US surpasses EU as biggest buyer of Chinese exports

THE UNITED STATES surpassed the European Union in the first 11 months of 2012 to become the largest buyer of Chinese exports, according to data released by the Commerce Ministry on Tuesday.

The value of US trade with China increased by 8.2 per cent year-on-year to reach $438.62 billion (S$536.65 billion), according to the ministry.

At the same time, China's exports to the US increased by 8.2 per cent to $319.4 billion, and its imports from the US went up by 8.1 per cent to $119.2 billion.

China's trade surplus with the US has also increased in the year, going from $148.3 billion in the first nine months to $200.3 billion in the first 11 months.

The EU, for its part, saw its trade with China decline.

In the first 11 months of the year, its trade with China decreased by 4.1 per cent year-on-year, and its imports from China dropped to $302.3 billion.

Japan's trade with China also dropped by 2.9 per cent year-on-year during the period.

Even so, China's total foreign trade was up in the first 11 months of the year, increasing by 5.8 per cent to $3.5 trillion, although that rate of increase was far below the goal of 10 per cent set at the beginning of the year.

And trade with the US has not been as vigourous in recent months as it was earlier in the year. The past two months have seen it slow below the 9.1 per cent year-on-year rate of increase it showed in the first nine months.

Zhou Shijian, a senior trade expert at Tsinghua University, blamed the slower trade on the US' sluggish economic recovery.

The US economy grew by 2.7 per cent in the third quarter of the year. Yet many expect the rate to be slower in the fourth quarter, as the country braces itself for going over the "fiscal cliff", a combination of deep cuts in government spending and tax increases that are scheduled go into effect early next year.

"US consumers see an uncertain economic future and are tightening their purse strings," Zhou said.

Even so, he said, the US is doing much better than the EU or Japan.

Zhou forecast that trade between China and the US will continue to increase next year, saying the US economy is recovering, though at a slow rate.

Wang Li, a researcher with the Ministry of Commerce's International Trade and Economic Cooperation Institute, said US controls on technology exports remain an obstacle to trade with China.

During a meeting last week of the China-US Joint Commission on Commerce and Trade, the US pledged to respond to China's concerns about fair treatment for direct investments in the US, controls on technology exports and various visa matters.

In the first 11 months of 2012, US' actual investment in China increased by 11.6 per cent from a year earlier to hit $2.4 billion.

During the same period, China approved the establishment of 1,180 US-funded companies, down 8.9 per cent year-on-year.

By the end of November, the cumulative direct investment from the US had reached $70 billion.

China remains a small investor in the US, having put $8.6 billion worth of investment into the country by November.