14% Plunge in US Exports: Is It a Cliff Dive?
The country has released the latest export data for November. The total export volume of our country to the United States in the first 11 months of this year has reached 457.7 billion US dollars, which is a significant decrease of 13.8% compared to the same period last year.
Is this bad news?
But in fact, it is likely to be good news. From a single piece of data, we can clearly see that the pattern of China's exports is improving in the opposite direction.
Firstly, the newly released November foreign trade export data reflects that China's exports have shown positive growth for the first time since May this year.
In November, China's exports reached 2.1 trillion yuan, a 1.7% increase compared to the same period last year, calculated in RMB. If calculated in US dollars, China's foreign exports in November increased by 0.5% compared to the same period, and the surplus also expanded by 4%.
Of course, looking at only a single month's increase is related to the low base of the same period last year. In November 2022, China's exports decreased by 8.7%, which was a relatively large drop, so in November of this year, China showed a year-on-year positive growth.
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However, if we look at the cumulative data for the first 11 months, exports also increased by 0.3% year-on-year, which is commendable in the context of the global trade downturn.
It is worth noting, however, that among the top three of China's export trade, the decline in exports to the United States is the largest.
In the first 11 months of this year, the scale of China's exports to the United States decreased by 13.8% year-on-year.
Looking back at history, since China joined the World Trade Organization, China's exports to the United States have rapidly increased, and even surpassed Canada in 2014 to become the United States' largest trading partner.However, after 2018, the scale of China-US trade began to decline, primarily due to the United States initiating a trade war against China, including the imposition of additional tariffs on our country's export goods.
Nevertheless, by 2020, as a result of the outbreak of the pandemic, China was the first to resume work and production, hence the majority of the United States' medical supplies were sourced from China's exports to the US. The total trade volume between China and the US once again increased, and China regained its position as the largest partner of the United States.
However, this year, our country has slipped to the third position in the ranking of the United States' import countries.
According to data, Mexico and Canada currently hold the first and second positions as the largest import countries to the United States, with trade with Mexico accounting for 15% of the total foreign trade of the United States. In contrast, the proportion of China-US trade only amounts to 12%.
Mexico's ability to become the largest trading partner of the United States is partly due to its advantageous geographical location, and on the other hand, it is due to the signing of a free trade agreement between the two countries, which has brought the trade relations between the United States and Mexico closer. After all, the agreement abolished tariffs and trade restrictions, greatly facilitating trade exchanges between the two countries.
However, another set of data is very interesting. In the past two years, our country's exports to Mexico have increased significantly.
Moreover, according to statistics, the goods that Mexico exports to the United States are similar to the goods that Mexico imports from China. This means that after Mexico imports goods from China, it carries out secondary processing or assembly, and then resells them to the United States.
It is worth mentioning that Mexico's operation is similar to the "transshipment" in Southeast Asia, which is also highly dependent on China's exports.
It can be seen that although our exports to the United States have decreased, our overall exports are increasing. Although the United States has reduced its imports from our country, it still has a significant dependence on indirect imports from our country through transit countries.
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