Submitted by Taps Coogan on the 9th of October 2019 to The Sounding Line.

Enjoy The Sounding Line? Click here to subscribe.

The United States is not the only country grappling with a massive trade deficit with China. As the following chart from Statista shows, China’s neighbor India is running a startlingly large deficit as well.

Despite having significantly lower labor costs than China, India imports more than four times more from China than than it exports ($68.8 billion of Chinese exports compared to $14.8 billion of Indian exports). Chinese exports to India are primarily manufactured goods while Indian exports to China are primarily raw materials and resources.

While size of the trade between the US and China is an order of magnitude larger than China’s trade with India ($179 billion in US exports and $557 billion in Chinese exports), the US-China trade ratio is actually more narrow (about 3.6 times more Chinese exports than US exports). It’s a reminder that labor costs are only one part of what drives trade imbalances. Equally important are regulatory hurdles, market access, tariff levels, and overall economic competitiveness.

Would you like to be notified when we publish a new article on The Sounding Line? Click here to subscribe for free.