US Congressional districts see rapid export growth to China

Cooks cut US beef during a promotional event in Beijing over the weekend. Fred Dufour / AFP?

The booming US exports to China are vital to the US economy and nearly all Congressional districts, according to a report released on Wednesday by the US-China Business Council (USCBC).

The report was released at a time of serious concern about the bilateral trade after the US announced two weeks ago a Section 301 investigation into China's intellectual property policies and practices and a threat by US President Donald Trump this week to cut trade with any country doing business with the Democratic People's Republic of Korea.

The USCBC report shows that 432 out of 435 Congressional districts have seen triple-digit growth in exports of goods and services to China since 2006.

The value of US goods and services exports to China is significant for congressional districts, the report said. China was a top three goods export market for 263 districts in 2016, and among the top five for 358 districts. China was the top services export market in 2015 for 93 congressional districts and a top five market for 399 districts.

The 448-page report, titled Congressional District Export Report, includes detail figures for each district and concludes that US exports to China are vital to US economic growth.

According to the report, China was the third largest export market for the US in 2016, trailing Canada and Mexico. Total US good exports to China stood at $113 billion in 2016.

The exports of US services to China are becoming significant. In 2015, the most recent complete year of available data, US services exports to China reached $47 billion, making China also the third-largest services export market. From 2006 to 2015, US services exports to China shot up more than 400 percent, compared with 76 percent to the rest of the world.

The services sector accounts for an increasing part of China's GDP as the country moves toward a consumption-based economy.

Despite of slowing global trade, US exports of goods services to China continue to outpace exports to other major markets, according to the report.

On average, US goods exports to China grew by 8 percent annually over the past 10 years, despite the modest decline over the past two years versus 2014. Of US' top 10 goods export markets, only Japan had positive export growth in 2016.

US services exports to China also grew more rapidly than all other major trading partners, averaging nearly 19 percent annually over the last decade. Only Brazil came close over the same period, with 17 percent average annual growth, according to the report.

China's maturing economy is undergoing important changes that have resulted in a slowdown in GDP and trade growth. Even so, US exports of goods and services to China have grown faster than exports to any other major US trading partner over the past decade, the report said.

From 2006 to 2016, US goods exports to China increased 114 percent. That is greater than the growth to any of the other top 10 US goods export markets.

The report said exports continue to play an essential role in the US economy and job growth. US goods exports to China come from a wide range of industries including transportation equipment, agriculture, computers and electronics, and chemicals. These exports also sustain logistics jobs in US ports and throughout the country. US services exports to China in 2015 included travel and education, royalties, transportation, business and professional services, and financial services.

The report noted that the huge potential given that US goods accounted for only about 8.4 percent of Chinese mainland's total imports in 2015, trailing European Union, Republic of Korea, Japan and Taiwan. The US had a 10-percent share in 2000.

While the report called on the Trump administration to pursue results-oriented engagement with China designed to address some of the trade and no-trade barriers, it said the US should push forward negotiations with China on a high-standard bilateral investment treaty (BIT).

Bilateral BIT talks advanced rapidly under the later years of the Obama administration. But there is no sign that the Trump administration will continue the talk anytime soon.

chenweihua@chinadailyusa.com