Government officials and companies across China have come to realize the danger of overdependence on the U.S. market. Although overall exports to the United States continue to grow, Chinese sales to other nations are growing much quicker, reducing America’s importance as a trade partner.
Chinese business representatives present at China’s main trade fair held mid-April gave several reasons for the move to other markets, such as weaker growth in the American economy, trade barriers Washington imposes to protect its market and, most significantly, the decline of the dollar against China’s currency, making it more expensive for Americans to buy Chinese products (New York Times, April 16). Officials in Beijing raised their currency by 2.1 percent against the dollar in July 2005, and since then it has drifted up 5 percent more.
Meanwhile, the euro’s rising value is making the European Union attractive for Chinese exporters. China’s exports to the EU exceeded its exports to the U.S. for the first time in February.
According to a Goldman Sachs tabulation, China sent more than 31 percent of its exports to the U.S. in 2000, but by February of this year, that figure had dropped to 22.7 percent. The percentage of Chinese exports going to the EU rose slightly, while exports to India, Brazil and Russia have doubled over the last seven years to 32 percent this past winter.
China is working hard to wean itself off its dependency on the American market.