General

There are hidden worries under the growth of Sino-US trade! According to the data of the United States Department of Commerce, the total trade volume between China and the United States in 2022 increased by 5.2% year-on-year to US $690.59 billion, an increase of 4.8% over 2018, and some commodity trade has even returned to the level before economic and trade frictions. Among them, the import of goods from China increased by 6.3% to US $536.75 billion, close to the level of US $538.51 billion in 2018. From the perspective of commodity structure, the import volume of plastics and products, vehicles and parts, organic chemicals, optical and medical instruments, pharmaceutical products, steel and its products, aluminum and other products from China has exceeded 2018, while the import volume of electrical equipment and parts, nuclear reactors and other products is basically close to 2018 level.

Wang Ningyuan, a researcher at the Research Institute of the Bank of China, believes that the above are the categories of goods most seriously affected by the United States tariff increase since the Sino-US trade friction. The United States has restored and expanded its import of these goods from China, which shows the irreplaceable nature of China's supply chain in the United States. American enterprises and consumers have still expanded the import scale from China based on their own cost-benefit maximization.

There are also hidden worries under the growth of Sino-US trade. According to the data of the United States Department of Commerce, China is no longer the largest trading partner of the United States. The United States imported US $536.75 billion of products from China in 2022, lower than US $553 billion from the EU. The EU replaced China as the largest source of imports from the United States. There is no trade data between the United Kingdom and the United States that have withdrawn from the EU. If the United Kingdom is also added, the gap will be greater.

At the same time, the export of high-tech products from the United States to China continued to decline. According to the data of the United States Department of Commerce, in 2022, the total export of goods from the United States to China increased by 1.6% year-on-year to US $153.84 billion. Affected by the export control of the United States on China's high-tech sector, the export of high-tech products to China has changed from a positive growth of 22.6% in 2021 to a negative growth of 2.2% in 2022, a decrease of 24.8 percentage points, and the scale has dropped to US $36.90 billion. Among them, the exports of electronics, life sciences, advanced materials, information and communications to China fell by 17.1%, 4.3%, 2.6% and 1.8% respectively, and the decline of semiconductors and other electronic components was as high as 20.8%.

Since the launch of the National Security Strategy at the end of 2017, when China was regarded as a strategic rival, the United States has continued to suppress China in the economic field. Since the trade war launched by the previous President Trump has continued, the current President Biden has also blocked and suppressed the Chinese economy in trade, science and technology, industrial chain restructuring and other aspects. The White House has continuously implemented a series of measures aimed at China, such as the Chip and Science Act, the Inflation Reduction Act, and various practices of offshore outsourcing and offshore outsourcing. The United States has strived to reshape its global industrial chain in order to gradually reduce the share of China's economy in the world.

As we all know, thanks to China's huge export volume, the Port of Los Angeles on the west coast of the Pacific has become the busiest port in the United States for 21 years in a row. However, according to foreign media, Singapore Hailing Shipping has suspended its service from the Far East to the West. The reason is that the freight index of the U.S. - West route has continued to decline recently, while the volume of goods exported from Europe to the United States has remained relatively stable, and the freight rate of the Europe-East route is still close to the historical high. With the weak demand in the Pacific shipping market, many shipping companies choose to reduce the operation of the Far East-American West related routes.

The volume of goods exported from East Asia to the United States via the US-West route has continued to decline. Of course, China's traditional Spring Festival holiday and the U.S. import demand are slowing down rapidly, but by the middle of February, the return of China's empty containers has intensified, and its export orientation may continue to decline. In January this year, China's PMI new export order index was 46.1%, still below 50%. According to the relationship between PMI export order index and export growth rate, this data indicates that China's export growth rate has the risk of continuing to decline. By comparing the data of the overall import growth rate of the United States and the growth rate of imports from China, the growth rate of imports from the United States fell earlier and faster.

At present, the United States frequently uses various trade wars and technological warfare against China to suppress China's development. Recently, the United States added six Chinese entities to the United States export control "entity list". In response, the spokesman of the Ministry of Commerce of the People's Republic of China responded on February 14 that the United States included six Chinese entities in the "entity list" of export control on the grounds of "supporting Chinese military airships and other aerospace projects", which China firmly opposed. China hopes that the United States will stop its unreasonable suppression of Chinese enterprises and will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises. It can be seen that the United States will continue to subsidize domestic industries and impose stricter export controls and trade barriers on China while continuing to implement the policy of manufacturing industry backflow and strengthening economic cooperation with its allies. The year 2023 of Sino-US trade is bound to be a tortuous journey.