January 8, 2010
James Kynge in today’s Financial Times disputes the received wisdom that, with the collapse in US consumer demand, China has no alternative but to increase domestic demand.
He argues that the huge increase in China’s trade with south-east Asia and Africa, Brazil and India, has been largely ignored.
During the first 10 months of 2009, the trade figures were:
US 13.6% of China’s total trade, Africa and Asean 13.5%, Brazil and India 4%, Australia 2.7% and Russia 1.8 %.
Exports to the EU and US fell 8% and 1.7% year on year respectively in November, while exports to Asean nations surged 20.8%. Imports from Asean were even more impressive, up 45%.
And now we have the China/Asean free trade area. Also, China has replaced the US as Asean’s third-largest trading partner.
The possiblity that China may record an increase in its year-on-year trade value in 2010, will undermine the argument that Beijing’s trade-centric growth model is in urgent need of an overhaul.
This tectonic shift towards Asia may make China progressively less dependent on the US market and correspondingly less inclined to do Washington’s bidding on trade issues.
.Author : Stanley Crossick