Jake's View | Americans love the goods China’s factories make, even as the White House itches for a trade war
China’s massive trade surplus with the US may be a headache for American officials, but there are few substitutes for the goods rolling out of Chinese factories.
Record surplus with US fuels fear of trade war
-- SCMP headline, January 13
It’s worse than it looks. Our story, quoting China’s figures, said this 2017 trade surplus with the US amounted to US$275 billion. The real figure is about US$100 billion bigger.
The difference is mostly Hong Kong. I am not about to say that the authorities in Beijing cheat on the figures outright, but they have played a little fast and loose with the facts. Goods shipped to the United States in the form of re-exports through Hong Kong are treated as exports to Hong Kong, not to the US.
These exports have nothing to do with us, of course, except that they are loaded on to ships bound for the US, at our port. The subterfuge fools no one on the other side of the ocean. The American authorities, quite rightly, treat it all as imports from China.
The first chart sets out how it all looks. The blue line represents the mainland’s merchandise trade surplus as a rolling 12-month total. The red line underneath it shows you the true portion of it that results from trade with the US. The grey line further down represents Beijing’s understated figures.
Worth noting here is that trade with the US accounted for all of the mainland’s trade surplus over most of the last eight years. With the rest of the world the mainland ran a trade deficit. Present trends suggest we may see this again soon.
