China Close to Ousting the United States as Number One Exporter

China's total exports in July at $80.3 billion exceeded the seasonally unadjusted exports of the United States at $79.2 billion for the first time. US data for August has not yet been published, but Chinese exports in August took another jump to reach $90.7 billion. As the first chart shows, the growth in China's exports suggests that it will not be long before China becomes the world's biggest exporter, ousting the United States from its long standing position.

In all the major geographic areas, Chinese exports are growing faster than those of the US. As an example, the second chart compares China and US exports to Europe. Even in areas where the US is still a dominant supplier, such as Latin America, the year to year growth in China's export to that region has greatly exceeded that of the US, as shown in the third chart.

China's status as the Number One Exporter in the world is not without its problems. As a result of the large current account surplus that has resulted from China's fast growing exports and slow growing imports, China's international reserves are close to $1.0 trillion. The management of the reserves has become increasingly burdensome and risky. And China's reluctance to appreciate its currency is becoming increasingly under attack.