Opinion
A huge market for the whole world
By Ming Jinwei (China Daily)
Updated: 2011-04-28 15:12
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Brazilian soybeans, US airplanes, German machinery and Thai tropical fruits: What do they have in common?
The answer is: Increasingly large quantities of them are finding their way into the Chinese market.
More and more countries are discovering an ever-expanding market in China for their staple exports as the 1.3 billion Chinese people start to consume more, supported by rising incomes and encouraged by the Chinese government, which has made achieving balanced trade and boosting domestic demand policy priorities during the next five years.
Some attribute the trade deficit to rising commodity prices, but for others it signifies a crucial long-term trend of the Chinese economy, as China gradually turns itself from the world's factory into a major global marketplace.
Besides the quarterly trade deficit, China's overall trade surplus, a long time source of friction with some of its major trading partners, has steadily decreased in the past couple of years.
Veronique Riches-Flores, head of thematic research at Societe Generale, a major European financial services company based in France, said in a report that the shrinking Chinese trade surplus means the country is becoming a consuming machine rather than an export machine.
The world has a lot to gain from China embarking on a shopping spree. For developing countries, they now have an important alternative market, after exports to developed countries stalled during the global financial crisis.
China became the largest trading partner and the single biggest export market for Southeast Asian countries in 2010. A free trade area was created at the beginning of last year between China and the 10 members of the Association of Southeast Asian Nations (ASEAN). Given the increasing appetite of Chinese consumers for foreign goods, ASEAN countries can expect to sell more to their northern neighbor.
The Chinese market is also important for other major emerging economies. The combined exports to China of Brazil, Russia, India and South Africa, recorded a stellar 52.7 percent year-on-year increase in the first quarter of this year, totaling $33.05 billion. China, now the world's second largest economy, has replaced the United States as Brazil's largest trading partner, as it buys billions of dollars worth of Brazilian agricultural products, crude oil and iron ore.
For Africa, the Chinese market means increasing trade opportunities, and something more. Charles Robertson, global chief economist at Renaissance Capital, a Russian investment bank and research organization, noted in a recently published interview with Moneyweb, a leading source of investment information in South Africa, that total trade between Africa and China was just $10.6 billion in 2000, but it had risen to $129 billion in 2010. And he said there was an additional benefit for African countries that managed to secure development loans from Chinese banks to improve poor infrastructure, which could further help economic development.
For developed countries, selling to China is also essential, especially when many of them are still struggling with high unemployment rates and lackluster economic growth nearly three years after the start of the global financial crisis.
To help the United States emerge from the crisis, US President Barack Obama has long sought to increase exports to China. Indeed, US exports to China have grown faster in recent years than those to other countries. US Treasury Secretary Timothy Geithner has said China could one day become the biggest market for US goods and services.
For European countries, China, once a source of fierce competition for local manufacturers, has increasingly become an important business partner.
Booming trade with China means European companies can sell more of their products to Chinese consumers, which has lifted the share prices of many European industrial powerhouses.
Currently, German exports to China are bigger than those to its traditional European markets like Belgium, Switzerland and Poland.
Clearly, when China buys more, it is good for the rest of the world, but it is also good for China itself.
With more foreign-made products pouring into the Chinese market, Chinese consumers have the opportunity to buy products from around the world, while Chinese companies can use imported equipment and technologies to further their own development.
More balanced trade with the rest of the world can also help ease lingering trade tensions between China and its major trading partners, thus paving the way for more cooperative economic and trade ties.
The author is a writer with Xinhua News Agency.
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