After establishing relations with the United States and imposing the One-Child Policy, China, in 1986, opened the country to foreign investments and encouraged the development of a market economy and private sector.
China also started the long process to join the World Trade Organization (WTO). It took China another 15 years of diplomatic struggle to became a full member of the WTO. To join, China had to significantly change its economy. These changes were difficult steps for China and conflicted with its prior economic strategy. Acceptance into the WTO meant China had to engage in global competition according to rules that it did not make
The BBC reported, “China’s formal membership comes exactly one month after the 142 members of the World Trade Organisation (WTO) ratified its application at the world trade talks in Doha in the Gulf state of Qatar, and the Chinese government formally approved the deal.”
What happened to China after joining the WTO?
WTO.org said, “in 2001, China’s trade in goods was valued at $0.51 trillion, ranking 6th in the world, but by 2014, it reached $4.3 trillion, growing over 8 times.”
By 2016, China was exporting $2.27 trillion in goods and importing $1.23 trillion,” and OEC report said.
China’s top five export destinations were the United States at $436 billion (19% of the total), $250-billion (11%) to Hong Kong, $148 billion (6.6%) to Japan, $99 billion (4.4%) to Germany, and $87.2 (3.8%) billion to South Korea. If we subtract the United States, China exported $1.834 Trillion worth of goods to the rest of the world.
China also buys products from the United States and other countries. It’s top four import countries were the United States at $122 billion (9.9%) in goods, $121-billion (9.8%) from South Korea, $120 billion (9.8%) from Japan, and $83.7 billion (6.8%) from Germany.
If we subtract what China buys from the United States, China imports good worth $1.08 Trillion from the rest of the word, and did you notice that China has a trade deficit with some countries? If we focus on just South Korea, China bought more goods than it sold by $33.8 billion.
What goods does China want from other countries? China’s highest value imported goods are electronic circuits and micro-assemblies, crude oil, iron, cars, mobile phones, and then soya beans.
In 2017, China exported $2.2 trillion of its production. The EU exported $1.9 trillion that year.
There is also a common misconception that the United States doesn’t make anything anymore, and it doesn’t help that Donald Trump, a malignant narcissist, and serial liar, reinforced that thinking during the presidential debates in 2016.
What do the facts say?
The Balance reports, “2017, total U.S. trade with foreign countries was $5.2 trillion. That was $2.3 trillion in exports and $2.9 trillion in imports of both goods and services.” China exported $2.2 trillion to the world that year, less than the United States exported from its manufacturing sector.
How many jobs in the U.S. does that $2.3 trillion in exports support and how many jobs are at risk in the United States due to Mr. Trump’s trade war?
CNN Money says, “analysts say that tens of thousands of American workers are likely to lose their jobs—and upwards of two million jobs are at risk—more or less as a direct consequence of the Trump administration’s trade policies, and the retaliatory tariffs that follow.”
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