Home Info-Graphs China Trade: This GIF Shows How China Trumps the U.S. on Trade

China Trade: This GIF Shows How China Trumps the U.S. on Trade

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China Trade

Perhaps this time next year it will be illegal to disagree with Donald J. Trump. But that doesn’t mean everything he says now is wrong. This GIF seems to illustrate his point about U.S. – China trade: “They’re killing us”.

The GIF below shows 30 years’ worth of trade between both countries. Each square represents one billion dollars. The green ones are U.S. exports to China. The red ones, U.S. imports from China.

China Trade
China Trade

The start couldn’t be more balanced: in 1985, the U.S. exported $3.9 billion to China, and imported goods and services for the exact same amount. But by 2015, there was a staggering imbalance, to China’s advantage, of $365.7 billion – an all-time record, not just for U.S.-China trade, but for any bilateral trade, ever.

It’s not that U.S. exports to China haven’t increased. They have, and by a lot. America exported an impressive $116.2 billion into China last year, 30 times more than in 1985. That makes China the U.S.’s third-biggest export market, nearly twice as important as Japan ($62.5 billion), in fourth place. But that’s still a lot less than U.S. exports to Canada ($280.3 billion) or Mexico ($236.4 billion). Meanwhile, Chinese exports to the U.S. have exploded. In 2015, China exported $481.9 billion to the U.S. – an amazing 123 times more than in 1985.

But it’s transforming these raw data into moving images that really brings home the runaway nature of America’s trade deficit with China.

Watch America’s exports to China progress in fits and starts – even reverting to ‘negative growth’ on five occasions: in 1986, 1990, 1999, 2009 and 2015. Last year was the most serious drop, by $7.5 billion from the previous year.

In contrast, see how China’s exports to the U.S. show a strong, consistent rise. With just one exception: in 2009, at the height of the financial crisis, Chinese exports to the U.S. dropped by a whopping $41.4 billion. But the general upward thrust is so strong that they increased by $68.3 billion the next year, not only compensating previous year’s losses, but also bettering the 2008 result by almost $30 billion.

And, as the GIF clearly demonstrates, China’s exports increase almost exponentially. It took China six years to add the first extra $15 billion to its exports to the U.S. By 2000, after the first 15 years shown here, the total had increased to exactly $100 million. Over the next 15 years, to 2015, that figure would almost quintuple. The last $15 billion was added just in the last year shown here, adding up to the record total of $481.9 billion.

Thirty years after perfect equilibrium, China exports almost four times as much to the U.S. as the other way around. Are there any glimmers of hope for the American side? Well, yes: at least China’s exports aren’t increasing as fast as they were a few years back.

Chinese exports grew by double digits in only three of the first 15 years. They grew by double digits in all but one of the next 15 years. But the peak does seem to have passed: after three years of plus-40% growth (2004-’06) and one year of plus-50% growth (2009), the increase hit its high water mark in 2010, with +68.6%.

But the year after, the increase virtually halved, and kept falling for every year since, except 2014. And there are other reasons to presume Mr. Trump’s simple truth might not be the whole one. For one thing, a lot of those Chinese exports to the U.S. are products assembled in China for American companies, so while they count as Chinese products, they benefit those American companies. And the fact that China is able to produce stuff so cheaply may have cost a lot of American jobs, it has also benefited American consumers, who get to buy stuff cheaper than if they made it themselves.

Even the outsourcing of American manufacturing to China is a bit more complex than the likes of Trump seem to think. Fact is, U.S. industrial output now is higher than it was during the post-war boom years – it’s just that manufacturing is more efficient, requiring a smaller workforce than before. The same has happened in agriculture, and those jobs haven’t gone to China.

The reason why U.S. exports to China haven’t kept pace with the flow of goods in the other direction is simple: China’s economy may be huge, but on a per-capita basis, the Chinese themselves are still relatively poor. Consequently, few are yet able to afford all those nice expensive things made in America, by workers who make a lot more than they do.

Trump proposes punitive tariffs to protect American jobs, but they would lead to trade wars that would ultimately end up hurting U.S. workers and consumers.

Paradoxically, it’s China’s manufacturing advantage over the U.S. itself that will lead to a rebalancing of bilateral trade. For if they keep beating the U.S. in the trade game, the Chinese eventually will get rich enough to afford more stuff. And then the trade gap will start to close – but only if America makes the things China wants.

China Trade

This GIF Shows How China Trumps the U.S. on Trade via Howmuch.net

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