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Trade between China and the US totalled US$449 billion last year.

Sino-US trade ties shifting rapidly

China's massive economic potential and rapid growth as an exporter tend to skew perceptions of the influence the nation has on global trade, particularly compared with the United States.

China's massive economic potential and rapid growth as an exporter tend to skew perceptions of the influence the nation has on global trade, particularly compared with the United States.

For sure, China has become a major player in international trade since joining the World Trade Organisation in 2001, but it is still not the biggest trading nation, or even the most important trading partner of the US.

"China's trade flows are not the biggest in the world, as would be commensurate with purchasing power parity-derived estimates of real GDP," says Carl Weinberg, the chief economist at New York-based High Frequency Economics.

Weinberg's calculations of imports and exports show US trade was worth slightly more than US$5 trillion last year, while China managed US$4.2 trillion.

The gap is narrowing fast though as total trade in China has increased almost eightfold since 2001, while the US only managed to roughly double its total.

The inter-dependency of trade between the world's two biggest economies is also becoming more significant, even though the value of Sino-US trade at US$449 billion last year was still only about two-thirds of the US$635 billion done with Canada - the biggest trading partner of the US.

But that could change over the course of the coming decade, according to a recent study by Weinberg.

Close to 20 per cent of all Chinese exports go to the US, while almost 50 per cent more than that go to the euro zone and more than twice as much go to Japan.

While that still leaves 65 per cent of Chinese exports going to the rest of the world, the concentration of trading activity with the US makes trade dependency a key relationship to analyse.

Only 5 per cent of US exports last year went to China. In terms of China's total imports, the proportion was smaller still - just 3.5 per cent and a negligible proportion of its economic activity.

On the flip side, about 10 per cent of US imports were from China, or about 3 per cent of US gross domestic product.

"Who is the biggest of them all and how will trade evolve? Things are changing fast," Weinberg wrote.

This article appeared in the South China Morning Post print edition as: US still world's leading trader
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