The numbers for 2021 US trade in goods were published
yesterday. China of course published their data earlier, because it’s so easy
to survey 1.4 billion people in a middle-income country. The two sets of
results strengthen previous patterns: Electronics dominated, with commodities
playing a secondary role. They also serve as one set of measurements of
comparative American and Chinese vulnerability.
The PRC was the world’s top exporter, at $3.36 trillion in
2021, near 19 percent of its GDP (all
data here). Hong Kong was said, misleadingly, to receive more Chinese exports
than Japan and South Korea combined. In fact, goods largely route through Hong
Kong to final destinations. Ignoring this flaw, the US topped all countries,
receiving one-sixth of Chinese exports.
Imports were $2.69 trillion, yielding the largest goods
trade surplus in world history at $677 billion, or about 3.8 percent of Chinese
GDP. This compares to 3.4 percent in 2020 — China’s economy became more
export-dependent last year. Remarkably, the largest single source of imports
was tiny Taiwan, at 9 percent.
By category, the top export was “Electrical machinery and
equipment and parts thereof; sound recorders and reproducers, television image
and sound recorders and reproducers, and parts and accessories,” at 29 percent
of the total. This is heavily consumer electronics. It was also the top import
category, at one-fourth of the total.
Oil and gas was the PRC’s second-largest import at 15
percent. Putting countries and products together, oil and gas suppliers were
quite diversified, reflecting many
years of effort on Beijing’s part. Hong Kong was nominally the largest
destination for electronics exports, while the US led among actual countries,
accounting for 4 percent of total Chinese exports with just our electronics
purchases.
On the import side, electronics from Taiwan were the biggest category, at over 6 percent of the total. The next slot went to Australian metal ores, at 4 percent of total imports. It’s no accident that China’s sanctions against Australia never included ore. Imports of integrated circuits rose 27 percent to $432 billion, 16 percent of the total and nearly as large as crude oil and iron ore combined. Beijing’s loud effort to become less dependent in chips has not yet worked.
On the American side (also goods only — services data are slower), the 2021 deficit slightly exceeded $1 trillion. Imports stood at $2.83 trillion, or over 12 percent of GDP. Exports, imports, and the deficit all set records. Canada and Mexico were the main two export partners, while China easily topped importers at near 18 percent of the total.
The leading US export was pharmaceutical preparations
at $83 billion, or close to 5 percent of the total. Aircraft and parts were
second near $80 billion. Autos and parts combined topped imports at $259
billion. Pharmaceuticals were next at $171 billion. The pharmaceutical trade
deficit is an American vulnerability, especially considering that China dominates the chemical industry supplying
pharmaceutical manufacturing.
Using US data regarding bilateral trade, American exports to
China set a record in 2021. Despite this, the goods trade deficit was $355
billion, rising over the course of the year. The trend reflected the broad
demand recovery from the COVID blow.
By product, the top American export to the PRC was soybeans
at $14.1 billion. Semiconductors were second, at a record $13.4 billion. These
figures are dwarfed by the import side, where cell phones led at $75 billion
and computers were next at $59 billion. Those were record highs and China
accounted for over half of 2021 US imports in both categories.
At the macroeconomic level, China’s goods exports to the US
continue to account for approximately 3 percent of its annual GDP. The US
reports goods imports from the PRC are the equivalent of a bit over 2 percent
of our GDP. Flows heading from America to China are smaller.
Drilling down a bit, the electronics supply chain stands out. By volume, it starts with China’s large imports from Taiwan, which help feed its huge electronics exports in general and sizable consumer electronics exports to the USin particular. There are strong economic incentives for China to attempt to displace or control the Taiwanese component of this chain.
The post US and China 2021 trade numbers appeared first on American Enterprise Institute – AEI.