US bests rivals in trade with China
United States trade with China has held up well in the first half of this year compared with the dismal Chinese trade balances of Japan and the countries of Western Europe.
Figures released Aug. 10 in Peking by the US Commerce Department show that Sino-US trade in the first six months of 1982 reached $2.75 billion compared with $2.4 billion in the corresponding period last year.
Although US exports to China were down some 8 percent this year on last year -- a reflection of the readjustment policy which resulted in retrenchments in Chinese purchases of plant and equipment -- the overall picture for American business in China remains relatively buoyant.
The US registered a $662.7 million trade surplus in the first half of the year compared with $990.1 million in the corresponding period last year.
US exports to China in the six months to June 1982 amounted to $1.71 billion compared with $1.86 billion in the first half of 1981. US imports from China reached $1.04 billion which was about 20 percent up on the corresponding period last year.
A comparison between the US trade performance in China this year and those of Japan and West Germany, its main competitors, shows that American business did well in a difficult market.
Japan's exports to China in the six months to June this year fell to $1.76 billion while imports surged to $2.71 billion -- resulting in a massive turnaround in the balance of trade between the two countries. Japanese sales of plant and equipment were down by 60 percent and its sales of steel products were off 10 percent.
Similarly, West German trade with China has fallen in a hole this year. German exports went down to $321.6 million in the first five months of this year -- 22 percent lower that the corresponding period last year. Meanwhile, imports from China in the first five months went up 3.5 percent to $294.4 million.
It was a similar story in China's trade relations with its other major trading partners of the industrialized West. The only notable exception was Canada, which did well in the first six months of this year, based on sales of wheat, potash, and lumber products.
Wheat and raw cotton continue to be the main US exports to China, although cotton shipments to the Chinese market registered a sharp drop due to increased production by China itself and also because the Chinese had built up reasonable stockpiles.
China's own worldwide trade performance in the first six months of the year was creditable. According to figures released in July, China registered a trade surplus in the order of $2.8 billion. Chinese exports in the first six months of 1982 jumped by 10 percent compared with the corresponding period last year, while imports were down by 19 percent.
China now appears to be heading this year for a substantial trade surplus in contrast to the small deficit it officially recorded on its visible trade in 1981. A reflection of China's relatively buoyant trading position is the more than $5 billion it is now holding in foreign exchange reserves.
According to a report in the Shanghai-based World Economic Herald, China's improved export performance in the six months to June this year was due largely to increased shipments of petroleum products (15 percent) and machinery (19 percent).
US Commerce Department officials in Peking are pleased with the results this year. ''We still have a very substantial trade surplus,'' says one official. Of course, the US would have liked to see its exports increase, he adds, but it understood that at a time of economic readjustment in China this was unrealistic.
Furthermore, the official says it is unlikely China would pursue a long-term policy of maintaining a sizable trade surplus. He observes that the Chinese are now well placed to increase purchases in the West. The official mentions commodities, chemicals, fertilizers, and machinery for use in oil development as likely target areas for the Chinese.
The official says that the Taiwan issue thus far did not appear to have affected Sino-US trade. He says both Zhao Ziyang, the Chinese premier, and Deng Xiaoping, the powerful Communist Party vice-chairman, are on record as saying that they would like to see economic and commercial relations maintained, regardless of what happens on the political side.
The official says that US companies had don% some useful business in China this year. He points out that bids for exploration leases in China's offshore waters were due to be lodged next week.
The official says that some US companies may not be quite as ambitious in their bidding as they may have been several years ago because times were now more difficult. However, he expects a high level of US involvement in China's offshore oil drilling program.
The other notable area of activity for American business this year is coal. Armand Hammer, chairman of Occidental Petroleum, signed an agreement earlier this year with the Chinese to carry out a preliminary study with a view to entering into a joint venture to develop a large steaming coal deposit at Pingshuo, several hundred kilometers west of Peking.