US exports to China experienced a surge at the end of 2013, capping off a year of steady bilateral trade growth and continuing economic recovery. US exports to China grew by 24 percent year-on-year in the fourth quarter of 2013, led by oilseeds and grains, according to data from the US International Trade Commission. October through December were strong months for US exports to China, with each month seeing an increase in exports of at least 20 percent, compared to the same month in 2012.
This trend helped boost total 2013 US exports to China. Compared to 2012, which had a growth rate of 6.5 percent, US exports rose 10 percent year-on-year. US exports to China grew faster than exports to America’s first and second-largest trading partners, Canada (which experienced 3 percent growth in US imports) and Mexico (which had 4.5 percent growth in US imports). The growth in US exports to China also outpaced those of other US trading partners except Hong Kong, which saw annual import growth from the United States reach 13 percent.
After oilseeds and grains—which include soybeans, corn, and wheat—the strong growth in US exports in the fourth quarter was led by aerospace products, motor vehicles, and waste and scrap material. These same categories helped bolster US exports to China in 2011 and 2012, when they were also among the top five US exports. China’s increasingly affluent population has created a growing demand for high-quality agricultural products. The demand for meat in particular has gone up more than nine fold since 1978, and the demand for feed grains has also skyrocketed. As a result of being unable to meet this demand on its own, China has been buying the most US agricultural products of any trading partner, according to USDA.
Similarly, the US auto market experienced a “revival” in exports in 2013, one that was expected to boost US auto exports to nearly two million that year. In China, though regulators have imposed restrictions on car usage in some areas, consumers continue to clamor for new cars. In 2013, more than 20 million cars were sold in China, resulting in 14 percent year-on-year sales growth. In the aviation sector, China’s recently released urbanization plan for 2014-2020 calls for 90 percent of the population to be covered by civil aviation infrastructure by 2020—targets that could contribute to growing US exports.
While US exports to China grew, imports from China to the United States also rose in 2013, up 4 percent from 2012. This represents a slowdown in the growth of Chinese imports, which grew by 9 percent in 2011 and 6 percent in 2012.
Though the US-China trade deficit grew in 2013, the trade deficit grew at the slowest year-on-year rate in seven years, not including 2009, which was heavily impacted by the global financial crisis.
To illustrate the benefits of US exports to China, the US-China Business Council will soon be releasing its 2013 State Export Report, which measures state-by-state exports to China.
By Stephanie Henry