While many European countries and the USA struggle with the impact of the recession, China’s economic juggernaut showed the strength of its recovery with exports rising for the first time in 14 months and imports soaring by a staggering 56 per cent in December from a year earlier. China’s exports accelerated by 17.7 per cent in December from a year earlier, far outstripping the expected 4 per cent rise to break 13 months of decline. The other main aspect of this story is that this recovery enabled China to overtake Germany as the as the world’s biggest exporter — a new sign of the rapid Chinese rise as a global economic force. Between January and November 2009, Chinese exports were worth $1.07 trillion, while data from the German national statistics office showed that exports from the European heavyweight amounted to $1.05 trillion.
What are the implications of this trend? China is already under pressure from the US in particular concerning the ‘managed’ exchange rate between the Yuan and the Dollar and the large trade deficit the US is running as a consequence. With the election of President Obama and the greater numbers of Democrats, there are increasing political pressures to extend protectionist measures by imposing tariffs on Chinese imports. However, it needs to be recognised that Chinese imports are rising even faster than its exports – narrowing the trade surplus.
