China piped the US in 2013 to become the world’s largest trader with total trade rising to 7.6 percent over the year to US$4.16 trillion. While the US’s trade figures are yet to be released their 11 month trade number totalling US$3.5 trillion, signals China’s rising economic dominance worldwide. The figures also depict the yawning trade deficit China shares with India, which stood at US$ 31.4 billion in 2013, with two-way trade declining last year by 1.5 percent on account of a sharp decline in Indian exports, enabling China better bargaining power in the region.
As reported in the Hindu, Indian exports to China last year totalled US$ 17.03 billion – a 9.4 percent fall from last year – out of US$ 65.47 total bilateral trade, according to figures released by the Chinese General Administration of Customs (GAC). Chinese exports to India, in recent years largely comprised of machinery, were up 1.6 percent.
Despite a sagging global economy and currency appreciation, over 2013, China’s exports rose 7.9 percent to US$2.21 trillion and imports rose 7.3 percent to US$1.95 trillion. China had already become the world’s largest exporter of goods in 2009 and world’s largest importer of oil in 2013. The value of Chinese trade has roughly doubled every four years over the past three decades. The new landmark milestone for the country, will form the basis for rapid growth and expansion as outlined in the recent economic reforms announced by President Xi Jinping in November last year.
Increasing trade with Africa, the Middle East and the rest of Asia, helped China attain this all powerful position, similar to trade during the Qing dynasty 1644-1912, also when China ruled global trade. Historians and economists are however also concerned as trade being cyclical, China can just as easily lose her place on the mantle. About a third of China’s trade involves assembly and re-export of components produced elsewhere, with the decline in components brought to China to be assembled and re-exported, China will see slower growth in manufacturing over the next decade.
Nonetheless, as China releases monetary and financial controls, and works towards balancing her economic systems, trade is only going to increase. The economic dominance will play out as Beijing’s opinion sways markets in Europe and stifles the seas in her neighbourhood. Her raising clout will not only determine her foreign policy but will also display her true might. Lets hope the power doesn’t go to her head.