China Becomes World's Biggest Exporter, Overtakes Germany

03/18/2010 05:12 am ET | Updated May 25, 2011

BEIJING — Already the biggest auto market and steel maker, China edged past Germany in 2009 to become the top exporter, yet another sign of its rapid rise and the spread of economic power from West to East.

Total 2009 exports were more than $1.2 trillion, China's customs agency said Sunday. That was ahead of the 816 billion euros ($1.17 trillion) forecast for Germany by its foreign trade organization, BGA.

China's new status is mostly symbolic but highlights its growing presence as an industrial power, major buyer of oil, iron ore and other commodities and, increasingly, as an investor and key voice in managing the global economy.

Its ability to unseat longtime export leader Germany reflects the ability of agile, low-cost Chinese manufacturers to keep selling abroad even as other exporters have been hammered by a slump in global demand.

China overtook Germany in 2007 as the third-largest economy and is expected to unseat Japan as No. 2 behind the United States as early as this year. Its trade boom has helped Beijing pile up the world's biggest foreign currency reserves at more than $2 trillion.

The global crisis speeded China's rise up the ranks as a 4 trillion yuan ($586 billion) government stimulus kept its economy and consumption growing while the U.S. and other markets struggled with recession. Chinese economic growth rose to 8.9 percent in the third quarter of 2009 and the government is forecasting a full-year expansion of 8.3 percent.

On Friday, data released by an industry group showed China topped the slumping United States in auto sales in 2009 – a status industry analysts a few years ago did not expect it to achieve until as late as 2020.

Economists and Germany's national chamber of commerce said earlier the country was likely to lose its longtime crown as top exporter.

China's exports per person are still much lower than those of Germany, which has a much smaller population of 80 million people. China sells low-tech goods such as shoes, toys and furniture, while Germany exports machinery and other higher-value products. German commentators note their country supplies the factory equipment used by top Chinese manufacturers.

"If China grows, this pushes the world's economy – and that's good for export-oriented Germany as well," an economist for the German Chamber of Industry and Commerce, Volker Treier, said last month.

Of course, with 1.3 billion people, China is still one of the world's poorest countries. It ranked 130th among economies in per capita income in 2008, according to the World Bank.

China's trade ended 2009 with exports rebounding in December, jumping 17.7 percent after 13 months of declines, the customs agency said.

The upturn was an "important turning point" for exporters, a customs agency economist, Huang Guohua, said on state television, CCTV.

"We can say that China's export enterprises have completely emerged from their all-time low in exports," Huang said.

Plunging demand in 2008 forced thousands of factories to close and threw millions of laborers out of work.

China's trade surplus shrank by 34.2 percent in 2009 to $196.07 billion, the customs agency said. That reflected China's stronger demand for imported raw materials and consumer goods.

Iron ore imports rose 41.6 percent to 630 million tons, while oil imports rose 13.9 percent to 1.4 billion barrels, the agency said. Economists say the buying binge has been driven in part by a Chinese effort to build up stockpiles while global prices are low.

The United States and other governments complain that part of China's export success is based on currency controls and improper subsidies that give its exporters an unfair advantage against foreign rivals.

Washington has imposed anti-dumping duties on imports of Chinese-made steel pipes and some other goods, while the European Union has imposed curbs on Chinese shoes.

The U.S. and other governments also complain that Beijing keeps its currency, the yuan, undervalued. Beijing broke the yuan's link to the dollar in 2005 and it rose gradually until late 2008, but has been frozen since then against the U.S. currency in what economists say is an effort by Beijing to keep its exporters competitive.

The dollar's weakness against the euro and some other currencies pulls down the yuan in markets that use them and makes Chinese goods even more attractive there, adding to China's trade surplus.

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Associated Press writer Gillian Wong contributed to this report.

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