China's trade surplus: Made in China by foreign-owned factories

15:51, December 10, 2010      

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China's exports continue to grow and show signs of full recovery, which improve its trade surplus. Foreign companies are playing the leading role in that process.

With both imports and exports hitting a record high in November, China's trade surplus reached 170 billion U.S. dollars over the first 11 months of 2010. Although that still marks a decline of 3.9 percent year on year, the speed of decline is significantly softer than the 30.6 percent plunge in the same period of 2009.

Foreign-funded companies in China are apparently the engine of that robust recovery. Their 112.5-billion U.S.-dollar surplus accounts for 66 percent of China's total surplus over the past 11 months. Specifically, more than half of China's imports and exports during this period are from foreign companies operating in this country.

Their dominance in processing trade seems hard to challenge. Their 242 billion U.S. dollars of surplus in the processing trade accounted for 83 percent of China's total surplus on processing trade in this period.

However, the growth rates of both the imports and exports made by foreign companies are well below the country’s total imports and exports. In addition, the competition pressure from China's non-public manufacturers is rising.

Imports and exports by the non-public sectors reached 670 billion U.S. dollars from January to November. Although it is less than half of their foreign competitors, it marks a year-on-year jump of 48 percent, which is 12 percentage points higher than the 36 percent rise of the country's total foreign trade.

Electronic-mechanic products make up 59 percent of China's total exports over the first 11 months of the year.

Imports of iron ore and steel were down, but their prices were all up sharply.

Auto imports doubled to 725,000 units.

By Li Jia, People’s Daily Online


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