ARLINGTON, Va. -- For calendar year 2013, Chinese manufactured exports are on track to nearly double U.S. exports, with a surplus of more than $900 billion, compared with a U.S. deficit of $500 billion, as the trade gap between these global powers continues to expand, according to a report from the Manufacturers Alliance for Productivity and Innovation (MAPI).

In U.S. Trade in Manufactures Flat in the First Quarter While Chinese Trade Continues to Soar (PA-121), Ernest Preeg, Ph.D., MAPI senior advisor for international trade and finance, highlights that at $299 billion, U.S. global exports of manufactures in the first quarter of 2013 were the same as in 2012, and the trade deficit increased by only $2 billion to $109 billion.

Chinese exports, in striking contrast, rose by 19 percent over the same period, to $484 billion, while the trade surplus soared by 28 percent to $175 billion.

“The economic and strategic importance of these rapidly widening differences in exports and trade balances for manufactures relates to the role of high-technology industries for technological innovation and military modernization,” Preeg said. “For the United States, 75 percent of research and development and 90 percent of new patents come from the manufacturing sector, and manufacturing companies are the backbone of defense industry.

“Chinese economic strategy in recent years has centered on rapid, export-led growth,” he added. “Based on trade performance in manufactures, it has been a highly successful strategy.”

Exports for the nine largest high-technology industries, which account for over half of total exports for both countries, recorded an increase of $40.3 billion for China from the first quarter of 2012 to the first quarter of 2013, and a disturbing $1.4 billion decline for the United States.

The report notes that U.S.-China bilateral trade in manufactures is extremely unbalanced, with U.S. imports from China at least six times larger than U.S. exports to China. In the first quarter of 2013, U.S. imports were up by $3.6 billion compared with 2012, to $95.2 billion, while exports to China rose by $1.5 billion, to $16.8 billion. Preeg estimates that the $2.1 billion increase in the deficit in the first quarter equates to a loss of about 10,000 American manufacturing jobs.

Indeed, Preeg argues, if the U.S. maintains its current policy course, it is difficult to project a reversal of the relative rise of China as the world’s number one exporter, with an ever larger trade surplus.

“Given China’s undervalued currency and other financial incentives for investment in high-technology, export-oriented industries, not to mention violations of intellectual property rights, it is unlikely that Chinese export growth will slow sufficiently for the trade surplus to decline,” Preeg concluded.

U.S. and Chinese Exports and Trade Balances in Manufactures*








Exports of Manufactures






   United States












Trade Balance in Manufactures






   United States













*SITC 5-9.

Source(s): U.S. Customs Bureau, FT-900, and China’s Customs Statistics (Monthly Exports and Imports)