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China surpasses Germany as world's top exporter

A worker at the Yangshan deep-water port. China surpassed $1.2 trillion in exports last year.
A worker at the Yangshan deep-water port. China surpassed $1.2 trillion in exports last year. (Eugene Hoshiko/associated Press)

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By Steven Mufson
Monday, January 11, 2010

SHENZHEN, CHINA -- China overtook Germany in 2009 to become the world's top exporting nation, another milestone in China's rapid rise and growing economic influence.

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But in a year of global economic turmoil and weakness, China achieved the top ranking because its exports fell only 16 percent, while Germany's exports fell more steeply.

China's customs agency released figures Sunday showing that total exports last year were more than $1.2 trillion, slightly ahead of the $1.17 trillion forecast for Germany by its foreign trade organization, the Federation of German Wholesale and Foreign Trade.

"This is just one more step by China in attaining economic size commensurate with its population," said Arthur Kroeber, managing director of Dragonomics, an economic research firm in Beijing. Germany has a population of about 80 million, while China's population is about 1.3 billion.

"The next big news will be when China surpasses Japan to become the world's second-biggest economy," Kroeber said. Analysts say that is likely to happen this year.

Already in 2009, China also became the world's biggest automobile market, and it is the world's largest steel producer. Exports continue to fuel migration to coastal cities such as this one.

The country's continued rise as an export powerhouse has strained relations with the United States, where many companies and labor unions have asked the government to impose import duties on tires, steel pipe and other goods from China.

The Obama administration, like George W. Bush's, has urged China to increase the value of its currency, the yuan, which has helped make China's exports cheaper than those from many other nations. But Premier Wen Jiabao said in late December that China would "absolutely not yield" to calls for an exchange-rate adjustment.

Statistics from China's customs agency also showed that China remains a major importer, as well. In December, exports climbed 17.7 percent from a year earlier, the first increase in 14 months, but imports jumped 55.9 percent, to a monthly record of $112.3 billion.

The figures are likely to reinforce the government's concerns about the economy overheating, and earlier this month the central bank slightly nudged up a key interest rate.

For all of 2009, the country's imports came to $1.01 trillion, down 11.2 percent from a year earlier, the customs agency said. China's trade surplus last year fell 34.2 percent, to $196.1 billion.

Those imports were largely commodities and machinery needed for infrastructure projects that have been spurred by the government's huge stimulus spending plans.

"China has been one of the key drivers of the remarkable recovery in commodities markets in 2009," said a recent Barclays Capital report. And while many analysts have said that China was stockpiling commodities, Barclays said that the most recent data, such as rising electricity consumption, suggested that China's economy was strong and that it would continue to import everything from iron ore to oil to corn.

"The underlying drivers of commodity consumption are healthy," Barclays said.

That will bolster countries providing raw materials to China. China's shipments to the United States and the European Union grew 15.9 percent and 10.2 percent, respectively, from a year earlier, the customs data showed. Imports from Australia and Malaysia more than doubled.

"Eventually, though I don't expect this for another 20 years or so, the [Chinese] economy will be bigger than that of the United States," Kroeber said. "People are just going to have to get used to these facts -- and to remember that most of these facts are simply reflections of China's enormous population, and do not in any way indicate leadership in technology, innovation or productivity."


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