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Economy in Brief

China's Trade Balance with the U. S. Heading for More Than $100 billion This Year
by Louise Curley December 19, 2005

China's total balance of merchandise trade declined $328 million in November from $7,188 million in October to $6,860. China's trade balance with the United States, however, increased $267 million to $10,583 million from $10,315 million in October. Through November of this year, the cumulative over-all balance of trade was $92,049 million and that with the United States $103,348 million.

China typically runs an even larger favorable balance of trade with Hong Kong. In 2004, the balance with Hong Kong was $89,326 million compared with $80,321 million for the United States. In both countries, a large part of the Chinese exports are the products of Hong Kong and U.S. factories built in China. Because of its special relationship with China, Hong Kong is much less concerned with the imbalance in its trade with China than is the United States. The other area where China has a significant positive balance of trade is Europe. Over the past five years, the balance of trade with the United States has almost always been larger than the total balance as shown in the first chart.

China does have substantial trade deficits on merchandise in many Asian countries. The largest of these are Taiwan, Korea and Japan. In the second and third charts, China's exports to and imports from Korea and Japan are shown. The deficit with Korea, as shown by the difference between the two series, has been growing steadily over the past several years. The deficit with Japan had been narrowing, but more recently has widened.

China:  Merchandise Trade Balances (Millions US$)  Nov 05   Oct 05  Nov 04  M/M Dif Y/Y Dif 2004  2003  2002 
Total 6,860 7,188 7,531 -328 -671 32,569 25,389 30,426
United States 10,583 10,316 8,344 267 2,240 80,321 58,627 42,731
Europe n.a. 5,976 4,817 n.a. n.a. 33,648 18,401 5,770
Hong Kong n.a. 10,292 8,738 n.a. n.a. 89,326 65,185 47,695
Taiwan -5,378 -5,315 -4,140 -63 -1,238 -51,212 -40,350 -31,493
Japan -2,631 -2,123 -1,458 -508 -1,173 -20,655 -14,750 -5,001 
Korea -3,806 -4,047 -2,687 241 -1,119 -34,356 -23,056 -13,073
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