U.S.-China trade hit record in 2022 despite tensions, Nikkei Asia, Feb. 7, 2023.
MARRIAN ZHOU and RINTARO TOBITA
Robust cross-border flows run counter to talk of 'decoupling'
Trade between the U.S. and China set a record last year, official figures released Tuesday show, despite bilateral tensions running high.
Imports and exports of goods between the countries hit $690.6 billion, a U.S. Bureau of Economic Analysis report shows. The U.S. imported more toys and other consumer products, with China increasing imports of soybeans and other foods. The robust figures run counter to talk that the world's two largest economies are on track to decouple.
Exports to China increased by $2.4 billion, to $153.8 billion, while imports from China rose $31.8 billion to reach $536.8 billion, underpinned by strong U.S. consumer spending in the first half. The previous high for imports and exports between the two countries was $659 billion in 2018.
"For U.S. importers, the benefit of buying cheap Chinese products was compelling, even with the sanction tariffs," said Kensuke Abe of trading company Marubeni's Washington office.
Tariffs imposed on Chinese goods such as toys and plastic products -- worth $370 billion -- during the Trump administration mostly remain. The Biden administration weighed cutting them as part of dealing with the acute inflation, but the momentum for the move faded after Sino-American tensions rose, partly due to then-House Speaker Nancy Pelosi's visit to Taiwan last summer.
"The record-high bilateral trade flows for 2022 underscore that despite the steady imposition of export controls and the continuation of the Trump tariffs, commercial ties between the United States and China remain strong," said Wendy Cutler, vice president at the Asia Society Policy Institute and a former acting deputy U.S. trade representative.
"While there may be decoupling in certain strategic product areas, other sectors remain untouched, including a wide variety of manufactured and agricultural products," she said.
David Dollar, a senior fellow at the Brookings Institution and former Treasury official, said that U.S. imports of "a few high-tech products such as semiconductors were down, but this was dwarfed by increases in other areas."
China's overall international goods trade hit a record annual high in 2022, according to a Xinhua report last month. The figure totaled 42.07 trillion yuan ($6.2 trillion) in General Administration of Customs data, up 7.7% from the year before. Exports climbed 10.5% to 23.97 trillion yuan, while imports rose 4.3% to 18.1 trillion yuan.
China's gross domestic product expanded a real 3% in 2022, among its weakest annual growth rates in decades, with the economy hamstrung by Beijing's zero-COVID policy.
Vice Premier Liu He reassured the audience at the World Economic Forum's annual meeting in Davos last month that China is prioritizing economic growth and opening up in all directions.
"Some people say China will go for the planned economy. That's by no means possible," the economic policy chief said. "China's door to the outside will only open wider," he said.
U.S. economic growth slowed to 2.1% in 2022 from 5.9% the year before. But with the unemployment rate at historic lows and inflation slowing, overly pessimistic sentiments toward the American economy have receded.
Whether U.S.-China trade will continue to grow remains uncertain. Diplomatic relations have been strained further by the suspected Chinese spy balloon that flew over American airspace and was shot down by the U.S. military the over the Atlantic Ocean. In a report released last month, Boston Consulting Group forecast that bilateral trade will decline about 10% through 2031.
Additional reporting by Takafumi Hotta in New York.