Soon-to-be second largest economy puts end to Germany's six-year reign as world's top exporter.
China tops world exports
BEIJING // It may be a while before Chinese Geely and Xiali cars start overtaking BMWs and Mercedes-Benzes on the autobahn, but in trade terms the Asian giant's precision engine is the one to watch. China has overtaken Germany as the world's biggest exporter. Germany's exports are legendary: top-quality cars, innovative chemical products and highly specialised machine tools. Chinese goods tend to be lower down the value chain, including cheaper electronic goods and clothing. But China has price on its side.
From January to November, exports from China, with a population of 1.3 billion, were worth US$1.07 trillion (Dh3.93tn); while data showed exports from Germany, with a population of 82 million, amounted to ?734.6 billion (Dh3.88tn). Exports were a major factor in Germany's post-war economic miracle, but Europe's biggest economy is recovering from recession and is estimated to have contracted by about 5 per cent last year.
Foreign sales have also been the main driver behind a 15-fold increase in China's economy to more than $3.8tn since economic reform saw it open its doors to foreign trade and investment in 1978. Full-year figures for German trade are not out until February 9 but no one is expecting surprises. The balance has shifted in China's favour. The figures come against a broader background of a strongly performing China. The country's economy is expected to grow by about 8.3 per cent this year, while Germany's central bank forecasts growth of just 1.6 per cent.
Germany was the world's biggest exporter for six years in a row until 2008, but it has been badly hit by the downturn and recovered slowly. The Federation of German Industries expects exports to rise by 4 per cent this year, but reckons it will take four years to recover fully. In November, the German trade surplus climbed to ?17.2bn, seasonally corrected figures showed, from ?13.6bn in October, largely due to strong Asian demand.
China's full-year exports fell 16.5 per cent last year, but the pace of decline in exports was slower than in other big exporting nations. This gives China a bigger slice of the global pie, now reckoned at 9 per cent of the world's total last year, up from 8.8 per cent the year before, Zhong Shan, the vice commerce minister, said last month. China's trading might is not without its problems. The country's export growth has stoked political tensions with the US and Europe.
Washington has imposed anti-dumping duties on Chinese steel products as it believes China, a low-cost producer, is selling its goods at below-market value to gain an unfair trade advantage. The same kind of tensions exist with China's trade with the EU, which is the country's biggest trading partner. The next milestone will be when China overtakes Japan as the world's second-biggest economy. That should be any day now, with some analysts saying China has already overtaken its Asian rival.