goes to China.
‘‘We've invested more in technology and in better machines and equipment to meet this rising demand,’’ Pelissa said. ‘‘If it hadn’t been for China, we would not have not modernized our operations, at least not as quickly as we did.’’
Even in the U.S., better known for manufacturing, farmers are rushing to sell to China. The United States is the largest exporter of soybeans to China, followed by Brazil and Argentina. China’s purchases of American soybeans have risen from almost nothing 20 years ago to a quarter of the crop: 24 million tons worth $12.1 billion, America’s largest export to China.
The boom is having a profound effect on farming communities, said Grant Kimberley, whose family farm near Des Moines, Iowa, now grows 4,000 acres of soybeans, up from 3,500 eight years ago.Continued...