Exports to China Helps Keep U.S. Economy in Black

U.S. GDP grew at an anemic 1.3 percent pace in the 2nd quarter thanks to a weak housing market and slowing consumer demand. What kept the picture from being even bleaker is the continuing surge in exports to China, an economy that’s still growing at a steady 9.5 percent rate in 2011.

China was the United States’ 3rd largest goods export market in 2010. U.S. goods exports to China jumped 32.2 % in 2010 to $91.9 billion. That’s an 890% jump from 1994. U.S. exports to China accounted for 7.2% of overall U.S. exports in 2010.

China recently became the top export market for U.S. agricultural products in 2010, accounting for 20 percent of U.S. agricultural exports. That totaled $15.1 billion in the first half of fiscal 2011. U.S. agricultural exports this year are projected to be at a record $137 billion and support more than 1.1 million jobs. China will maintain its top position as buyer.

And there’s plenty of room for growth for U.S. exports to China. The U.S. is only the fifth-largest source of imports for China, behind Japan, the European Union, South Korea and Taiwan. As a share of the total China import market, U.S. firms held only a 7.2 percent share, down from 10 percent in 2000.

While the U.S. trade deficit with China continues to grow in absolute terms, they are falling steadily as a percentage of total trade. In 2010 our deficit of $273.1 bil. represented a 60% share of total trade volume of $456.8 bil. In 2000 the deficit of $83.8 bil. represented 72.1% of total bilateral trade volume of $116.3 bil. of which only $16.3 bil. were U.S. exports to China.

More importantly from the standpoint of American jobs, U.S. exports to China are made up of more high value-added goods and services while our imports are mostly lower value-added goods and commodities.

In 2010 the top export categories were: Electrical Machinery ($11.5 billion), Machinery ($11.2 billion), Miscellaneous Grain, Seed, Fruit (soybeans) ($11.0 billion), Aircraft ($5.8 billion), and Optic and Medical Instruments ($5.2 billion).

U.S. exports of private commercial services* (i.e., excluding military and government) to China were $15.7 billion in 2009 (latest data available), 4.1% ($615 million) more than 2008 and 664% greater than 1994 levels. Other private services (business, professional and technical services and education services), travel and the royalties and license fees categories accounted for most of U.S. exports in 2009.

China was the United States’ largest supplier of goods imports in 2010 worth a total of $365 billion. U.S. imports from China accounted for 19.1% of overall U.S. imports in 2010.

The five largest import categories in 2010 were: Electrical Machinery ($90.8 billion), Machinery ($82.7 billion), Toys and Sports Equipment ($25.0 billion), Furniture and Bedding ($20.0 billion), and Footwear ($15.9 billion).

U.S. imports of private commercial services* (i.e., excluding military and government) were $8.2 billion in 2009 (latest data available), down 13.1% ($1.2 billion) from 2008 but up 456% from 1994 level. The other private services (business, professional and technical services), travel, and other transportation (freight services) categories accounted for most of U.S. services imports from China.