My Loans Consolidated

Just before New Years eve last year, China’s vice-minister of trade, Zhong Shan, declared that China will be continuing to increase its share of world exports. According to figures released on January 11th, showed that China’s exports in December were higher than a year before after 13 months of declines. In 2009, China’s exports decreased by 17% but then again, other countries’ exports fell by even more than that. Because of this, despite China’s decrease in export then, it was still able to overtake Germany to become the world’s largest exporter. If you see the chart below, you will find that China’s share of world export jumped to almost 10%, which in 1999 was only 3%.

In America’s market, China takes an even bigger slice. America imported 15% less from China in the first 10 months of 2009 than in the same period of 2008. But then again, America’s imports from the rest of the world fell by 33% which results in China’s market share being lifter to a record 19%. America’s trade deficit with China did narrow, however, because of China’s big slice in America’s market, it now accounts for almost half of America’s total deficit. This is higher than one-third in 2008.

So far it looks as though the economic forecast that mentions a shift in economic power from America to Asia is happening. The meeting of G-20 in April 2009 acknowledged this shift due to the global financial shake-up. While China’s export is predicted to continuely increase as it rapidly has recently, trend research Gerald Celente says that America will go through a year where ‘made in China’ is no longer welcome. The first sign that will become massive is the “buy local/my country first” movement in 2010. Consumer crusade rejecting everything “made in China” will spread among developed nations. In the end this will trigger trade wars and protectionism.

To read more about China’s export prospects, go to the Economist.

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