China and Singapore ---The Big and The Small---Show Increased Trade Surpluses

China and Singapore reported foreign trade figures for January, today. The largest country in Asia and one of the smallest both reported increases in their trade balances for the month. In the year over year comparison, however, China showed an increase of $4115 million and Singapore a decrease of $1,722 million.

The moderation in China's trade surplus that took place at the end of last year was reversed in January. As a result of an $8,415 million increase in exports and a $4,642 million increase in imports, the balance on trade rose $3,777 million, to $24,750 million in January, the second highest on record. Singapore's trade surplus rose $844 million from December as a result of a $5,227 million increase in exports and a $4,383 million increase in imports. China's and Singapore's trade balances are shown in the first chart.

Although Singapore is a tiny city state with a population of 4.4 million compared with China's 1.3 billion, its exports in 2007 were equal to 25% of China's. (In the mid nineties, Singapore's exports were equal to 80% of China's, but with the more rapid rise of China's exports than those of Singapore, that percentage has declined over the years, as shown in the second chart.) However, foreign trade still plays a greater role in its economy than it does in China. Its net exports accounted for 30% of nominal GDP in 2006, compared with 7.5% for China as can be seen in the third chart.