What promotes China’s trade surplus?

FDI and processing and assembling trade

FDI’s contribution to China’s exports

YearShare of foreign-

investment enterprises (%)Share of domestic

enterprises (%)2005 62.6 37.4

2006 57.8 42.2

2007 52.9 47.1

2008 45.2 54.8

2009 52.2 47.8

2010 50.5 49.5

2011 41.5 58.5

Table: The share of foreign-investment and domestic enterprises in China’s export growth（ 2005-2011）

 2006 2007 2008 2009 2010 2011

export

import

export

import

export

import

export

import

export

import

export

import

Total 969.08

791.61

1218.02

955.82

1428.55

1133.09

1201.66

1005.56

1577.93

1394.83

1898.60

1743.47

State-owned

enterprise

191.35

225.24

224.81

269.72

257.23

353.81

190.99

288.47

234.36

387.56

267.22

493.40

Foreign-owned

enterprise

563.84

472.62

695.52

559.41

790.62

619.96

672.23

545.21

862.31

738.00

995.33

864.83

Others 213.90

93.76

297.68

126.69

380.70

159.32

338.44

171.88

481.27

269.28

636.05

385.23

Table: Exports and imports of State-owned enterprises and foreign-owned enterprises in China(2006-2011, billion U.S. dollars)

Processing and assembling trade and China’s exports

Year

Processing and assembling

trade (billion U.S. dollars)

Proportion in China’s

foreign trade (%)

Year

Processing and assembling

trade (billion U.S. dollars)

Proportion in China’s

foreign trade (%)

1986 5.62 18.16

1999 110.88 56.88

1987 8.99 22.80

2000 137.65 55.24

1988 14.06 29.59

2001 147.43 55.41

1989 19.79 37.66

2002 179.93 55.26

1990 25.42 40.94

2003 241.85 55.19

1991 32.43 45.10

2004 327.97 55.28

1992 39.62 46.64

2005 416.47 54.66

1993 44.25 48.23

2006 510.36 52.67

1994 56.98 47.09

2007 617.56 50.71

1995 73.70 49.54

2008 675.11 47.19

1996 84.33 55.83

2009 587.00 48.85　

1997 99.60 54.49

2010 740.30 46.92

1998 104.45 56.86

2011 835.40 44.00

Table: China’s processing and assembling trade and its proportion in China’s foreign trade (1986-2011)

In the first three quarters of 2012, private enterprises recorded a sound momentum of growth in imports and exports, growth in general trade continued to outpace that in processing trade

ItemExports Imports

ValueChange（ %） Value

Change（ %）

Total 14953.9 7.4 13470.8 4.8

By form

Ordinary trade 7297.8 8.3 7691.9 3.6

Processing trade 6309.4 3.0 3520.0 1.0

Others 1346.7 27.8 2258.9 16.1

By ownership

SOEs 1927.5 -3.9 3722.8 0.9FIEs 7511.2 3.1 6483.4 1.3Others 5515.2 19.2 3264.6 18.0

Table: China’s imports and exports by form and by ownership, 2012.1-9(US$100m)

China’s comparative advantage and competitive advantage are strong

Labor advantage

　

2006 2007 2008

Local currency

U.S. dollarLocal

currency U.S. dollarLocal

currency

U.S. dollar

China a

1497.2191.7 1740.3 238.4 2016.0

295.2

Japan299600

2518.7 296800 2603.5 2934003233.1

Korea, Rep. b

25948002790.7 2772000 2961.2 2757800

2189.6

Singapore3618.0

2364.7 3764.0 2613.9 3955.02746.5

Table: The average monthly wage of manufacturing employees

Scale advantage, technology advantage and industry advantage

  2001

2002

2003

2004

2005 2006 2007 2008 2009 2010 201

1

Primaryproduct

s

Export

26.34

28.54

34.81

40.55

49.04

52.92

61.51

79.96

63.11

81.69

400.55

Import

45.74

49.27

72.76

117.27

147.71

187.13

243.09

362.39

289.80

433.85

604.38

Manufacturedgoods

Export

239.76

297.06

403.42

552.78

712.92

916.02

1156.27

1352.74

1138.48

1496.07

1798.05

Import

197.81

245.90

340.00

443.96

512.24

604.33

712.86

770.17

716.12

962.39

1139.08

Table: Classification of China’s imports and exports in goods, 2001-2011

(billion U.S. dollars)

  2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Export (billion U.S.

dollars)

46.5 67.9 110.3

165.5

218.2

281.5

347.8

415.6

376.9

492.4

548.8

Growth rate (%)

25.5 46.02

62.44

50.05

31.84

29.01

23.55

19.49

-9.3 30.7 11.5

The proportion

in total exports (%)

17.5 20.8 25.2 27.9 28.6 29.1 28.6 29.1 31.4 31.2 29.0

Import (billion U.S.

dollars)

64.1 82.8 119.3

161.4

197.7

247.3

287.0

341.9

309.8

412.7

462.9

Growth rate (%)

22.1 29.2 44.08

35.29

22.49

25.09

16.05

19.13

-9.4 33.2 12.2

The proportion

in total imports (%)

26.3 28.1 28.9 28.8 30 31.2 30 30.2 30.8 29.6 26.6

Net export (billion U.S.

dollars)

-17.6

-14.9

-9.0 4.1 20.5 34.2 60.8 73.7 67.1 79.7 85.9

Table: China’s foreign trade of high-tech products (2002-2011)

Small proportion of China’s services trade deficit

  1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Transportation

-0.54

-0.49

-0.53

-0.48

-0.42

-0.41

-0.40

-0.34

-0.30

-0.24

-0.16

-0.13

-0.33

-0.30

-0.39

Travel 0.20

0.16

0.13

0.11

0.12

0.14

0.07

0.15

0.15

0.16

0.11

0.06

-0.05

-0.09

-0.20

Communication

services

-0.03

0.60

0.51

0.70

-0.09

0.08

0.20

-0.03

-0.09

-0.07

0.04

0.03

0.00

0.04

0.17

Construction

services

-0.34

-0.31

-0.22

-0.25

-0.01

0.13

0.04

0.05

0.24

0.17

0.30

0.40

0.23

0.48

0.60

Insurance services

-0.71

-0.64

-0.81

-0.92

-0.85

-0.88

-0.87

-0.88

-0.87

-0.89

-0.84

-0.80

-0.75

-0.81

-0.74

Financial services

-0.84

-0.72

-0.20

-0.11

0.12

-0.28

-0.21

-0.19

-0.33

-0.80

-0.50

-0.33

-0.27

-0.04

0.07

Computer &

information

services

-0.47

-0.43

0.09

0.15

0.14

-0.28

0.03

0.13

0.06

0.28

0.32

0.33

0.34

0.51

0.53

Table: TC index of China’s services trade (1997-2011)

Royalties & license

fees

-0.82

-0.74

-0.83

-0.88

-0.89

-0.92

-0.94

-0.90

-0.93

-0.94

-0.93

-0.89

-0.93

-0.88

-0.91

Consulting

-0.15

-0.19

-0.30

-0.29

-0.26

-0.34

-0.29

-0.20

-0.08

-0.04

0.03

0.15

0.16

0.20

0.21

Advertising,

media

-0.01

-0.11

0.00

0.05

0.04

-0.03

0.03

0.10

0.22

0.17

0.19

0.07

0.07

0.18

0.18

Film, audiovis

ual

-0.63

-0.44

-0.67

-0.54

-0.29

-0.53

-0.35

-0.62

-0.33

0.00

0.20

0.14

-0.50

-0.60

-0.60

Other business services

0.19

0.07

0.02

0.07

0.12

0.28

0.40

0.31

0.29

0.27

0.19

0.06

0.14

0.35

0.28

Government

services

-0.58

-0.85

-0.76

0.24

0.30

-0.10

-0.12

-0.17

-0.09

0.09

-0.20

-0.13

0.06

-0.05

-0.16

11

ijijij

ijijij TC

MX

MXTC

RMB’s exchange rate is not the key for China’s trade surplus

The pressure of appreciating RMB

RMB’s appreciation can not solve the problem of trade imbalance

 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

U.S. exports (billion U.S.

dollars)

19.2

22.1

28.4

34.7

41.8

55.2

65.2

71.5

69.6

91.9

% change18.3

15.1

28.5

22.2

20.6

32.1

18.1 9.5 -2.6

32.1

U.S. imports (billion U.S.

dollars)

102.3

125.2

152.4

196.7

243.5

287.8

321.5

337.8

296.4

364.9

% change 2.2 22.4

21.7

29.1

23.8

18.2

11.7

5.1-

12.3

23.1

Total (billion U.S. dollars)

121.5

147.3

180.8

231.4

285.3 343

386.7

409.2

366.0

456.8

% change21.4

21.2

22.8

28 23.3

20.2

12.7

5.8-

10.6

24.8

U.S. balance (billion U.S.

dollars)

-83.0

-103.1

-124.0

-162.0

-201.6

-232.5

-256.3

-266.3

-226.8

-273.1

Table: Trade between China and the U.S. (2001-2010)