Now Is It the United States’ Turn to Make China Economically Dependent?
Monday, May 16, 2011
If General Motors once again becomes one of the world’s most successful corporations, it will have China to thank in large part.
By taking advantage of the Chinese’s growing hunger for automobiles and road trips, GM is now the No. 2 seller of cars in the Asian country, behind only Volkswagen. The automaker’s booming sales have been driven by China’s demand for luxury Buicks, minivans and economy Chevrolets.
In 2010, GM sold more cars in China than in the United States. The company is expected to continue to be more successful with Chinese buyers than Americans in the coming years.
Kevin E. Wale, president and managing director of the GM China Group, told The Washington Post that the demand for cars in China will grow 10%-15% annually for the next five years.
The United States still imports far more from China than it exports, but the gap is slowly shrinking. As recently as 2005, the ratio of imports to exports was 6 to 1. By 2010, it had dropped to 4 to 1, and for the first quarter of 2011, the ratio was only 3.3 to 1. If this rate keeps up for the rest of the year, it would be the smallest in 20 years.
So what is it that Americans have and Chinese want? Although it is true that U.S. automobile exports to China tripled between 2009 and 2010 (to $3.4 billion), passenger cars still ranked only sixth in terms of the dollar value for exports to China last year. What are the top five? Soybeans ($10.8 billion), semiconductors ($6.4 billion), airplanes and related parts ($5.8 billion), miscellaneous industrial machinery ($4.0 billion) and plastic materials ($3.7 billion). The Chinese also buy large quantities of American copper, wood pulp and chemicals.
-David Wallechinsky, Noel Brinkerhoff
GM Sees China as an Open Road to Profits (by Keith Richburg, Washington Post)
U.S. Exports to China by 5-digit End-Use Code 2002-2010 (U.S. Census Bureau)
Trade in Goods with China (U.S. Census Bureau)
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