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From Australia to India, China’s rifts with major trade partners are a growing economic threat
- China has disputes or strained ties with 12 of its top 20 export destinations. While countries individually need China more than it needs them, collectively this argument is harder to make
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As China’s global footprint evolves, points of difference will arise with other nations. That’s unavoidable, but currently Beijing is getting embroiled in too many economic disputes with major trading partners. These economic disputes could collectively pose a material risk not only to China’s export sector but to the prospects for the Chinese economy as a whole.
On a country-by-country basis, it could plausibly be argued that other nations need China more than China needs them, but collectively that argument is harder to make. A glance at China’s top export destinations for goods in 2019, as collated by the International Monetary Fund, illustrates this.
In order of importance, these were the United States, Hong Kong, Japan, South Korea, Vietnam, Germany, India, the Netherlands, the United Kingdom, Taiwan, Singapore, Malaysia, Russia, Australia, Mexico, Indonesia, Thailand, the Philippines, Canada and Brazil.
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On the plus-side, China’s economic relations with Russia are cordial. Additionally, of those top 20 export partners, China has free-trade agreements with Australia, Singapore and South Korea. China also has a free-trade agreement with the 10-country Association of Southeast Asian Nations as well as a Closer Economic and Partnership Arrangement with Hong Kong.
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Of course, a free-trade agreement is no guarantee of a harmonious economic relationship, as is apparent in the recent deterioration in trade ties between Australia and China, a deterioration that has accompanied a marked souring in broader Beijing-Canberra relations.
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