Low dollar has increased U.S. export growth

Posted August 16, 2008

America’s exports are now growing faster than China’s.

Baltimore — (TFN): For the first time in years, China’s exports are growing more slowly than America’s. In the 12 months to June (the latest month available for both countries), America’s exports grew by 23%, well ahead of China’s 17% (in dollar terms). Export volumes show a similar trend. China’s rose by 11% in the year to the second quarter, while America’s climbed by 12% (see left-hand chart). Stephen Green, an economist at Standard Chartered, expects China’s real export growth to fall to zero by the end of this year and to turn negative next year.

In July China’s exports surged a mighty 27% from where they were a year before, but this does not alter the picture much. China’s monthly trade figures are notoriously volatile and if exports are converted into yuan—the currency which matters for China’s GDP growth—growth has fallen sharply to an average of 12% in the past three months, from 35% in early 2005. Meanwhile, import growth has quickened over the past year, due in part to higher oil bills.

As a result, China’s trade surplus in yuan terms in the first seven months of this year was almost 20% smaller than in the same period of 2007. Even in dollar terms it had fallen by 10%.

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