China 2015 Trade Surplus Reaches $594.5 Billions

[TaiShang]

For 2015, Exports was $2.284 trillion, Imports was $1.689 trillion, Total trade was $3.973 trillion, Balance +$0.5945 trillion (surplus).

Yes, exports is important:

• Major item is Electro-Mechanical products constituting 57% of total exports. Labour-intensive products (e.g. clothing, textiles, footwear, furniture, plastic products, bags, toys, ...) has dropped to 20%.

• With massive R&D investment (check WIPO reports), High-tech exports has become important drivers in recent years, already reached 29% of total back in 2012. I believe it will go above 30% for 2015, will update you when UN-Comtrade data on high-technology trade is available.

China Exports | 1983-2016 | Data | Chart | Calendar | Forecast | News

I guess, by the end the 13th 5-year plan, the share of labor intensive industry will fall to around 10% of total exports. Then China will be importing lots of these goods from near peripherial countries.

 

[Daniel808]

Thanks bro!

China itself is the world's largest producer of gold, so supply to central bank (PBoC), domestic market (SGX) isn't a problem.

Chinese Central Bank Buys Another 19 Tonnes Of Gold In December | Seeking Alpha
China Establishes World’s Largest Physical Gold Fund | Global Research - Centre for Research on Globalization​

Comparing to gold, another commodity worth mentioning is crude oil.

• In 2015, the huge trade surplus (~$600 billion) happened when China imported a record-breaking 334 million tonnes (6.68 million barrels per day) of crude oil. Just December 2015, the import was 7.82 million barrels per day i.e. further increase.

• China seized the chance to add up to 147 million barrels to its oil reserves (SPR - Strategic Petroleum Reserves; and MCR - Mandated Commercial Reserves) in the first eleven months of 2015, according to Reuters calculations.

• Financially China can easily maintain reserves (SPR plus MCR) at billions of barrels, well above 180 days of peace-time consumption rate or even more (say war-time). However, building physical storage spaces should be priority action plan.

China 2015 crude oil imports up 8.8 pct y/y -customs| Reuters
China Crude Oil Imports Hit Record Amid Global Price Rout - NDTVProfit.com​

Your welcome, brother .
Glad to see that, maybe in the near future. We would see China "Fort Knox"

Yes, China is also expanding Strategic Petroleum Reserves. That's really useful in Peace time and Warfare time.
China goes underground to expand its strategic oil reserves| Reuters

Please try to understand what I've said. Foxconn sells everything what it produces to Apple. Takes it money. And that money stays in China. Afterwards Apple sells that product and makes money with it. The money that Apple makes isn't written in China's trade surplus. The money that Foxconn makes is written in China's trade surplus. And since that money stays in China, there is nothing wrong about it.

Let me repeat this simple fact again. 100% of the money from the production of Apple products stays in China. Apple pays for what Foxconn produces. Buys the product. And sells it. What Apple sells is not written as China's trade surplus. What Foxconn sells is written as a trade surplus.



Don't suppose it. Because it's not.

How & Where iPhone Is Made: Comparison Of Apple’s Manufacturing Process | CompareCamp.com

In iPhone 6, there was 349 companies from China providing parts for Apple, compared to 139 companies from Japan and 60 companies from US. Now of course not all those companies are owned by Chinese citizens. However the trend of Chinese companies owned by Chinese entrepreneurs providing parts for Apple is also emerging.

http://www.ft.com/intl/cms/s/0/d70fca52-2691-11e3-9dc0-00144feab7de.html#axzz3x91jO26S

The number of Chinese companies supplying Apple with components such as batteries has more than doubled from eight in 2011 to 16 this year, according to Apple’s published lists of suppliers and research from the brokerage CLSA.



The phone you've bought is not sold to you by a subsidary in China. It's sold by Apple. Apple sells the phone. No Apple China. This is the point you can't understand. Foxconn produces the product, sells it to Apple. And Apple sells it to you. This is how outsourced manufacturing business works.

Think of it like this. You design an electronic product. A camera for example. You give the design to a Chinese company and say you need a 1000 units. Chinese company produces that camera with the design and specs you've provided and they say you owe them 100$ per unit. You buy the cameras from the Chinese company. That part is written to Chinese trade surplus.

You get the cameras. You sell them 200$ per units. That 200$ has nothing to do with China or Chinese company.




Profit at iPhone Assembler Foxconn Rose 22% Last Year - WSJ

Foxconn's revenues 130 billion dollars. They've made 4 billion dollar profit.

Apple revenues 233.7 billion dollars. They've made 50 billion dollar profit.

Now you say, like a broken record, that 130 billion dollars that Foxconn makes is something that should be undermined. I don't see a single reason to undermine this 130 billion dollars. This is an economic activity. You don't adjust your trade figures based on profitability. Everyone knows that profitability is relatively low in Chinese companies because of low value addition. That still doesn't hide the fact that those guys are making a lot business activities.



As I've said before, profitability is something completely different from the revenues.

On another note, China is one of the main consumers of the Apple products. Do you know that each Apple product that a Chinese national buys is regarded as an import? Because technically that product is sold to that individual by Apple Inc. That's why this is extremely hard to determine if there is an actual effect of Apple Inc. or another foreign company that has the ability to actually to contribute meaningful amounts of money to 500 billion dollars trade surplus.

Plus as I've told you before, you take a look at current account surplus to alleviate the effect of foreign company's activity in a country.

The World Factbook

China is No. 2 behind of Germany with 219 billion dollars of account surplus. That money, is stayed in China to it's last penny.

China has 3.3 trillion dollars of foreign reserves, and it peaked around 4 trillion dollars. Where did this money come from then, if Chinese businesses weren't profitable enough and all the trade surplus were actually "taken by" foreign companies?

You know what, it's really exhausting to debunk all those Western media non-sense. I'm a single human being and they have a lot of pen for hire. Go on and believe what you wanna believe. Your belief wouldn't change anything about the world and how things work. You might one day face the truth when China buys half of your countries' exports and pays it in RMB. Because trust me, that will happen.

Really great Post !
Thanks so much for your explanation about outsourced in Manufacturing Bussiness

 

[Martian2]

how as exports are falling like anything !


let him justify himself by his imaginative theories jotted down from googling the internet ( or for matter baidu-ing reading too much xinhua news articles ) . just one more big devaluation of yuan is coming and that will tell the rest of the story . just need to wait few more days .

Stop claiming that Chinese "exports are falling."

You can only claim that the dollar-value of Chinese exports is falling. However, this is offset by the greater drop in the price of imports (e.g. commodities). Who cares if the dollar-value of exports is falling? The dollar-value of imported commodities is falling faster. The important figure is the merchandise trade surplus. The Chinese trade surplus has ballooned from $200 billion to $600 billion.

Regarding exports, China's export VOLUME (which is not susceptible to currency fluctuations) is up 4% for the year.
A 4% growth in the volume of exports means that Chinese exports are rising (see IHS citation below).
----------

Volume still rising at China’s top ports | IHS

With the sharp drop in commodity prices, we cannot use the dollar value as a measure of trade volume. Instead, we have to resort to a direct count of shipping containers.

IHS reports that China's trade volume has increased by 4% from Jan-Nov 2015.

We know that China's aggregate technology improves every year (such as using more industrial robots and CNC machine tools). Let's throw in another 2% in economic growth for improved technology.

We also know China improves its energy efficiency every year (such as building more ultra-supercritical coal-fired power plants). Let's say improved energy efficiency leads to a 1% growth in the Chinese economy.

Altogether, it is entirely reasonable to believe China's claim of 7% economic growth (e.g. 4% increased trade [or economic activity] + 2% improved technology + 1% economic efficiency).
----------

Volume still rising at China’s top ports | JOC.com

 

[Tiqiu]

Behind yearly GDP and Trade Surplus lies the backbone of China's economy, the sheer scale of her manufacturing capacity and capability, and increasing.

The U.S. has a similar trajectory, but in total debts.

 

[TaiShang]

Regarding exports, China's export VOLUME (which is not susceptible to currency fluctuations) is up 4% for the year.

That's something the Indian would not like anybody to know.

Who cares if the dollar-value of exports is falling? The dollar-value of imported commodities is falling faster. The important figure is the merchandise trade surplus. The Chinese trade surplus has ballooned from $200 billion to $600 billion.

Indeed, if that was not the case, how would the trade surplus be ever expanding?

 

[Shotgunner51]

I guess, by the end the 13th 5-year plan, the share of labor intensive industry will fall to around 10% of total exports. Then China will be importing lots of these goods from near peripherial countries.

Yes bro. Though now electro-mechanical is already the dominant (57%) category, I look forward to further optimization of export structure in which it goes upto 70%, the rest being electronics upto 20%, advanced materials upto 10% (e.g. steel, composite materials). Labour-intensive consumer product should be imported instead.

Your welcome, brother .
Glad to see that, maybe in the near future. We would see China "Fort Knox"

Yes, China is also expanding Strategic Petroleum Reserves. That's really useful in Peace time and Warfare time.

You are welcome bro!

• Being the largest producer of gold, China's gold reserves outside the book of central bank (PBoC) is still a mystery since the numbers simply don't add up. Where are they? I have no idea bro! China's Secret Vaults: Where Is All The Missing Gold?

• Anyway there should be no shortage of supply to PBoC. The Ministry of Land & Resources (国土资源部) is managing this sector, and PAP has dedicated paramilitary forces (People's Armed Police Gold Unit; 武警黄金部队) for it, the golds are in good hands.

Yes oil reserves (SPR and MDR) are expanding.

• Let's do quick maths, 90 days peace-time reserves is very small, even on the high side say 1 year of war-time rate (7 million barrel/day) is 2.5 billion barrels, financially speaking it's just a tiny amount. Let's continue to cut excessive Forex Reserves of PBoC, imports crude oil and boost SPR of National Energy Administration (国家能源局) and MDR of private sector. It's a good time to fill up the war chest.

• China has world's largest shale gas reserves, 1.115 quadrillion cu.ft as per U.S. Energy Information Administration (EIA). We should continue geological survey and technological preparation for shale energy, but hold up commercial exploitation, keep this as strategic natural reserves.

• And of course, always prepare for new tech, non-fossil energy.

 

[Lure]

Hey Lure , why do you so presstimistic saying last paragraph. Thank you for your kind explanation. I will read them carefully. well that takes time. My intension is not to show a weak China on the web. My intension is to understand the trade surplus.

I didn't wanna be rude. It's just the concepts are not that straightforward to cover. The post length increases exponentially if you wanna cover a sizeable ground and it becomes less and less easy to grasp.

However lying is easy. You just make up facts like China has 30 trillion dollars debt, China's GDP is fake, China is a 10 trillion dollar economy based on imitation, undermining every scientific development in China by saying it's stolen from the west. Heck, I sometimes wonder those idiot westerner newspapers will claim gunpowder and printing machine is also stolen by China from ailens or something.

Lies are clearly dominating the truth and you put 10 times the effort to find the truth behind that lie and disprove it. Let's see this as a simple fact, it's not about Turkey, Thailand, China etc. The west will never see Asia as one of them or as equals. They will always try to uphold their superiority starting from the Colonial era. We think we have our sovereignty. Hell no we don't. We are always looking for approval, we are seeing ourselves the way west see us. Backward, unsuccesful, uncivilized.

Anything good about us is something that should be approached extremely sceptical. Like ongoing development of China. There must be something "fishy" about it, otherwise how Can they develop on their own? On the other hand Anything Bad about us is something existential about us, like lack of democracy. And those great political philosophers of the west ends up saying "they are not developed because they are not like us". It's like There is a single way of development and that way is stemming from western civilization.

This type of mentality, like Being extremely sceptical about everything about China, is Coming from an extremely racist subconscious mind. Some say they can't be developed because There is something fundamentaly wrong with them and some say they can't be developed because they aren't like the west.

 

[TaiShang]

Let's do quick maths, 90 days peace-time reserves is very small, even on the high side say 1 year of war-time rate (7 million barrel/day) is 2.5 billion barrels, financially speaking it's just a tiny amount. Let's continue to cut excessive Forex Reserves of PBoC, imports crude oil and boost SPR of National Energy Administration (国家能源局) and MDR of private sector. It's a good time to fill up the war chest.

I think the initial objective is to reach 90-day supply. The second step is to achieve 120 SPR. But I agree, when the commodity is so cheap, China should warp up its SPR building efforts and stockpile as much as it physically can.

Lies are clearly dominating the truth and you put 10 times the effort to find the truth behind that lie and disprove it. Let's see this as a simple fact, it's not about Turkey, Thailand, China etc. The west will never see Asia as one of them or as equals. They will always try to uphold their superiority starting from the Colonial era. We think we have our sovereignty. Hell no we don't. We are always looking for approval, we are seeing ourselves the way west see us. Backward, unsuccesful, uncivilized.

Very powerfully put, indeed. A real pan-Asianist spirit @Nihonjin1051 .

If the West is never able to see Russia one of their own, how could they do with others across the great Asian landmass?

This type of mentality, like Being extremely sceptical about everything about China, is Coming from an extremely racist subconscious mind. Some say they can't be developed because There is something fundamentaly wrong with them and some say they can't be developed because they aren't like the west.

This indeed sums up the Washington Consensus.

 

[xunzi]

 

[dadeechi]

13th January 2015

View attachment 286725

For full year of of 2015, the country registered a USD 594.5 billion trade surplus, further expanded from a USD 382.5 billion surplus for 2014.

China Balance of Trade | 1983-2016 | Data | Chart | Calendar | Forecast

So there is high possibility that China's GDP would shrink by at least $ 600 billion in the next few years.

 

[S10]

There is no Ka-Ching. The stock market has lost much of its value, manufacturing sector is currently shrinking and capital flight remains a serious issue. Last year was not a year to celebrate, but rather to take lessons from.

So there is high possibility that China's GDP would shrink by at least $ 600 billion in the next few years.

GDP will continue to grow, but only at about 4% to 5% realistically as opposed to the 6.9% official figure. China's export and service sector is still steadily growing despite a down turn in manufacturing activity. China "shrinking" is simply a pipe-dream.

 

[CAPRICORN-88]

So there is high possibility that China's GDP would shrink by at least $ 600 billion in the next few years.

There is a saying: -

"When China sneeze, the rest of the world catches a cold".

Better pray that it is not happening and hope for a prosperous ASIA instead.

 

[xunzi]

There is no Ka-Ching. The stock market has lost much of its value, manufacturing sector is currently shrinking and capital flight remains a serious issue. Last year was not a year to celebrate, but rather to take lessons from.

With a more intertwining world of trade, having a large surplus meant despite domestic slowdown, the world still need us. For this reason, it is to be celebrated. And remember, we want "sustainable growth" over high-speed growth rate.

 

[dadeechi]

GDP will continue to grow, but only at about 4% to 5% realistically as opposed to the 6.9% official figure. China's export and service sector is still steadily growing despite a down turn in manufacturing activity. China "shrinking" is simply a pipe-dream.

You are assuming that Countries would just entertain this behavior? If yes, why? Does China has a monopoly?

 

[S10]

You are assuming that Countries would just entertain this behavior? If yes, why? Does China has a monopoly?

Entertain this behaviour? Is this some kind of joke?

China is currently the largest manufacturing base in the world, without equal. Its economic activities are determined by both foreign and domestic demands. Even if it's only growing at 4%, it would still be a more substantial real growth than India growing at 10% due to its sheer size. Money talks.