Developments In China

It will be 30 years since the establishment of formal communications between the US and The Peoples Republic of China this year. By all accounts, the relationship has come a long way in 30 years. It is important for businesspeople to know about developments in China, as this nation is swiftly becoming an overwhelming force in the global economy.

Recently, Zhou Wenzhong, The Peoples Republic of China's Ambassador to the US, spoke in Ohio about developments in China. I read his speech in Vital Speeches, and provide a summary here. Zhou spoke of peace and development being the overall themes of our relationship, and that the most prominent trend is globalization driving increasing international trade and transnational direct investment. He remarked that these trends underscore the interdependence now in place between the US and China.

There will be "no glorious isolation" in tomorrow's world, based on this interdependence. There will be continued Chinese economic growth. He said that China will apply a "Scientific outlook on development," aiming to moderate growth to a manageable ongoing level. Further, China aims to continue reform and opening up, enhance social harmony, quadruple per capita GDP by 2020 (from 2000), and build a moderately prosperous society. Zhou then said China, recognizing the imbalance in trade, will try to increase imports from the US.

According to Daniel Workman, "zinc, nickel, lumber, mining & oil equipment lead China's fastest-growing exports to U.S. while tobacco, corn & precious metals are popular American imports in China.…

China Imports from U.S.
Of the $55.2 billion in American exports to China in 2006, the following product categories had the highest values.

1. Semi-conductors … US$5.9 billion (10.6% of China from U.S. imports, up 74.7% from 2005)
2. Civilian aircraft … $5.3 billion (9.6%, up 39.7%)
3. Soybeans … $2.5 billion (4.6%, up 12.5%)
4. Plastics …. $2.2 billion (3.9%, up 18.8%)
5. Raw cotton … $2.1 billion (3.7%, up 47%)
6. Industrial machines … $1.97 billion (3.6%, up 29%)
7. Copper … $1.86 billion (3.4%, up 99.7%)
8. Computer accessories … $1.82 billion (3.3%, up 27.5%)
9. Aluminum … $1.7 billion (3.1%, up 90.3%)
10. Steelmaking material … $1.69 billion (3.1%, up 11.9%)

Fastest-Growing Chinese Imports from U.S.
Below are American exports to China in 2006 with the highest percentage sales increases from 2005.

1. Unmanufactured tobacco … US$61.4 million (up 3127% from 2005)
2. Corn … $22.6 million (up 2963%)
3. Oilseeds & food oils … $60.7 million (up 970%)
4. Precious metals … $305 million (up 205.2%)
5. Railway transportation equipment … $220 million (up 146%)"

With today's falling dollar, astute managers look to China and other nations as potential markets. Some ideas of "how" in my next blog entry...