AP IMPACT: China surpasses US as top global trader
Associated Press
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Updated 5:47 p.m., Sunday, December 2, 2012
In just five years, China has surpassed the United States as a trading partner for much of the world, including U.S. allies such as South Korea and Australia, according to an Associated Press analysis of trade data. EDITOR'S NOTE — This is the first installment in "China's Reach," a project that will analyze China's influence with its trading partners over three decades, and explore how that is changing business, politics and daily life. In the most abrupt global shift of its kind since World War II, the trend is changing the way people live and do business from Africa to Arizona, as farmers plant more soybeans to sell to China and students sign up to learn Mandarin. Trade may get less publicity than military affairs or diplomacy, yet it is commerce that generates jobs and raises living standards. Governments listen to countries that buy their goods, and the threat to stop buying is one of the most potent diplomatic weapons. "When a German chancellor or French president goes to China, right at the top of the list, he's trying to sell Airbuses and other products and is being sensitive to China's political concerns, like on human rights," said C. Fred Bergsten, a former U.S. Treasury Department official who heads the Peterson Institute for International Economics in Washington. [...] even though Chinese companies invest abroad and employ thousands of foreign workers, they lag behind American industry in building global alliances and in innovation, which is still rewarded in the marketplace. China's competitive edge remains low labor and other costs, while the U.S. is the world's center for innovation in autos, aerospace, computers, medicine, munitions, finance and pharmaceuticals. In the U.S., Vermont-based manufacturer SBE Inc. started exporting capacitors — energy-storage devices used in computers, hybrid cars and wind turbines — in 2006. Chinese ate more pork, fried chicken and hamburgers, rapidly sending up the demand for soybeans to make cooking oil and feed for pigs and cows. The boom is having a profound effect on farming communities, said Grant Kimberley, whose family farm near Des Moines, Iowa, now grows 4,000 acres of soybeans, up from 3,500 eight years ago. Chinese companies have boosted exports by 7 percent this year despite anemic global demand. Rising incomes have driven demand for wine and other luxury goods, making China a lifeline for European and American vineyards when the global crisis battered traditional markets. The investment trend started with state-owned companies that bought stakes in foreign mines and oil fields. Smaller and private Chinese companies followed, acquiring foreign enterprises to gain a bigger foothold in overseas markets, more access to resources and better technology for their own development. In Algeria, Chinese state-owned companies pushed aside established French and German rivals to win contracts to build a $12 billion cross-country highway and the $1.3 billion Great Mosque of Algeria. Chinese companies are starting to win government contracts in Kenya, which has ports that offer access to landlocked Uganda, South Sudan and Rwanda. Governments in Africa are keen to work with China because it does not tie development to human rights or democracy, said Stephen Mutoro, secretary general of the Consumer Federation of Kenya. In 2008, the two governments signed a $9 billion deal for Chinese companies to build 177 hospitals and health centers, two hydroelectric dams and thousands of miles of railways and roads. China's outbound investment totaled $67.6 billion last year — just one-sixth of America's nearly $400 billion — but it could reach $2 trillion by 2020, according to a forecast by Rhodium Group, a research firm in New York City. Employees at Volvo Cars worried after Chinese automaker Geely Holdings bought the money-losing Swedish brand from Ford Motor Co. in 2010. EDITOR'S NOTE _ This is the first installment in "China's Reach," a project that will analyze China's influence with its trading partners over three decades, and explore how that is changing business, politics and daily life. Reported by SeattlePI.com 1 day ago.
Associated Press
Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Updated 5:47 p.m., Sunday, December 2, 2012
In just five years, China has surpassed the United States as a trading partner for much of the world, including U.S. allies such as South Korea and Australia, according to an Associated Press analysis of trade data. EDITOR'S NOTE — This is the first installment in "China's Reach," a project that will analyze China's influence with its trading partners over three decades, and explore how that is changing business, politics and daily life. In the most abrupt global shift of its kind since World War II, the trend is changing the way people live and do business from Africa to Arizona, as farmers plant more soybeans to sell to China and students sign up to learn Mandarin. Trade may get less publicity than military affairs or diplomacy, yet it is commerce that generates jobs and raises living standards. Governments listen to countries that buy their goods, and the threat to stop buying is one of the most potent diplomatic weapons. "When a German chancellor or French president goes to China, right at the top of the list, he's trying to sell Airbuses and other products and is being sensitive to China's political concerns, like on human rights," said C. Fred Bergsten, a former U.S. Treasury Department official who heads the Peterson Institute for International Economics in Washington. [...] even though Chinese companies invest abroad and employ thousands of foreign workers, they lag behind American industry in building global alliances and in innovation, which is still rewarded in the marketplace. China's competitive edge remains low labor and other costs, while the U.S. is the world's center for innovation in autos, aerospace, computers, medicine, munitions, finance and pharmaceuticals. In the U.S., Vermont-based manufacturer SBE Inc. started exporting capacitors — energy-storage devices used in computers, hybrid cars and wind turbines — in 2006. Chinese ate more pork, fried chicken and hamburgers, rapidly sending up the demand for soybeans to make cooking oil and feed for pigs and cows. The boom is having a profound effect on farming communities, said Grant Kimberley, whose family farm near Des Moines, Iowa, now grows 4,000 acres of soybeans, up from 3,500 eight years ago. Chinese companies have boosted exports by 7 percent this year despite anemic global demand. Rising incomes have driven demand for wine and other luxury goods, making China a lifeline for European and American vineyards when the global crisis battered traditional markets. The investment trend started with state-owned companies that bought stakes in foreign mines and oil fields. Smaller and private Chinese companies followed, acquiring foreign enterprises to gain a bigger foothold in overseas markets, more access to resources and better technology for their own development. In Algeria, Chinese state-owned companies pushed aside established French and German rivals to win contracts to build a $12 billion cross-country highway and the $1.3 billion Great Mosque of Algeria. Chinese companies are starting to win government contracts in Kenya, which has ports that offer access to landlocked Uganda, South Sudan and Rwanda. Governments in Africa are keen to work with China because it does not tie development to human rights or democracy, said Stephen Mutoro, secretary general of the Consumer Federation of Kenya. In 2008, the two governments signed a $9 billion deal for Chinese companies to build 177 hospitals and health centers, two hydroelectric dams and thousands of miles of railways and roads. China's outbound investment totaled $67.6 billion last year — just one-sixth of America's nearly $400 billion — but it could reach $2 trillion by 2020, according to a forecast by Rhodium Group, a research firm in New York City. Employees at Volvo Cars worried after Chinese automaker Geely Holdings bought the money-losing Swedish brand from Ford Motor Co. in 2010. EDITOR'S NOTE _ This is the first installment in "China's Reach," a project that will analyze China's influence with its trading partners over three decades, and explore how that is changing business, politics and daily life. Reported by SeattlePI.com 1 day ago.