China announced on Monday that its trade surplus reached almost $1 trillion last year as its exports surged around the world, while the country’s own businesses and households grew rapidly. Be careful about shipping.
When adjusted for inflation, China’s economic output last year was by far the largest in the world in the last century, even with exports like Germany , Japan or the United States. China’s factories have dominated global manufacturing on a scale not seen by any country since the United States after World War II.
The outpouring of goods from Chinese factories has drawn criticism from a hundred-long list of China’s trade partners. Industrialized and developed countries alike have created tariffs, trying to slow the tide. In many cases, China has take revenge well, bring the world closer to one trade war which could cause further damage to the global economy.
The president chooses Donald J. Trumpwho will take office next week, has threatened to undermine US trade policies on China.
On Monday, China’s General Administration of Customs said that the country exported $3.58 trillion worth of goods and services last year, while exports were $2.59 trillion. The resulting profit of $990 billion broke China’s previous record, which is $838 billion in 2022.
Exports were strong in December, including some that may have been rushed to the United States before Mr. Trump can take action and start raising tariffs, leading China to a new monthly export of $104.8 billion.
While China runs a deficit in oil and other natural resources, its exports of manufactured goods represent 10 percent of China’s economy. By comparison, the US expectations of trade in manufactured goods peaked at 6 percent of American output early in World War I, while factories in Europe were many stopped exporting and shifted to wartime.
Many countries seek to trade in manufacturing because manufacturing creates jobs and is important to national security. An export economy is one in which exports exceed imports.
China’s exports of everything from cars to solar panels have been a boon for the country. Exports have created millions of jobs instead of six workers in the factorywhose wages have doubled in the last ten years but also for high-paid engineers, designers and research scientists.
At the same time, China’s supply of factory goods has slowed down. The country has been following the national self-reliance in the past two years, especially through its Made in China 2025 policy, which Beijing has pledged $300 billion to boost advanced manufacturing.
China has become the leading importer of cars world’s largest car exporterover Japan, South Korea, Mexico and Germany. A Chinese company, the state has started to do business alone the planesin an attempt to replace Airbus and Boeing aircraft each day. Chinese companies produce almost all over the world solar panel.
China’s exports are booming according to it home business is poverty. Financial markets have dealt some damage from the housing market crash that has left businesses and consumers panicked. Millions of construction workers lost their jobs, while Chinese average have lost a lot of money. This has made many families reluctant to use for delivery or household goods and services.
Overbuilding of China’s factories has begun to hurt many Chinese companies, which face falling prices, heavy losses and even bad loans.
The backlash to China’s economic inequality has come from industrial and developing countries alike. The government is concerned about factory closures and job losses in manufacturing that cannot compete with low prices from China.
The European Union and the United States raised tariffs last year on cars from China. But some of the broadest barriers for China’s exports are placed by low-income countries with middle-income economies, such as Brazil, Turkey, India and Indonesia. They were on the cutting edge of business but were afraid of missing out.
The volume of China’s exports increased by more than 12 percent a year. The dollar value of its exports grew at half that rate, as prices fell because Chinese companies produced more goods than foreign buyers were willing to buy.
President Biden, succeeded by President Trump in his first term, has led what has become a bipartisan criticism that Beijing is using its control over China’s state-owned banks to invest too much. at the factory. Bank loans to businesses were $83 billion in 2019, before the pandemic. That’s up to $670 billion by 2023, although the pace slowed slightly in the first nine months of last year.
“China is making a big mistake in producing two to three times the demand in many areas, whether it’s steel or robotics or electric cars, lithium batteries, solar panels laughed, and then exported more all over the world.,” said R. Nicholas BurnsUS Ambassador to China.
At a press conference on Monday, Wang Lingjun, vice president of the customs administration, denied the criticism. “It is important to protect China’s development,” he said.
China has not run a trade deficit since 1993. Its 2024 economic output dwarfs previous records during the financial transition. For example, Japan’s surplus peaked in 1993 at $96 billion. That works out to about $185 billion in today’s money, or less than a fifth of China’s surplus last year.
Germany has run a very large economy in the years following Europe’s financial crisis a decade ago. But its surplus peaked in 2017 at the equivalent of $326 billion in today’s money.
Japan and Germany’s trade accounts for about 1 percent of the world’s gross domestic product. China’s advertising industry is twice as big by that measure, said Brad Setser, a senior fellow at the Council on Foreign Relations.
“From 2021, China has turned back to exports in a big way – and its export growth is increasing at the expense of other economic sectors printed heavily around the world,” he said.
The United States ran a steady economy from 1870 to 1970, according to researchers at Federal Reserve Bank of St. Louis. Most are relatively small, in today’s money.
After World War II, with much of Europe and East Asia in ruins, American manufacturing shifted from tanks and guns to cars and washing machines. America’s post-industrial economy peaked at $12 billion in 1947, which works out to about $130 billion in today’s money. But because the entire world’s production was severely depressed that year, the US trade surplus equaled 4 percent of the world trade. That is the level China has not yet reached.
The expansion of China’s foreign exchange has reached half of the country’s total economic growth last year. Investments in new manufacturing facilities for export represent many additional growth opportunities. In a report scheduled for Friday, the Chinese government is expected to say that the country’s economy expanded by 5 percent last year.
China now produces about a third of the world’s manufactured goods, according to the United Nations Industrial Development Organization. That’s more than the United States, Japan, Germany, South Korea and England combined.
China has built up its exports by investing heavily in education, manufacturing and infrastructure, while maintaining low prices and other barriers to exports. Universities churn out many graduates engineering and other subjects Every year more than a combination of graduates in all majors from American colleges and universities.
The question is whether China can maintain its leadership if other countries raise tariffs. However, many people can see that China is still the most competitive place to buy products.
Eric Poses, owner and CEO of All Things Equal, a Miami Beach company that manufactures and distributes board games and electronic products, uses equipment in Shanghai. Printing board games cost twice as much in the United States, while the United States did not yet produce many of the electronics needed for board games.
“I thought I could do this at a good price, but it just wasn’t possible,” he said.