Submitted by Taps Coogan on the 17th of January 2020 to The Sounding Line.
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Bloomberg News recently spoke with Christopher Balding, associate professor at the Fulbright University of Vietnam and long time China expert, about the effect that the US-China trade deal is going to have on China’s trade relationships with the rest of the world. Specifically, he warns that China’s trade surplus with Asia and Europe is rising as it substitutes their exports for American ones and looks for new markets to replace formerly US destined exports.
Some excerpts from Christopher Balding:
“Basically what we’re seeing is that as the US-China trade deficit has narrowed in 2019, and is likely to continue to narrow in 2020, the Chinese trade surplus continues to rise by around $100 billion. What that means is that China is getting a much bigger trade surplus from other countries. Primarily that is coming from other parts of Asia, but we are also seeing that in other parts of Europe. So, it’s a very different scenario when other countries are looking to China to tap that market for investment dollars and now all of a sudden you are becoming a deficit country with China…”
“In 2018, China was basically running a flat trade scenario (balanced trade) with most of Asia. In 2019, that number is likely finishing around $70 billion (surplus for China). For countries like Veitnam, and other parts of emerging Asia, that’s a big shift. China added about $40 billion to its trade surplus with Europe…”
As we noted here, through the first ten months of 2019, the US trade deficit with China shrunk by roughly 15%, with both US imports and exports to China falling.
There is more to the interview, so enjoy it above.
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China is just the largest country determined to diversify from American dependence.The rest of the world has realised that to be beholding to the US is to lose both political and economic freedom.Within 5 years America will be truly on its own and the people will pay the price !
Trading Chinese dependence for American dependence doesn’t feel like much of a win
The problem I see is that Europe is simply uncompetitive and the immigrant crisis has not helped. Europe runs a solid trade deficit with China. In some ways, this is balanced by the EU having a surplus with America. Still, in many ways, a growing trade deficit with China bodes poorly for the EU as they look down the road. This means unless the EU takes strong action to halt the importation of cheap Chinese consumer goods it will be flooded with them in coming years. The article below argues the EU’s trade deficit with China will become a cancer… Read more »