China’s rising economic and military power has caused some concern in the United States and in Europe. Just like China in the 1980s, China’s economic policies–particularly as it relates to the values of its currency and the effect that has had on China’s foreign trade and current accounts–have irked politicians and pundits (hello, Lou Dobbs) here in the US. They will not be heartened by the news that China’s trade surplus has reached a record $262 billion. Interestingly, however, the EU replaced the US as China’s largest export market.
China’s trade surplus rose by nearly 50 per cent to a record $262bn in 2007, but import growth exceeded export growth in each of the final three months of the year, suggesting that the country’s controversial trade imbalance may be peaking.
In another first, the European Union also replaced the US as China’s largest export market. Sales to the expanded EU grew by 29.2 per cent in 2007, compared to just 14 per cent to the US.