Which country gets the most out of international commerce?
-Unnamed, The Economist Print EditionSummary:
News reports from places like Beijing and Shanghai are now saying that “China is now No 1 in trade.” Supposedly, this is only mostly true. Chinas international trade in goods did indeed lead the world in 2013, and its combined exports netted a hefty 4.2 trillion dollars (exceeding America’s for the first time). However, goods are not the only things that countries trade, we have to remember. Alongside this triumphant front-page story is an article about “PANDA!” a Las Vegas show performed by the CNAT. These cultural exports are part of the international trade in services, which is of growing significance to global commerce. If this is added in to physical goods amounts, China is still number two in trade.
This issue is currently in place simply because their economy has scaled too large in the past several decades. Relative to the size of its GDP, China’s trade is below the world average. Its exports and imports were as low as 53% in 2012, but the ration of global trade to world GDP should be over 63%. This mismanagement is what makes China’s trade a fairly modest amount in comparison to other countries. Despite this being a somewhat dated article, through further research one can tell that China shows no signs of slowing down in terms of economic growth and overpopulation, and they are having a hard time maintaining a successful economy without collapsing due to how many people there are to “take care of,” so to speak. So if China isn’t the top trader, then who is? According to many inputs of statistical data and analysis, America is the biggest importer, but the biggest per person is Hong Kong (likely due to their large population and good relations with companies like Japan and the United States that import many of their products from Hong Kong).
Economic Well-Being: Created in the process of production, including all economic activities that aim directly or indirectly to satisfy human needs. China lacks as much of this as countries like Hong Kong because not only are their activities not always aimed to satisfy human needs, they lack the relations of Hong Kong and the services to support and export that many raw items.
Absolute Advantage: Hong Kong has the absolute advantage in being able to produce something more efficiently, due to their better waste management and relations with United States and European importers. Their relations with workers and manufacturers in their own country also helps them gain this advantage.
3.) Economic Efficiency: Even though China claims to have the number one trade statistics in the world, other countries have a higher level of economic efficiency in this field. Hong Kong is just one of these examples.
Economic Benefits of International Trade
This misrepresentation of statistics seems like a deceptive way to improve morale of the population. Some sceptics of this trade deception point out that many of China’s seemingly sophisticated and exlusive exports include many valuable imported components, which would make them not add completely to their creation of goods and services. According to the World Trade Organization, China only adds 67% of the value to its exports, and America adds up to 89%. If you count only the value that the country adds to its exports, then we stack up right next to China.
This misuse of statistics shows how desperate the country truly is. At this point in their economy, they will do anything to show the world that they should remain relevant as a world power. According to the IMF (International Monetary Fund), Norway actually has the most valuable currency, as the krone is not 83% overvalued—which is more than any other currency. Nowadays, Norwegians have far more purchasing power when spent on internationally traded goods than it does buying its own goods. Contrary to “China Daily”, Norway may now be “No 1 in trade.”