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Home Publications Blogs Beat the Press U.S. Imports from China Hit a New Record

U.S. Imports from China Hit a New Record

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Thursday, 19 April 2012 05:06

Remarkably this fact did not appear in a Washington Post article discussing U.S. trade with China, which did find room to tell readers that:

"But U.S. exports to China, whose growing affluence has increased the appetite for American goods, are now reaching record levels."

While it is true that exports to China have reached a record high, this is true of imports as well, if we compare the same months of 2012 with the corresponding months of 2011. (In other words, we are controlling for seasonal effects.) The failure to note the record level of imports is especially surprising since our imports from China matter much more than out exports to China.

We are importing goods and services from China at the rate of more than $400 billion a year, whereas our exports are just a bit over $100 billion a year. This means that imports have close to four times the impact in reducing growth and employment as exports have in the opposite direction.

In discussing the issue of the relative value of the dollar and the Chinese currency it would have been useful to point out that important interests in the United States do not want to see China increase the value of the yuan. For example, Walmart has devoted considerable resources to developing a low-cost supply chain in China and other developing countries. This gives it an enormous advantage over its competitors.

Walmart is not anxious to have this advantage eroded by an increase in the value of the yuan relative to the dollar.  The same is true of many companies that have established manufacturing operations in China for the purpose of exporting goods back to the United States and other countries.

This means that the debate over the relative value of the yuan and the dollar is not simply a debate between China and the United States. It is also a debate that pits different groups in the United States against each other. 

Comments (9)Add Comment
Chief Doofuss In Charge of Errors
written by dilbert dogbert, April 19, 2012 11:23
If you need more from the NYT to write about, check out Casey Mulligan. I am guessing early Alzheimer's.
...
written by Andrew Clearfield, April 19, 2012 1:44
I agree the article is misleading, but so is your response. Comparing our imports to our exports with a single country is no more informative than simply stating - as this article did - the absolute value of our exports with a single country. Only one thing matters when it comes to the value of trade: the ratio of our imports to exports GLOBALLY. After all, we can import a zillion X's from China and export 0 X's to them, but this would still be good for us so long as it allowed us to use our workforce more productively then we otherwise could and thereby increase our exports of Y's to another country or decrease our imports of X's from another country.
ok, let's talk about china & the united states
written by mel in oregon, April 19, 2012 4:42
first the dark side, we all remember tiananmen square & the great leap forward. how many chinese starved? estimates are as high as 45 million. pretty bad! however our own death tolls from slavery & the genocide of native americans are far higher. so currently where does china stand ahead of us? some estimates show china's economy 20% larger than ours. others say they will surpass us in 2016. at any rate china's economy has increased 4000% in the last 30 years, ours has doubled. china produces more cars than america & japan combined. matter of fact, general motors sells more cars in china than they do in the united states. one of the reasons germany has a lower unemployment rate than we do is they sell so much equipment to china. china has the largest high-speed rail in the world. do we have one? nope! 95% of chinese are covered by national healthcare, & it's far cheaper than ours. we leave out millions, & it's estimated at least 50,000 people in america die from lack of healthcare every year in the united states. another 100,000 die from infections picked up while in the hospital for an unrelated problem. the point of my story is if china can do all this in such a short time, why can't we move from such a media & money dominated idiocracy?
Clearly
written by David, April 19, 2012 8:06
C'mon Clearfield, really? Is the haze in your brain that thick?

Here are the trade balances with our top 15 trade partners (see below), gotten from here http://www.census.gov/foreign-...202cm.html. Notice that the deficit with China adds up to the total deficits of all our other top trade deficits, excepting Japan. So, to say Dean's response is misleading is, well, misleading. If we get China back near -2 to -3, then we can worry about the whole picture, but right now, China is about half of that big picture. So, let's keep it real.

1Canada -2.8
2Mexico -5.8
3China -19.3
4Japan -7
5Germany -3.6
6United Kingdom 1.1
7Korea, South -0.4
8Brazil 0.5
9France -0.6
10Saudi Arabia -2.8
11Netherlands 1.1
12India -1.5
13Taiwan -0.9
14Venezuela -1.9
15Switzerland 0.2
those figures are from February 2012
written by David, April 19, 2012 8:10
(forgot to mention that) I need to go eat and live a life, but I'll bet it's a decent reflection of the import of the situation (pun intended).
...
written by Andrew Clearfield, April 19, 2012 11:00
Re David: I like your response, but I'm gonna double down - because, well, why not?. So here goes: to the degree that our imports from China are for goods for which we (meaning U.S. companies) are 2nd best placed to supply, then yes, THAT number obviously matters, and reducing our imports of those goods would positively affect our total (meaning global) deficit. But for all other goods for which we are not 2nd best placed, our deficit with China is basically meaningless (for the sake of the topic of the blog post and our comment discussion here - obviously this deficit matters for many other reasons). So yes, the fact that our trade with China accounts for most of our deficit means that reducing that deficit would likely reduce our global deficit (since some of the goods we get from China are surely goods that we are 2nd best placed to supply to Americans) but I repeat that just telling me what our deficit with China is, is not particularly revealing.
...
written by Andrew Clearfield, April 19, 2012 11:21
by the way - a perfect illustration of the government-directed upward redistribution that Dean often complains about. The highlights: 1) The LSAC (the company that administers the law school entrance exam, the LSAT) has assets of 190 million dollars and profits of, I believe (the article was a bit unclear) 17.5 million 2)the LSAC spends 1 million on lobbying each year; 3) and the LSAC is going to raise its fees by 15% next year even though its fees currently exceed the costs of administering the test.

See full article here: http://balkin.blogspot.com/201...chool.html
Stupid Facts
written by sherparick, April 20, 2012 8:36
If both the U.S. and China's economies are growing, and trading with each other, then every month, once the economies have reached their pre-recession peaks, will likely be a new high (on a year over year basis), at least in nominal terms. It is amazing what lies our rich tell themselves, each other, and rest of us.
Terms
written by David, April 20, 2012 8:39
Andrew, I can see where the remarks were maybe "not particularly revealing" but "misleading" means something else. Yet Dean's are somewhat revealing too, I believe, since 2nd best at less than half the selling cost of 1st best will outperform (walmart, dollar stores rely on this). So first place manufacture gets delegated to China too: labor it's cheap, and arbitrage via the use of imports seals the deal. The size of the trade deficit takes the temperature of the ill patient. Thermometers aren't particularly revealing about the illness, but they do give useful information, even saving lives.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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