China’s Power Over the US and the World

Ask Americans what they think of China and many will say it is a major culprit that steals US manufacturing jobs by using cheap labor.  Bankers and CEOs may tell you that China manipulates it’s currency to further steal jobs.  President Elect Trump seems to agree with these statements according to some of his latest tweets.  So what should we know about China’s power over the US and the world?

Chinese Power over US Imports and Exports

  • The US is the number one importer of Chinese goods totaling $483 billion in 2015.  That is equal to 18% of China’s $2.7 trillion exports.
  • China is the third largest importer of US goods with a total of $113b in 2015.  This is equal to 7% of total US goods exported of $1.5 trillion.
  • Two take aways from the above data:
    • China’s export economy is larger than the US’s.  This makes sense given China is a bigger country.
    • US’s export economy is more diverse than China’s i.e. the US export economy is less dependent on any one country than China is.
  • China has led growth in US exports of both goods and services over the last decade.  This means China is  increasing its importance to US companies who export their goods and services around the world.

Chinese Power over US  and World Debt

Chinese Power Around the World

China’s influence and investment around the world has been steadily growing as China takes its place as a world power.  This chart from the Heritage Foundation, puts Chinese investment in other countries into perspective.  China has overtaken the US as the world leader in investments in foreign countries.

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Chinese Power and Influence

Chinese power and influence on the world stage is diverse but it is not without its weaknesses.  Trump surely sees the weaknesses.  Exploiting China’s  weaknesses for the benefit of the US may be possible but it must be done carefully and will likely require the support of other countries.  The support of the other countries will depend on what those countries have to lose in taking on China.  China has been very successful in making sure a growing number of countries have a lot to lose through China’s direct and indirect control of exports and imports, direct investment and debt.

In a showdown between US and China who would win is very much in doubt.  What is much more likely is that any dispute would result in a stalemate but only after both sides suffer losses.

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