US-China trade hits high, deficit narrows
Updated: 2013-12-05 11:44
By Amy He in New York (China Daily USA)
US imports and exports with China hit an all-time high in October, according to a new report from the US Department of Commerce.
Exports to China in October increased to $13.1 billion from $9.6 billion in September, and imports increased to $41.9 billion from $40.1 billion, according to the figures released on Wednesday.
While the trade gap between the US and China - the world's second-biggest economy behind the US - is higher than that of any other country with the US, it decreased to $28.9 billion in October from the $30.5 billion in September. Exports to China for the year to date are $95.8 billion; imports are at $362.8 billion year-to-date.
The Commerce Department said that exports increased primarily in soybeans, while imports rose mainly on computers, toys and sporting goods.
The overall US trade deficit narrowed to $40.6 billion, down 5.4 percent from the revised $43 billion for September. Total exports for October were at $192.7 billion while imports were $233.3 billion.
The US saw the most year-on-year export increase in industrial supplies and materials and capital goods, and the most year-on-year import increase in consumer goods and automotive vehicles and parts.
In addition to China, exports to Canada and Mexico were also at all-time highs, according to the data. The US exported $26.8 billion in goods to Canada and $21.2 billion to Mexico.
Economists cautioned that US-China trade on the whole remains imbalanced and will only continue to increase.
Robert Scott, director of Trade and Manufacturing Policy Research at the Economic Policy Institute, said the record US-China import-export high in October was a "blip," since it's hard to read into monthly data.
He noted that the US exports raw materials and commodities to China, which then uses the materials to produce goods that are exported back to the US.
"What we've seen is that despite the overall improvement in the US balance of trade in the world as a whole - it's come down about 6.3 percent this year - the trade deficit with China is up so far through September of 2013," he said. "In broad terms, China's share is growing and our trade with the rest of the world is improving."
Scott said that the trade deficit between US and China doesn't seem to be slowing down - that it just keeps getting "worse and worse" - which he attributed to China's intervention with the foreign exchange market this year, a reversal after a quiet 2012.
"China is once again depressing the value of their currency, which is going to make its goods artificially cheap, and increase its unfair advantage in this market and around the world where we compete with China," said Scott.
He also cited recent research that showed foreign currency intervention "directly translates into large and growing account surplus," and China's trade surplus overall in the world will grow "at the expense" of the US.
"I think it's inadvisable for China to be continuing to manipulate its currency, spending hundreds of billions of dollars investing in low-yielding US Treasury bills that would be better spent at home, stimulating the domestic economy. That's what China needs to be doing that would be a sustainable path for growth," he said.
(China Daily USA 12/05/2013 page2)