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 will increase by 5.2% year on year, reaching 690.59 billion US dollars, an increase of 4.8% over 2018. Some commodity trade has even recovered to the level before economic and trade frictions. Among them, the US import of goods from China increased by 6.3% to US $536.75 billion, approaching 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 the level in 2018, and electrical equipment and parts, nuclear reactors and other products are basically close to the level in 2018.

Wang Ningyuan, a researcher at the Bank of China Research Institute, believes that the above are all the categories of goods that have been most severely affected by the US tariffs since the Sino US trade friction. The US has resumed and expanded imports of these goods from China, demonstrating the irreplaceable nature of China's supply chain in the US. US enterprises and consumers have continued to expand their imports from China based on their own cost-effectiveness maximization.

There are also hidden concerns under the growth of Sino US trade. According to the United States Department of Commerce, China is no longer the largest trading partner of the US. The United States imported $536.75 billion of products from China in 2022, lower than the $553 billion it imported from the European Union. The European Union replaced China as the largest source of imports for the United States. The trade data between the UK and the US, which have withdrawn from the EU, has not been added here. If the UK is also included, the gap will be even greater.

Meanwhile, the export of high-tech products from the United States to China continues to decline. According to the data of the United States Department of Commerce, in 2022, the total export volume of US goods to China will increase by 1.6% year on year, reaching US $153.84 billion. Affected by the export controls imposed by the United States on China's high-tech sector, the export of high-tech products to China has shifted from a positive growth rate of 22.6% in 2021 to a negative growth rate of 2.2% in 2022, a decrease of 24.8 percentage points, and the scale has decreased to $36.90 billion. Among them, exports to China, including electronics, life sciences, advanced materials, information and communication, decreased by 17.1%, 4.3%, 2.6%, and 1.8%, respectively. The decline in semiconductors and other electronic components was as high as 20.8%.

Since the launch of the National Security Strategy at the end of 2017, which saw China as a strategic opponent, the United States has continued to suppress China in the economic field. Since the trade war initiated by the previous President Trump, the current President Biden has been containment and suppression of the Chinese economy in areas such as trade, technology, and industrial chain reconstruction. The White House has continuously implemented a series of measures targeting China, such as the Chip and Science Act and the Inflation Reduction Act, as well as various practices of nearshore and friend shore outsourcing. The United States is vigorously reshaping its global industrial chain to gradually weaken the proportion of the Chinese economy in the world.

As is well known, 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 consecutive years. However, according to foreign media confirmation, Singapore Maritime Shipping has recently suspended its Far East to West US route services. The reason is that the freight index of the US West route has continued to decline recently, while the volume of goods exported from Europe to the United States has remained relatively stable. The freight rates of the European East route are still close to historical highs. With the weak demand in the Pacific container shipping market, many shipping companies have chosen to reduce their operations on the Far East West related routes.

The volume of goods exported from East Asia to the United States through the US West route has continued to decline, although there are factors such as traditional Chinese Spring Festival holidays and the rapid slowdown in US import demand. However, by mid February, the return of empty containers from China has intensified, and the trend towards exports may continue to be sluggish. In January of this year, China's PMI new export order index was 46.1%, still below 50%. According to the relationship between the PMI export order index leading the export growth rate, this data indicates the risk of continued decline in China's export growth rate. By comparing the overall import growth rate of the United States with that of imports from China, the growth rate of US imports from China has decreased earlier and faster.

At present, the United States is frequently using various trade and technological warfare methods against China to suppress its development. Recently, the United States has added six Chinese entities to its export control "entity list". On February 14th, a spokesperson for the Chinese Ministry of Commerce responded that the US has included six Chinese entities in the export control "entity list" on the grounds of "supporting Chinese military airships and other aerospace projects", which China firmly opposes. China hopes that the US will stop its unreasonable suppression of Chinese enterprises and 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 accelerate subsidies to domestic industries and impose stricter export controls and trade barriers on China in its policies of manufacturing backflow and strengthening economic cooperation with its allies. The year 2023 of Sino US trade is destined to be a tortuous journey.