Order Code RL31403
Report for Congress
Received through the CRS Web
China’s Trade with the
United States and the World
May 3, 2002
Thomas Lum
Analyst in Asian Affairs
Dick K. Nanto
Specialist in Industry and Trade
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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China’s Trade with the United States and the World
Summary
International trade of the People’s Republic of China (PRC) has become an
issue as the United States has granted permanent normal trade relations (PNTR)
status to China and the PRC has entered the World Trade Organization (WTO). As
the Chinese market has opened to world trade, it has become both a source of imports
into the United States and a destination for U.S. exports and investments. In 2001,
China was the fourth largest trading partner of the United States while the United
States was the PRC’s second largest trading partner, largest export market, and
largest source of foreign investment.
With the exception of 1993, when the PRC government temporarily loosened
state controls on imports, China ran merchandise trade surpluses with the world
throughout the 1990s, although its current account surpluses have been smaller
because it runs deficits in trade in services. In 2000, China ran its largest trade
surplus with the United States ($83. 8 billion), followed by the European Union
($44.9 billion), and Japan ($24.9 billion). In 2000, China surpassed Japan as the
country with which the United States runs its largest trade deficit. In 2001, the
United States incurred its highest merchandise trade deficits with China ($83.0
billion), Japan ($68.9 billion), and Canada ($53.2 billion). Among other Asian
nations, the United States also incurred large trade deficits with Taiwan ($15.2
billion), Malaysia ($12.9 billion), and South Korea ($12.9 billion). In 2000, the
United States was the second largest supplier of utilized foreign direct investment to
China ($4.4 billion), after Hong Kong ($15.5 billion).
In 2000, the United States was the third largest exporter to China ($16.2 billion),
after Japan ($30.4 billion) and the EU ($24.5 billion), excluding Hong Kong and
Taiwan. However, China still represents a smaller market for U.S. goods than
Taiwan ($24 billion), with a population of 21 million, and Singapore ($17 billion),
with a population of 3.5 million. The United States was China’s largest overseas
market ($100 billion), followed by the EU ($69.5 billion) and Japan ($55.3 billion).
In the 1990s, the most dramatic increases in the value Chinese imports to the
United States have not been in sectors such as footwear and apparel – traditional
labor-intensive industries in which China is already quite competitive – but in high
technology sectors, such as office and data processing machines, telecommunications
and sound equipment, and electrical machinery and appliances as well as in
miscellaneous manufactured items. China has also become a major supplier of
furniture, building fixtures, and travel goods and handbags to the United States.
Over the medium term, China is expected to continue to run trade surpluses with
the world, although likely at lower levels than those reached during 1997-98. If
China opens its economy as required under the WTO, its current account surplus is
projected to turn into a deficit in 2004 and continue in deficit through the end of the
decade as its deficit in its services trade grows.

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Contents
China’s Trade with the United States, Europe, and Japan . . . . . . . . . . . . . . . . . . . 4
Balance of Trade By Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
U.S. Imports From China by Selected Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Iron and Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Office Machines and Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Telecommunications and Sound Equipment . . . . . . . . . . . . . . . . . . . . . . . . 17
Electrical Machinery and Parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Road Motor Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Building Fixtures/Lighting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Travel Goods, Handbags . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Apparel and Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Footwear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Professional, Scientific, and Controlling Instruments . . . . . . . . . . . . . . . . . 25
Photographic/Optical Equipment, Watches/Clocks . . . . . . . . . . . . . . . . . . . 26
Foreign Direct Investment in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
List of Figures
Figure 1. China’s Exports, Imports, and Balance of Merchandise Trade,
1980-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Figure 2. U.S. Exports, Imports, and Balanceof Merchandise Trade with
China, 1980-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Figure 3. European Union/European Economic Community Exports, Imports,
and Balance of Merchandise Trade with China, 1980-2000 . . . . . . . . . . . . . 6
Figure 4. Japan’s Merchandise Imports, Exports, and Balance of Trade with
China, 1980-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Figure 5. U.S., European Union, and Japan’s Merchandise Trade Balances
with China, 1980-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Figure 6. U.S. Merchandise Trade Balances with Selected Countries in 2001 . . 8
Figure 7. Top Six U.S. Imports from China by Industry, 1992-2002 . . . . . . . . . 10
Figure 8. U.S. Imports of Iron and Steel Products (SITC 67)
by Country and Group, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 9. U.S. Imports of Office Machines and Automatic Data Processing
Machines (SITC 75) by Country and Group, 1990-2001 . . . . . . . . . . . . . . . 16
Figure 10. U.S. Imports of Telecommunications and Sound Equipment
(SITC 76) by Country and Group, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . 17
Figure 11. U.S. Imports of Electrical Machinery/Parts (SITC 77) by Country
and Group, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Figure 12. U.S. Imports of Road Vehicles (SITC 78) by Country
and Group, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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Figure 13. U.S. Imports of Prefab Buildings, Sanitary, Plumbing, Heating,
and Lighting Fixtures/Fittings (SITC 81) by Country and Group,
1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Figure 14. U.S. Imports of Furniture and Parts (SITC 82) by Country
and Group, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Figure 15. U.S. Imports of Travel Goods, Handbags, and Similar Products
(SITC 83) by Country and Group, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . 22
Figure 16. U.S. Imports of Apparel and Clothing Accessories
(SITC 84) by Country and Group, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 17. U.S. Imports of Footwear (SITC 85) by
Country and Group, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Figure 18. U.S. Imports of Professional, Scientific, and Controlling
Instruments (SITC 87) by Country and Group, 1990-2001 . . . . . . . . . . . . . 25
Figure 19. U.S. Imports of Photographic Equipment/Supplies, Optical Goods,
and Watches/Clocks (SITC 88) by Country and Group, 1990-2001 . . . . . . 26
List of Tables
Table 1. Top Twenty U.S. exports to China, 1993-2001 . . . . . . . . . . . . . . . . . . . 9
Table 2. Top Twenty U.S. Imports from China, 1993-2001 . . . . . . . . . . . . . . . . 11
Table 3. U.S. Balance of Trade With China by Sector, 1999-2001 . . . . . . . . . . . 13
Table 4. U.S. Imports of Iron and Steel Products (SITC 67) from Selected
Countries and Country Groups, 1990, 1997-2001 . . . . . . . . . . . . . . . . . . . . 15
Table 5. U.S. Imports of Office Machines and Automatic Data Processing
Machines (SITC 75) from Selected Countries and Country Groups, 1990,
1997-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 5. U.S. Imports of Telecommunications and Sound Equipment
(SITC 76) from Selected Countries and Country Groups, 1990,
1997-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table 6. U.S. Imports of Electrical Machinery and Parts (SITC 77) from
Selected Countries and Country Groups, 1990, 1997-2001 . . . . . . . . . . . . . 18
Table 7. U.S. Imports of Road Motor Vehicles (SITC 78) from Selected
Countries and Country Groups, 1990, 1992-2001 . . . . . . . . . . . . . . . . . . . . 19
Table 8. U.S. Imports of Prefabricated Buildings; Sanitary, Plumbing,
Heating and Lighting Fixtures and Fittings (SITC 81) from Selected
Countries and Country Groups, 1990, 1997-2001 . . . . . . . . . . . . . . . . . . . . 20
Table 9. U.S. Imports of Furniture and Parts (SITC 82) from Selected
Countries and Country Groups, 1990, 1997-2001 . . . . . . . . . . . . . . . . . . . . 21
Table 10. U.S. Imports of Travel Goods, Handbags, (SITC 83) from
Selected Countries and Country Groups, 1990, 1997-2001 . . . . . . . . . . . . . 22
Table 11. U.S. Imports of Apparel and Clothing Accessories (SITC 84)
from Selected Countries and Country Groups, 1990, 1997-2001 . . . . . . . . 23
Table 12. U.S. Imports of Footwear (SITC 85) from Selected Countries and
Country Groups, 1990, 1997-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 13. U.S. Imports of Professional, Scientific and Controlling
Instruments and Apparatus (SITC 87) from Selected Countries
and Country Groups, 1990, 1997-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 14. U.S. Imports of Photographic Apparatus, Equipment and
Supplies and Optical Goods; Watches and Clocks (SITC 88)
from Selected Countries and Country Groups, 1990, 1997-2001 . . . . . . . . 26

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Table 15. China’s Utilized Foreign Direct Investment Inflows, Top
Ten Foreign Investors, 1998-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table A1. China’s Merchandise Trade with the World and with the United
States, 1980-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table A2. China’s Merchandise Trade With the European Union, 1980-2000 . . 29
Table A3. China’s Merchandise Trade With Japan, 1980-2000 . . . . . . . . . . . . . 30
Table A4. Major Country Merchandise Exports to China, Imports from
China, and Trade Balances with China, 1999, 2000 . . . . . . . . . . . . . . . . . . 31
Table A5. U.S. Merchandise Trade Balances with Selected Asian
Developing Nations, 1980-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

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China’s Trade With the United States and
the World
International trade of the People’s Republic of China (PRC) has become an
issue as the United States has granted permanent normal trade relations (PNTR)
status to China and the PRC has entered the World Trade Organization (WTO).1 As
the Chinese market has opened to world trade, it has become both a source of imports
into the United States and a destination for U.S. exports and investments. In 2001,
China was the fourth largest trading partner of the United States while the United
States was the PRC’s second largest trading partner, largest export market, and
largest source of foreign investment. In 2000, China surpassed Japan as the country
with the biggest trade deficit with the United States.
This report provides basic data and analysis of China’s international trade with
the United States and with the world. The purpose of this report is both to provide
actual data and charts of China’s merchandise trade, to highlight certain trends in the
trade flows, and to briefly discuss policy options. Both Chinese and trading partner
data are presented for China’s trade with the United States, Japan, and the European
Union. Charts showing import trends by sector for the United States highlight
China’s growing market shares in many industries and also show import shares for
Japan, Canada, Mexico, the European Union, and ASEAN (Association for Southeast
Asian Nations). Data on foreign direct investment in China also are included. For
discussions of U.S. trade and other policies toward China, see: CRS Report
RS20139, China and the World Trade Organization, CRS Issue Brief IB91121,
China-U.S. Trade Issues, and Issue Brief IB98014, China’s Economic Conditions,
all by Wayne M. Morrison, and CRS Issue Brief IB98018, China-U.S. Relations, by
Kerry B. Dumbaugh. This report will be updated as circumstances warrant.
China not only runs a surplus in its trade with the world, but it runs a surplus
most of the time with the world’s three industrial centers: the United States, the
European Union, and Japan. The U.S. trade deficit with China at $83.8 billion in
2000 ($83.0 in 2001) was the largest, while that of the EU with China at $44.9 billion
was over half as large, and that of Japan at $24.9 billion nearly a third as large.
How does the U.S. trade deficit with China compare with the U.S. trade deficit
with other nations? In 2001, the largest U.S. merchandise trade deficits were with
China ($83 billion), Japan ($69 billion), Canada ($53 billion), Mexico ($30 billion),
and Germany ($29 billion). Among major Asian nations, the United States incurred
large trade deficits with Taiwan ($15 billion), Malaysia ($13 billion), South Korea
1 P.L. 106-286 granted permanent normal trade relations treatment to the People’s Republic
of China, effective upon the PRC’s accession to the WTO (an event that occurred on
December 11, 2001).

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($13 billion), Thailand ($8 billion), Indonesia ($7 billion), and the Philippines ($3.6
billion)
The U.S. trade deficit with China has two unusual characteristics. First is its
size – $83 billion. Second is the large gap between imports from and exports to
China. Japan in 2001, for example, exported 2.2 times more to the U.S. than it
imported, while Canada exported 1.3 times more than it imported. China, by
comparison, exported 5.3 times more to the U.S. market in 2001 than it imported.
This suggests that the Chinese market is vastly underdeveloped as a destination for
U.S. exports.
Between 1996 and 2001, however, China’s imports from the United States have
grown faster (up 10%) than those by Canada (4.2%) or by Japan (-3.6%), although
China’s have been increasing from a low base. By joining the World Trade
Organization China is required to lower import barriers on many products in which
the United States is competitive. This is expected to increase U.S. export
opportunities there.
According to Japanese, European, and U.S. data, in 2000, Japan was the largest
overseas supplier of products to China with $30.4 billion in exports. The EU was the
second largest supplier with $24.5 billion, while the United States exported only
$16.2 billion worth of merchandise to the PRC in 2000 and $19.2 billion in 2001.
Considering that the United States is the world’s largest trading nation and exported
$57 billion to Japan in 2001, its exports to China seem rather low. In 2001, the
United States exported more to South Korea ($22 billion), France ($22 billion), and
almost as much to Taiwan ($18 billion) as it did to China.
The United States is China’s largest overseas market with $100 billion in U.S.
imports from China in 2000, followed by the EU with $69.5 billion in imports from
China, and Japan with $55.3 billion. China was the fourth largest source of imports
for the United States in 2000. Canada ($229 billion), Japan ($146 billion), and
Mexico ($135 billion) exported more to the United States in 2000 than did China, but
China sold more to the American market than did Germany ($58 billion), the United
Kingdom ($43 billion), Taiwan ($40 billion), or South Korea ($40 billion). In short,
China (with the help of foreign investors) is a major supplier of products to the U.S.
market. According to Chinese data, the United States was the PRC’s second largest
trading partner in 2000 after Japan. Bilateral trade between China and the United
States totaled $74 billion compared with $83 billion between China and Japan.
In terms of the balance of trade with China by major sector, the sectors in which
the United States runs the largest trade deficits are those that depend on abundant and
low-cost labor. These include toys, sports equipment, footwear, apparel, leather
bags, and textiles. Among the large deficit sectors, however, are electrical
machinery, machinery, and motor vehicles (mostly motorcycles and auto parts).
Some of China’s competitiveness in these sectors may be based on its underlying
economic advantages combined with foreign technology and manufacturing
processes, but in certain areas, such as motor vehicles, the Chinese surplus appears
to be based primarily on import restrictions. Under China’s WTO accession
agreement, tariffs on automobiles are to drop from 100% to 25%. Moreover, in
plastic, optical and medical instruments, books and magazines, soaps and waxes,

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cosmetics, and cotton yarn, the United States runs a surplus in its balance of trade
with the world but a deficit with China. These deficits run counter to market
expectations.
The sectors in which the United States runs a trade surplus with China mirror
U.S. competitive advantages and include aircraft and agricultural products. In two
sectors, a deficit in U.S. trade with China has turned into a surplus. Edible fruit and
nuts went from a $30 billion deficit in 1999 to a surplus of $7 billion in 2001.
Likewise, miscellaneous food went from a deficit of $17 billion to a surplus of $23
billion. This indicates that China’s market for agricultural products may becoming
more open to U.S. exports.
U.S. imports from China are moving up the technology ladder. While imports
in sectors such as footwear and apparel continue to grow, imports in many high-
technology sectors are growing faster. These include office and data processing
machines (up 1,055% between 1993 and 2001), electrical machinery and appliances
(up 428%), and telecommunications and sound equipment (up 343%). In sectors
such as footwear, building and light fixtures, furniture, and handbags, imports from
China have been displacing those from South Korea, Singapore, Thailand, and other
newly industrializing Asian nations. More than half of U.S. imports of footwear and
travel goods/handbags now come from China.
Current U.S. policy toward trade with China has been aimed primarily at
integrating China into the global trading system through China’s accession to the
WTO, the granting of permanent normal trade relations status, assisting the country
in establishing a modern commercial, legal, regulatory, and financial infrastructure,
promoting American businesses interests there, and in ensuring that China complies
with its commitments to liberalize its markets.2 The task is large because even
though for the past two decades China has been in transition from a closed
communist economy to an open, market-based socialist economy, many trade and
investment barriers still remain. In the 2002 report by the U.S. Trade Representative
on foreign trade barriers, the section on China takes up 27 pages and includes high
import duties, problems with tariff classification, non-tariff barriers, import quotas,
import licenses, lack of transparency, trading rights, standards, government
procurement, and lack of intellectual property rights enforcement.3 Many of these
barriers, however, are expected to be reduced as China implements the conditions of
its WTO accession agreement. Most countries now appear to be taking a wait-and-
see attitude while continuing to monitor problem areas as China attempts to make the
changes in its economy required to bring it into compliance with its WTO
commitments.
Since China is now a member of the WTO, any change in existing U.S. trade
policy toward that country would be subject to WTO rules and dispute settlement
procedures. On the other hand, if China does not live up to its WTO commitments,
2 For details, see: CRS Issue Brief IB91121, China-U.S. Trade Issues, by Wayne M.
Morrison.
3 U.S. Trade Representative. 2002 National Trade Estimate Report on Foreign Trade
Barriers. Washington, U.S. Government Printing Office, 2002. Pp. 44-71.

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CRS-4
the United States can bring a complaint before the WTO as it has done with other
trading partners.
China’s Trade with the United States, Europe, and
Japan
The data for U.S. trade with China differ from Chinese trade with the U.S.
primarily because of the treatment of products that China exports through Hong
Kong. China counts Hong Kong as the destination of exports sent there even if those
products are transshipped to other markets. The United States and many of China’s
other trading partners count Chinese exports that are transshipped through Hong
Kong as exports from China, not from Hong Kong. This changes the totals for
Chinese exports and the size of a country’s trade balance with China.
As shown in Figure 1 and Appendix Table A1, with the exception of 1993
(according to Chinese data), China has run a trade surplus in goods (merchandise)
each year over the past decade. That surplus emerged at the beginning of the 1990s,
changed to a $11 billion deficit in 1993 (when the government temporarily loosened
controls on imports), and then rose to a $46.5 billion surplus in 1998 before dropping
to $24.1 billion in 2000. In the 1980s, the U.S. ran trade deficits with China in all but
the first years of the decade.
Figure 1. China’s Exports, Imports, and
Balance of Merchandise Trade, 1980-2000
300
250
Exports
200
150
100
Balance
Imports
50
0
-50
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 992000
Sources: China MOFTEC; PRC General Administration of Customs.

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CRS-5
China’s current account surplus (includes trade in goods, services, and unilateral
transfers such as remittances and government to government payments) is smaller
than the surplus in its merchandise trade because of a deficit in its trade in services
of about $2.1 billion in 2001. In 1998, China’s current account surplus was $31.2
billion. In 1999, that surplus shrank to $21.1 billion due to a surge in imports and in
2000 fell again slightly to $20.5 billion. The continued growth in imports, deficit in
its services balance, and stalled U.S. economy reduced China’s current account
surplus to $16.5 billion in 2001. If China opens its economy as required under the
WTO, its current account surplus is expected to turn into a deficit in 2004 and to
remain in deficit throughout the decade.4
Figure 2. U.S. Exports, Imports, and Balance
of Merchandise Trade with China, 1980-2000
150
Imports
100
(U.S. figures)
50
Exports
(U.S. figures)
0
-50
Balance
Balance
(U.S. figures)
(China's figures)
-83.8
-100
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 992000
Sources: U.S. Department of Commerce; China MOFTEC; PRC General
Administration of Customs.
the
As shown in Figure 2 and Appendix Table A1, by either Chinese or U.S. data,
China runs a trade surplus with the United States. Although the Chinese figures show
it at only $28.1 billion in 2001, the United States reported it to be $83 billion.
As shown in Figure 3 and Appendix Table A2, the European Union also runs
a similar trade deficit with China. At a merchandise trade deficit of $31.8 billion in
1999, the deficit rose to 44.9 billion in 2000. This trade deficit also began in the
latter 1980s and has continued through the 1990s. According to Chinese figures,
however, The EU deficit with China began in the late 1990s and was only $7.3
billion in 2000.
4 DRI-WEFA. International Analysis – China. March 2002.

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Figure 3. European Union/European Economic
Community Exports, Imports, and Balance of
Merchandise Trade with China, 1980-2000
80
Imports
60
(EU/EEC Data)
40
Exports
(EU/EEC Data )
20
0
-20
Balance
(China's Data)
-40
Balance
(EU/EEC Data)
-60
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 992000
Note: For 1980-88, data are for the EEC12 nations. After 1988, for the EU 15.
Sources: IMF. Direction of Trade Statistics Yearbook (1999) ; Eurostat; China
MOFTEC; PRC General Administration of Customs.
Japan likewise since 1988 has been running a trade deficit with China. As
shown in Figure 4 and in Appendix Table A3, Japan’s balance of trade with China
(according to Japanese data) dropped from a surplus of $6 billion in 1985 to a deficit
of $5.9 billion in 1990 and $24.9 billion in 2000. Considering Japan’s reputation for
protecting its own markets, its widening trade gap with China seems remarkable.
According to Chinese data, however, China has run more annual trade deficits with
Japan than surpluses. In 1993, China reported a $7.5 billion deficit with Japan. In
2000, the PRC reported a $142 million surplus.
Figure 4. Japan’s Merchandise Imports,
Exports, and Balance of Trade with China,
1980-2000
60
Imports
(Japan's Data)
40
Exports
(Japan's Data )
20
Balance
(China's Data)
0
-20
Balance
(Japan's Data)
-40
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 992000
Sources: IMF; China MOFTEC; PRC General Administration of Customs;
JETRO.

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In summary, China not only runs a surplus in its trade with the world, but it runs
a surplus most of the time with the world’s three industrial centers: the United States,
the European Union, and Japan. (See Figure 5.) The U.S. trade deficit with China
at $83.8 billion in 2000 was the largest, while that of the EU at $44.9 billion was
about half as large, and that with Japan at $24.9 billion nearly a third as large.
Within the EU, in 2000, Germany’s trade deficit with China was $8.3 billion,
the U.K.’s was $4.4 billion, and France’s was $4.4 billion. South Korea, by contrast,
ran a $6.6 billion surplus with China in 2000. As shown in Appendix Table A4,
however, China’s trade statistics indicate smaller European trade deficits and a larger
South Korean surplus.
Figure 5. U.S., European Union, and Japan’s
Merchandise Trade Balances with China, 1980-
2000
20
Japan
EU/EEC
0
-20
-40
-60
U.S.
-80
-100
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 992000
Sources: U.S. Department of Commerce; IMF. Direction of Trade Statistics;
Eurostat; JETRO.
How does the U.S. trade deficit with China compare with the U.S. trade deficit
with other nations? In 2001, the largest U.S. merchandise trade deficits were with
China ($83 billion), Japan ($69 billion), Canada ($53 billion), Mexico ($30 billion),
and Germany ($29 billion). Among major Asian nations, the United States incurred
large trade deficits with Taiwan ($15 billion), Malaysia ($13 billion), South Korea
($13 billion), Thailand ($8 billion), Indonesia ($7 billion), and the Philippines ($3.6
billion). (See Figure 6 and Appendix Table A5.)

---

CRS-8
Figure 6. U.S. Merchandise Trade Balances with Selected Countries
in 2001
Country
China
-83
Japan
-68.9
Canada
-53.2
Mexico
-29.9
Germany
-29
Taiwan
-15.2
Italy
-13.9
Malaysia
-12.9
South Korea
-12.9
Thailand
-8.7
Netherlands
10
Australia
4.4
Hong Kong
4.4
Belgium
3.4
Egypt
2.9
Brazil
1.4
UAR
1.4
Panama
1
Argentina
0.9
Spain
0.6
-100
-80
-60
-40
-20
0
20
$ Billions
The U.S. trade deficit with China has two unusual characteristics. First is its
size. Second is the large imbalance between imports from and exports to China.
Japan in 2001, for example, exported 2.2 times more to the U.S. than it imported,
while Canada exported 1.3 times more than it imported. China, by comparison,
exported 5.3 times more to the U.S. market in 2001 than it imported. This indicates
that the Chinese market has been vastly underdeveloped as a destination for U.S.
exports. China’s imports from the United States (up 10% between 1996 to 2001)
recently have grown faster than those by Canada (4.2% over the same time period)
or by Japan (-3.6%), although China’s have been growing from a low base.5 By
joining the World Trade Organization China is required to lower import barriers on
many products in which the United States is competitive. This is expected to
increase U.S. export opportunities there.
According to Japanese, European, and U.S. data, in 2000, Japan was the largest
overseas supplier of products to China with $30.4 billion in exports. The EU was the
second largest supplier with $24.5 billion, while the United States exported only
$16.2 billion worth of merchandise to the PRC in 2000 and $19.2 billion in 2001.
Considering that the United States is the world’s largest trading nation and exported
$57 billion to Japan in 2001, its exports to China seem rather low. In 2001, the
United States exported more to South Korea ($22 billion), France ($22 billion), and
almost as much to Taiwan ($18 billion) as it did to China.
As shown in Table 1, among the top twenty U.S. exports to China in 2001, the
top five by dollar value were transport equipment, electrical machinery, office
5 U.S. International Trade Commission.

---

CRS-9
machines and automatic data processing machines, telecommunications and sound
equipment, and general industrial machinery and equipment.
Table 1. Top Twenty U.S. exports to China, 1993-2001
(Million dollars)
Category
1993 1994 1995 1996 1997 1998 1999 2000 2001
Transport Equip.
2,252 1,929 1,187 1,718 2,127 3,604 2,325 1,695 2,452
Electrical Mach.
247
285
408
553
684
931 1,252 1,502 1,842
Office Machines
213
233
306
254
324
830
697 1,154 1,207
Telecom, Sound
596
561
712
643
621
626
540
777 1,105
Recording Equip.
Gen. Indust. Equip.
427
515
712
764
756
663
675
812 1,050
Oil Seeds and Fruits
23
9
52
422
419
288
354 1,020 1,014
Metalliferous Ores
136
147
247
198
180
195
281
604
879
Special Machinery
669
670
675
685
765
519
478
744
772
Prof. & Scien. Instr.
336
276
323
327
388
451
465
563
755
Plastics
168
140
280
314
340
320
392
539
623
Power Gen. Equip.
321
282
394
462
590
512
493
301
464
Fertilizers
293
944 1,204
891 1,050 1,064
930
658
415
Hides, Furskins
13
46
100
107
112
126
96
230
402
Organic Chemicals
204
233
260
238
208
210
302
467
369
Misc. Manufactures
90
93
169
335
235
237
223
337
362
Pulp and Waste Paper
46
105
183
187
148
156
189
259
329
Paper Products
111
126
141
248
258
332
339
374
305
Chemical Materials
51
53
110
94
125
143
177
242
281
Metalworking Mach.
270
296
228
240
173
189
159
204
260
Road Vehicles
721
281
126
146
346
132
143
177
217
Note: Ranked by data for 2001.
Source: Data from U.S. Department of Commerce.

---

CRS-10
Figure 7. Top Six U.S. Imports from China by
Industry, 1992-2002
80
70
60
50
40
30
20
10
0
1992
93
94
95
96
97
98
99
2000
1
The United States is China’s largest overseas market with $100 billion in
imports from China in 2000, followed by the EU with $69.5 billion, and Japan with
$55.3 billion. China was the fourth largest source of imports for the United States
in 2000. Canada ($229 billion), Japan ($146 billion), and Mexico ($135 billion)
exported more to the United States in 2000 than did China, but China sold more to
the American market than did Germany ($58 billion), the United Kingdom ($43
billion), Taiwan ($40 billion), or South Korea ($40 billion). In short, China (with the
help of foreign investors) is a major supplier of products to the U.S. market.
According to Chinese data, the United States was the PRC’s second largest trading
partner in 2000 after Japan. Bilateral trade between China and the United States
totaled $74 billion compared with $83 billion between China and Japan.
As shown in Figure 7 and Table 2, among the top twenty U.S. imports from
China in 2001 by dollar amount, the top six were miscellaneous manufactured
articles, office machines and automatic data processing machines,
telecommunications and sound equipment, footwear, electrical machinery, and
footwear. The value for miscellaneous manufactured articles alone ($19.7 billion)
exceeded the value for all 20 of the top U.S. exports to China ($15 billion). Figure
7 shows how the top six imports from China have increased over 1992-2001. While
U.S. imports in all these categories have increased, the most dramatic percentage
changes have not been in sectors such as footwear and apparel – traditional labor-
intensive industries in which China is quite competitive – but in high technology
sectors, such as office and data processing machines (up 1,055% between 1993 and
2001), electrical machinery and appliances (up 428%), and telecommunications and
sound equipment (up 343%).

---

CRS-11
Table 2. Top Twenty U.S. Imports from China, 1993-2001
(Million dollars)
Category
1993
1994
1995
1996
1997
1998
1999
2000
2001
Misc. Manufactured Articles
7,151
8,690
10,319
11,867
14,155
15,872
17,291
19,445
19,763
Office Machines, Data Processing
932
1,583
2,879
3,562
5,019
6,329
8,239
10,980
10,763
Telecom and Sound Equip.
2,279
3,715
4,215
4,438
5,126
6,405
7,382
9,812
10,118
Footwear
4,505
5,254
5,817
6,367
7,354
8,016
8,438
9,206
9,758
Electrical Machinery, Parts, and Appliances
1,723
2,252
3,094
3,874
4,877
5,707
7,022
9,037
9,110
Apparel and Accessories
6,148
6,294
5,850
6,298
7,406
7,133
7,351
8,473
8,866
Furniture and Bedding
497
747
877
1,109
1,545
2,183
3,261
4,476
5,018
Manufactures of Metals
784
976
1,227
1,414
1,816
2,238
2,878
3,651
4,119
General Industrial Machinery
510
659
811
982
1,180
1,449
1,833
2,087
2,414
Building Fixtures/Fittings
440
617
813
1,013
1,194
1,444
2,073
2,555
2,377
Travel Goods, Handbags
1,309
1,552
1,607
1,665
1,917
1,942
1,974
2,214
2,171
Nonmetallic Mineral Manufactures
444
614
824
963
1,216
1,441
1,681
2,059
2,165
Photographic Optical Equip, Watches and Clocks
504
682
913
976
1,211
1,400
1,600
2,016
1,935
Textile Yarn, Fabrics
989
1,022
1,155
1,042
1,369
1,432
1,583
1,816
1,854
Road Vehicles
249
321
412
417
574
731
923
1,800
1,406
Professional & Scientific Instruments
204
295
390
524
634
715
837
1,025
1,177
Cork and Wood (Non-Furniture)
150
193
224
255
335
445
568
710
792
Misc. Low-Valued Items
160
167
202
232
282
425
586
759
784
Fish and Related Products
299
259
306
285
321
323
431
579
657
Paper Products
128
178
240
267
310
401
471
611
627
Iron and Steel
66
105
242
292
315
398
350
623
443
Note: Ranked by data for 2001.
Source: U.S. Department of Commerce

---

CRS-12
Balance of Trade By Sector
In modern economies, trade by sector generally follows two patterns. The first
is based on traditional comparative advantage in which one country trades with
another in those products in which it has abundant resources. The United States
economy is characterized by high technology, extensive farmland with high
agricultural yields, expensive labor, and deep capital. As such, the United States
would be expected to be strong in exports of high-technology goods, food and grains,
and capital intensive products. The Chinese economy, on the other hand, is
characterized by abundant and cheap labor, low capital intensity, and a mix of low,
medium and high technology both in manufacturing and agriculture. As such, China
would be expected to be strong in exports of labor-intensive manufactures, such as
textiles and apparel, shoes, toys, or light manufactures, but also in production of
items made under the tutelage of foreign, competitive companies that have invested
in Chinese factories. These could include household appliances, furniture, tools,
automobile parts, or electronic machinery. One would expect trade that is conducted
on the basis of comparative advantage to be unbalanced on a sector-by-sector basis.
The United States, for example, would run a surplus with China in aircraft but a
deficit in apparel.
The second trade pattern occurs among industrialized countries and is called
intra-industry or trade within industrial sectors. This is typical of trade among North
America, the European Union, and industrialized nations of Asia (e.g., Japan, South
Korea, and Taiwan). The products traded usually carry brand names, are
differentiated, and may be protected by intellectual property rights. For example, the
United States both imports and exports items such as automobiles, machinery,
electronic devices, prepared food, and pharmaceuticals. A considerable share of U.S.
intra-industry trade is carried out within a multinational corporation (e.g., between
Ford Motors and one of its related companies, such as Mazda in Japan, Jaguar in the
United Kingdom, or with other subsidiaries abroad). A large deficit in an intra-
industry trading sector in which the United States is competitive indicates that the
trading partner country may be using import barriers to tip the trade balance in its
favor.
Table 3 shows the U.S. balance of trade with China by major sector. Most of
the sectors in which the United States runs the largest trade deficits with China are,
as expected, those that depend on abundant and low-cost labor. These include toys,
sports equipment, footwear, apparel, leather bags, and textiles. Among the large
deficit sectors, however, are electrical machinery, machinery, and vehicles (indicated
by shading in the table). Some of China’s competitiveness in these sectors may be
based on its underlying economic advantages combined with foreign technology and
manufacturing processes, but in certain areas the advantage also may be based on
trade barriers. In automobiles, for example, a 2.3 liter Honda Accord sold from a
plant in the United States that retails for roughly $20,000, sells for the equivalent of
about $36,000 in China even though it is assembled at a plant there.6 Prior to China’s
accession to the WTO, tariffs on imports of automobiles exceeded 100%. They are
6 Zaun, Todd. Foreign Auto Makers Expand Production in Chinese Market. Wall Street
Journal, April 18, 2002, p. D6.

---

CRS-13
to be reduced to 25% by 2005. The tariff on large motorcycles also is slated to fall
from 60% to 45% – still relatively high.7 Moreover, in plastic, optical and medical
instruments, books and magazines, soaps and waxes, cosmetics, and cotton yarn, the
United States runs a surplus in its balance of trade with the world but a deficit with
China. These deficits run counter to market expectations.
Table 3. U.S. Balance of Trade With China by Sector, 1999-2001
(Million Dollars)
1999
2000
2001
Total China
-68,677
-83,833
-83,046
Major U.S. Deficit Sectors
Electrical Machinery
-13,081
-16,831
-16,295
Toys and Sports Equipment
-11,041
-12,354
-12,186
Footwear
-8,393
-9,142
-9,711
Machinery
-7,617
-9,911
-9,649
Furniture and Bedding
-5,485
-7,117
-7,404
Woven Apparel
-3,746
-4,164
-4,126
Leather Art; saddlery; bags
-3,003
-3,827
-3,897
Plastic
-1,947
-2,194
-2,381
Knit Apparel
-2,023
-2,032
-2,273
Iron/steel Products
-1,302
-1,800
-2,020
Optical, medical Instruments
-1,499
-1,994
-1,511
Vehicles, Not Railway
-856
-1,759
-1,299
Misc. Textile Articles
-963
-1,097
-1,200
Misc. Art of Base Metal
-715
-836
-963
Artificial Flowers, Feathers
-869
-927
-958
Tools, cutlery, of Base Metals
-738
-878
-939
Ceramic Products
-762
-869
-864
Miscellaneous Manufactures
-751
-740
-841
Precious Stones, Metals
-491
-669
-803
Books, Newspapers, Manuscripts
-203
-325
-377
Soap, Wax, Polish, Dental Preps, etc.
-122
-140
-133
Perfumery, Cosmetics, etc.
-74
-86
-132
Cotton & Yarn Fabric
-174
-132
-101
7 U.S. Trade Representative. 2002 National Trade Estimate Report on Foreign Trade
Barriers. Washington, U.S. Government Printing Office. P. 46.

---

CRS-14
1999
2000
2001
Major U.S. Surplus Sectors
Aircraft, Spacecraft
2,290
1,658
2,389
Misc. Grain, Seed, Fruit
299
968
964
Hides and Skins
127
270
434
Fertilizers
931
607
398
Wood pulp, Etc.
195
274
330
Iron and Steel
-83
-122
265
Copper and Articles Thereof
-31
140
142
Note: Shaded categories are those in which the United States runs a trade surplus with the world but
a trade deficit with China. Classification is by Harmonized System tariff codes at the 2-digit level.
Source: Data from U.S. Department of Commerce
The sectors in which the United States runs a trade surplus with China mirror
U.S. competitive advantages and include aircraft and agricultural products. In two
sectors, a deficit in U.S. trade with China has turned into a surplus. Edible fruit and
nuts went from a $30 billion deficit in 1999 to a surplus of $7 billion in 2001.
Likewise, Miscellaneous food went from a deficit of $17 billion to a surplus of $23
billion.
U.S. Imports From China by Selected Sectors
This section presents charts and data on U.S. imports from China by selected
industrial sectors. The charts show imports from China as compared with imports
from other major exporting countries or groups of countries. These include the
European Union, the Association of Southeast Asian Nations (ASEAN, which
includes, Indonesia, Malaysia, Singapore, Thailand, the Philippines, Brunei,
Vietnam, Laos, and Myanmar [Burma]), Taiwan, Mexico, South Korea, Japan, Hong
Kong, and Canada. Even though granting permanent normal trade relations status
to China and China’s accession to the WTO will not change materially the
accessibility of Chinese exports to the U.S. market, U.S. industries competing with
imports from China (such as apparel and textiles) have opposed increasing trade with
the PRC partly for fear of losing U.S. jobs to imports. This has been a particular
concern of labor organizations.
The data in this section are presented according to two-digit standard
international trade classification (SITC) codes as reported by the U.S. Department of
Commerce. The industries selected are those in which the share of imports from
China has risen to a significant level or industries in which trade policy has played
a significant role (e.g. iron and steel or automobiles), even though U.S. imports from
China in those industries might be small.

---

CRS-15
Iron and Steel
In iron and steel products, China is not a major exporter – either to the United
States or to the world. In 2001, China accounted for only 3.1% of U.S. imports of
iron and steel.
Figure 8. U.S. Imports of Iron and Steel Products (SITC 67)
by Country and Group, 1990-2001
20
15
Rest of
World
10
EU15
ASEAN
Taiwan
Mexico
5
S. Korea
Japan
China
3.1%
Canada
0
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 4. U.S. Imports of Iron and Steel Products (SITC 67) from
Selected Countries and Country Groups, 1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
1,504
2,708
2,761
2,607
2,803
2,437
China
71
315
398
350
623
439
Hong Kong
2
1
1
3
2
2
Japan
2,097
1,694
3,063
1,563
1,320
1,213
Korea
574
650
1,206
944
1,019
815
Mexico
357
1,301
1,244
1,202
1,267
1,021
Taiwan
154
249
329
449
649
346
ASEAN
65
130
273
262
389
193
EU15
3,303
4,376
4,372
3,714
4,379
3,672
Rest of World
1,691
4,571
5,403
4,005
5,293
3,720
World
9,818
15,995
19,050
15,100
17,744
13,858

---

CRS-16
Office Machines and Computers
In U.S. imports of office machines and automatic data processing machines
(computers), China is becoming a major supplier – accounting for 14% of U.S.
imports of such products in 2001. These imports rose from $117 million in 1990 to
$10.7 billion in 2001. China appears to be gaining market share partly at the expense
of Japan. The other supplier whose market share is becoming dominant is ASEAN.
Imports from ASEAN rose from $5.1 billion in 1990 to $20.6 billion in 2001.
Figure 9. U.S. Imports of Office Machines and
Automatic Data Processing Machines (SITC 75) by
Country and Group, 1990-2001
100
80
Rest of
World
EU15
60
ASEAN
Taiwan
40
Mexico
S. Korea
20
Japan
China
14%
0
Canada
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 5. U.S. Imports of Office Machines and Automatic Data
Processing Machines (SITC 75) from Selected Countries and
Country Groups, 1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
1,893
3,649
3,701
3,269
3,778
2,942
China
117
5,019
6,329
8,239
10,980
10,761
Hong Kong
809
541
404
303
345
276
Japan
11,007
17,803
15,640
15,648
15,878
11,055
Korea
1,347
4,186
3,449
5,527
7,831
4,657
Mexico
706
4,637
5,483
7,169
9,058
10,377
Taiwan
3,084
9,875
9,560
9,641
10,592
8,751
ASEAN
5,150
21,967
23,956
24,723
24,475
20,674
EU15
2,461
6,127
6,231
6,373
6,156
4,673
Rest of World
297
1,181
1,824
3,451
3,041
1,695
World
26,871
74,985
76,577
84,343
92,134
75,861
Source: U.S. Department of Commerce

---

CRS-17
Telecommunications and Sound Equipment
In U.S. imports of telecommunications and sound equipment, China’s share has
risen to 16%. Such imports from China rose from $1.1 billion in 1990 to $10 billion
in 2001. Imports of these products from Canada, Mexico, South Korea, and ASEAN
have also been rising. Those from Japan, however, have risen relatively little.
Figure 10. U.S. Imports of Telecommunications and
Sound Equipment (SITC 76) by Country and Group,
1990-2001
80
70
Rest of
World
60
EU15
ASEAN
50
Taiwan
40
Mexico
30
S. Korea
20
Japan
China
10
16%
Canada
0
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 5. U.S. Imports of Telecommunications and Sound
Equipment (SITC 76) from Selected Countries and Country
Groups, 1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
972
3,066
3,434
5,164
9,846
4,533
China
1,142
5,126
6,405
7,382
9,812
10,062
Hong Kong
478
221
249
171
262
224
Japan
9,061
7,127
7,991
9,789
11,429
8,577
Korea
1,632
1,037
1,569
2,896
4,729
6,001
Mexico
2,302
7,722
9,526
11,886
16,073
15,765
Taiwan
1,426
1,590
1,926
2,238
2,986
2,361
ASEAN
3,122
6,876
6,364
6,972
8,779
8,619
EU15
890
1,620
1,759
2,536
3,860
3,990
Rest of World
322
1,224
1,257
1,363
2,118
2,689
World
21,347
35,609
40,480
50,397
69,894
62,821
Source: U.S. Department of Commerce

---

CRS-18
Electrical Machinery and Parts
U.S. imports of electrical machinery and parts have been growing dramatically
from nearly all major supplier countries. At 10% of such imports in 2001, China is
becoming a significant supplier – surpassing Canada, Taiwan, and South Korea.
Other major suppliers are the European Union, Japan, ASEAN, and Mexico.
Figure 11. U.S. Imports of Electrical Machinery/Parts (SITC 77) by
Country and Group, 1990-2001
120
100
Rest of
80
World
EU15
ASEAN
60
Taiwan
Mexico
40
S. Korea
Japan
20
H.Kong
China
10%
Canada
0
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 6. U.S. Imports of Electrical Machinery and Parts
(SITC 77) from Selected Countries and Country Groups,
1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
3,323
5,503
5,768
5,833
6,499
5,871
China
652
4,877
5,707
7,022
9,037
9,047
Hong Kong
792
1,920
1,770
1,747
1,782
1,050
Japan
8,658
15,452
13,650
14,665
18,096
11,941
Korea
2,504
7,092
6,422
8,087
9,327
5,194
Mexico
4,406
12,474
13,506
15,290
17,828
16,290
Taiwan
2,180
5,750
5,438
6,370
8,492
5,878
ASEAN
4,644
14,998
14,249
15,783
20,295
13,755
EU15
4,898
9,223
9,640
10,162
11,922
11,139
Rest of World
1,080
2,395
2,707
3,056
4,988
4,545
World
33,137
79,684
78,857
88,015
108,266
84,710
Source: U.S. Department of Commerce

---

CRS-19
Road Motor Vehicles
In U.S. imports of road motor vehicles, China is an insignificant player. Most
of the imports come from Canada, Japan, the European Union, and Mexico. Imports
from China in this sector have primarily been motorcycles and motor vehicle parts.
Figure 12. U.S. Imports of Road Vehicles (SITC 78) by Country
and Group, 1990-2001
200
Rest of
150
World
EU15
Mexico
100
S. Korea
Japan
China
50
0.9%
Canada
0
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 7. U.S. Imports of Road Motor Vehicles (SITC 78) from
Selected Countries and Country Groups, 1990, 1992-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
26,094
43,849
45,823
56,266
55,703
50,477
China
59
574
731
923
1,800
1,404
Hong Kong
7
11
10
12
30
14
Japan
29,839
32,930
34,102
38,825
42,917
41,429
Korea
1,275
2,102
1,912
3,287
5,222
6,778
Mexico
4,084
15,566
16,750
19,963
25,991
26,246
Taiwan
871
987
1,083
1,168
1,335
1,124
ASEAN
88
184
207
262
249
247
EU15
12,270
17,914
21,824
26,092
27,176
27,680
Rest of World
930
1,392
1,429
1,711
2,205
2,009
World
75,517
115,509
123,871
148,509
162,628
157,408
Source: U.S. Department of Commerce

---

CRS-20
Building Fixtures/Lighting
In U.S. imports of prefabricated buildings, sanitary, plumbing, heating and
lighting fixtures and fittings, China has surged to become a major player. It
accounted for nearly half such imports in 2001, although total imports of such
products amounted to only $4.9 billion, of which $2.4 billion came from China.
Figure 13. U.S. Imports of Prefab Buildings, Sanitary,
Plumbing, Heating, and Lighting Fixtures/Fittings (SITC
81) by Country and Group, 1990-2001
6
5
Rest of
World
EU15
ASEAN
4
Taiwan
Mexico
Japan
3
H Kong
2
China
48%
1
Canada
0
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 8. U.S. Imports of Prefabricated Buildings; Sanitary,
Plumbing, Heating and Lighting Fixtures and Fittings (SITC 81)
from Selected Countries and Country Groups, 1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
80
337
406
481
544
572
China
94
1,194
1,444
2,073
2,555
2,383
Hong Kong
47
41
48
65
94
70
Japan
28
43
48
62
63
59
Korea
61
44
23
29
26
32
Mexico
117
463
558
642
819
903
Taiwan
495
274
262
261
235
156
ASEAN
27
82
88
126
132
116
EU15
205
296
317
360
384
333
Rest of World
78
173
194
228
255
271
World
1,232
2,946
3,388
4,327
5,107
4,895
Source: U.S. Department of Commerce

---

CRS-21
Furniture
In U.S. imports of furniture and parts, China is becoming a major supplier. It
accounted for 27% of such imports amounting to $5 billion in 2001. This exceeded
the $3.2 billion of such imports from Mexico and the $4.4 billion from Canada.
Figure 14. U.S. Imports of Furniture and Parts (SITC 82)
by Country and Group, 1990-2001
20
Rest of
World
EU15
15
ASEAN
Taiwan
Mexico
10
China
27%
5
Canada
0
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 9. U.S. Imports of Furniture and Parts (SITC 82) from
Selected Countries and Country Groups, 1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
1,209
3,449
4,014
4,337
4,859
4,411
China
145
1,545
2,183
3,261
4,476
5,017
Hong Kong
29
52
69
75
84
98
Japan
162
94
122
145
141
141
Korea
67
48
65
76
85
75
Mexico
578
1,915
2,317
2,885
3,201
3,212
Taiwan
1,009
924
967
1,009
1,031
765
ASEAN
331
1,098
1,204
1,436
1,593
1,492
EU15
1,174
1,491
1,798
2,209
2,473
2,314
Rest of World
299
522
586
742
980
1,086
World
5,003
11,137
13,325
16,175
18,923
18,611
Source: U.S. Department of Commerce

---

CRS-22
Travel Goods, Handbags
In travel goods, handbags, and similar items, China again has become a major
supplier, although total U.S. imports of such products amounted to only $4.3 billion
in 2001. Of this, China accounted for 51% or $2.2 billion. ASEAN also is becoming
a major source of such products.
Figure 15. U.S. Imports of Travel Goods, Handbags, and
Similar Products (SITC 83) by Country and Group, 1990-2001
5
Rest of
4
World
EU15
3
ASEAN
Taiwan
Mexico
S. Korea
2
H.Kong
China
1
51%
0
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 10. U.S. Imports of Travel Goods, Handbags, (SITC 83)
from Selected Countries and Country Groups, 1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
17
34
34
38
42
39
China
692
1,917
1,942
1,974
2,214
2,211
Hong Kong
50
53
48
47
59
46
Japan
9
5
5
7
7
7
Korea
446
177
160
168
143
106
Mexico
46
131
154
161
145
104
Taiwan
406
184
176
149
138
129
ASEAN
114
495
633
726
811
836
EU15
270
439
387
406
430
492
Rest of World
121
344
383
417
412
330
World
2,171
3,779
3,922
4,093
4,401
4,300
Source: U.S. Department of Commerce

---

CRS-23
Apparel and Clothing
In U.S. imports of articles of apparel and clothing accessories, the market share
from China is rising, but in 2001, it accounted for only 13% of all such U.S. imports
or $8.8 billion. Mexico and ASEAN export a similar amount to the United States.
The largest increase in import share has come from the “rest of the world.”
Figure 16. U.S. Imports of Apparel and Clothing Accessories
(SITC 84) by Country and Group, 1990-2001
70
60
Rest of
World
50
40
EU15
ASEAN
30
Taiwan
Mexico
20
S. Korea
H.Kong
10
China
13%
0
Canada
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
Table 11. U.S. Imports of Apparel and Clothing Accessories
(SITC 84) from Selected Countries and Country Groups,
1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
247
1,343
1,555
1,735
1,911
1,764
China
3,422
7,406
7,133
7,351
8,473
8,852
Hong Kong
3,974
4,027
4,493
4,341
4,571
4,282
Japan
158
93
86
93
109
170
Korea
3,244
1,654
2,037
2,256
2,461
2,354
Mexico
709
5,349
6,811
7,845
8,730
8,127
Taiwan
2,475
2,164
2,223
2,076
2,160
1,907
ASEAN
3,404
6,593
7,544
7,949
9,354
9,595
EU15
1,790
2,234
2,437
2,379
2,540
2,599
Rest of World
5,891
17,424
19,345
20,351
23,872
24,211
World
25,314
48,287
53,664
56,376
64,181
63,861
Source: U.S. Department of Commerce

---

CRS-24
Footwear
Imports of footwear into the United States from China leaped upward during the
1990s. From $1.5 billion in 1990, they rose to $9.7 billion in 2001 or 64% of all
such imports. China has largely replaced South Korea and Taiwan as a major source
of footwear imports, and imports of such products continue to grow.
Table 12. U.S. Imports of Footwear (SITC 85) from Selected
Countries and Country Groups, 1990, 1997-2001
(Million dollars)
Figure 17. U.S. Imports of Footwear (SITC 85) by
Country and Group, 1990-2001
16
Rest of
14
World
12
EU15
ASEAN
10
Mexico
8
6
Taiwan
China
4
S. Korea
64%
2
0
90
91
92
93
94
95
96
97
98
99
2000
1
Source: U.S. Department of Commerce
1990
1997
1998
1999
2000
2001
Canada
53
117
100
89
76
78
China
1,475
7,354
8,016
8,438
9,206
9,766
Hong Kong
109
99
62
58
67
81
Japan
5
3
2
2
2
2
Korea
2,558
235
181
162
140
103
Mexico
165
384
349
354
351
311
Taiwan
1,528
183
144
111
92
75
ASEAN
579
1,675
1,291
1,246
1,207
1,185
EU15
1,523
2,087
2,047
2,038
2,044
1,950
Rest of World
1,543
1,814
1,687
1,576
1,671
1,684
World
9,538
13,951
13,879
14,074
14,856
15,235
Source: U.S. Department of Commerce

---

CRS-25
Professional, Scientific, and Controlling Instruments
In U.S. imports of professional, scientific and controlling instruments and
apparatus, China is only a minor supplier with 5.4% and $1.1 billion of such imports
in 2001. Most originate in the European Union, Mexico, and Japan.
Figure 18. U.S. Imports of Professional, Scientific, and
Controlling Instruments (SITC 87) by Country and Group,
1990-2001
25
Rest of
20
World
EU15
15
ASEAN
Taiwan
10
Mexico
5
Japan
China
5.4%
Canada
0
90
91
92
93
94
95
96
97
98
99
2000
Source: U.S. Department of Commerce
Table 13. U.S. Imports of Professional, Scientific and
Controlling Instruments and Apparatus (SITC 87) from Selected
Countries and Country Groups, 1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
527
1,173
1,222
1,443
2,167
1,793
China
74
634
715
837
1,025
1,172
Hong Kong
82
79
88
73
87
55
Japan
1,494
2,613
2,684
3,085
4,075
3,561
Korea
89
98
113
116
152
152
Mexico
513
2,253
2,716
3,082
3,665
3,895
Taiwan
176
283
341
344
434
372
ASEAN
152
558
715
769
860
1,029
EU15
2,310
4,569
5,030
5,870
6,980
7,050
Rest of World
604
1,408
1,709
1,857
2,177
2,320
World
6,021
13,668
15,333
17,476
21,622
21,399
Source: U.S. Department of Commerce

---

CRS-26
Photographic/Optical Equipment, Watches/Clocks
In U.S. imports of photographic apparatus, equipment and supplies and optical
goods as well as watches and clocks, China is a significantly rising supplier. In 2001,
China accounted for 15% of U.S. imports of such products or $1.9 billion. Japan
($3.8 billion) and the European Union ($2.4 billion) still dominate imports.
Figure 19. U.S. Imports of Photographic
Equipment/Supplies, Optical Goods, and
Watches/Clocks (SITC 88) by
Country and Group, 1990-2001
16
14
Rest of
World
12
EU15
10
ASEAN
Taiwan
8
Mexico
6
Japan
4
H Kong
2
China
15%
0
Canada
90
91
92
93
94
95
96
97
98
99
2000
Source: U.S. Department of Commerce
Table 14. U.S. Imports of Photographic Apparatus, Equipment
and Supplies and Optical Goods; Watches and Clocks (SITC 88)
from Selected Countries and Country Groups, 1990, 1997-2001
(Million dollars)
1990
1997
1998
1999
2000
2001
Canada
180
467
572
663
904
545
China
191
1,211
1,400
1,600
2,016
1,908
Hong Kong
526
418
389
408
378
236
Japan
2,668
3,776
3,648
3,919
4,450
3,848
Korea
127
191
203
190
179
168
Mexico
128
260
467
620
802
648
Taiwan
334
360
375
361
342
282
ASEAN
199
738
763
737
745
650
EU15
1,619
2,437
2,355
2,363
2,868
2,453
Rest of World
574
1,064
1,295
1,509
1,626
1,506
World
6,546
10,922
11,467
12,370
14,310
12,244
Source: U.S. Department of Commerce

---

CRS-27
Foreign Direct Investment in China
Foreign direct investment (FDI) is directed toward investments in companies in
which the foreign investor has a controlling interest. It is primarily for physical plant
and equipment and for the costs of establishing enterprises in China. It is not for
portfolio investment on China’s stock exchanges. As shown in Table 15, China
relies heavily upon FDI from Hong Kong and Taiwan. Some of the FDI registered
as originating in Hong Kong actually comes from Taiwan. Also, a significant
amount of investment from Hong Kong and Macao is actually investment by
mainland Chinese companies via subsidiaries in Hong Kong and Macao. Mainland
subsidiaries in Hong Kong and Macao can take advantage of investment incentives
for foreign companies on the PRC mainland. In addition, many foreign firms,
including U.S. companies, are registered in the Virgin Islands for tax purposes. The
industrial sectors in China that have received the most FDI have been manufacturing
and real estate. In 2000, U.S. utilized (spent) FDI in China totaled $4.4 billion.
China’s accession to the WTO would likely result in higher levels of investment
from other countries. China’s concessions in order to bring its economy into line
with WTO requirements include allowing more foreign investment in industries, such
as telecommunications, financial services, and transportation.
Table 15. China’s Utilized Foreign Direct Investment Inflows,
Top Ten Foreign Investors, 1998-2000
(Billion dollars)
Foreign Direct Investment
Country or Region
1998
1999
2000
Hong Kong
18.51
16.36
15.50
United States
3.90
4.22
4.38
Virgin Islands
4.03
2.66
3.84
Japan
3.40
2.97
2.91
Taiwan
2.92
2.60
2.29
Singapore
3.40
2.64
2.17
South Korea
1.80
1.27
1.49
United Kingdom
1.18
1.04
1.16
Germany
0.74
1.37
1.04
France
.90
.88
.85
All Sources
45.46
40.40
40.71
Note: These figures refer to yearly rather than cumulative amounts.
Sources: U.S. Department of State. FY 2000 Country Commercial Guide – China; U.S. Department
of State. FY 2001 Country Commercial Guide – China; Stat China [http://www.statchina.com];
China. Ministry of Foreign Trade and Economic Cooperation; Japan External Trade Organization.
JETRO White Paper on Foreign Direct Investment, 1999. See [http://www.jetro.go.jp].

---

CRS-28
Appendix
Table A1. China’s Merchandise Trade with the World and with the United States, 1980-2001
(Million dollars)
China’s Trade with the World
U.S. Trade with China
China’s Trade with U.S.
(Chinese data)
(U.S. data)
(Chinese data)
Year
China
China
China
U.S.
U.S.
U.S.
China
China
China
Exports
Imports
Balance
Exports
Imports
Balance
Exports
Imports
Balance
1980
18,139
19,505
-1,366
3,755
1,164
2,591
983
3,830
-2,847
1981
21,476
21,631
-155
3,603
2,062
1,541
1,505
4,682
-3,177
1982
21,865
18,920
2,945
2,912
2,502
410
1,765
4,305
-2,540
1983
22,096
21,313
783
2,173
2,477
-304
1,713
2,753
-1,040
1984
24,824
25,953
-1,129
3,004
3,381
-377
2,313
3,837
-1,524
1985
27,329
42,534
-15,205
3,856
4,224
-368
2,336
5,199
-2,863
1986
31,367
43,247
-11,880
3,106
5,241
-2,135
2,633
4,718
-2,085
1987
39,464
43,222
-3,758
3,497
6,910
-3,413
3,030
4,836
-1,806
1988
47,663
55,352
-7,689
5,017
9,261
-4,244
3,399
6,633
-3,234
1989
52,916
59,131
-6,215
5,807
12,901
-7,094
4,414
7,864
-3,450
1990
62,876
53,915
8,961
4,807
16,296
-11,489
5,314
6,591
-1,277
1991
71,940
63,855
8,085
6,287
20,305
-14,018
6,198
8,010
-1,812
1992
85,492
81,843
3,649
7,470
27,413
-19,943
8,599
8,903
-304
1993
91,611
103,552
-11,941
8,767
31,183
-22,416
16,976
10,633
6,343
1994
120,822
115,629
5,193
9,287
41,362
-32,075
21,421
13,977
7,444
1995
148,892
132,063
16,829
11,749
48,521
-36,772
24,744
16,123
8,621
1996
151,093
138,949
12,144
11,978
54,409
-42,431
26,731
16,179
10,552
1997
182,917
142,163
40,754
12,805
65,832
-53,027
32,744
16,290
16,454
1998
183,744
140,385
43,359
14,258
75,109
-60,851
38,001
16,997
21,004
1999
194,932
165,717
29,215
13,118
81,786
-68,668
41,946
19,480
22,466
2000
249,212
225,097
24,115
16,253
100,063
-83,810
52,104
22,363
29,741
2001
N/A
N/A
N/A
19,234
102,280
-83,046
26,200
54,300
28,100
Sources: U.S. Department of Commerce; China. Ministry of Foreign Trade and Economic Cooperation; PRC General Administration of Customs.

---

CRS-29
Table A2. China’s Merchandise Trade With the European Union,
1980-2000
(Million dollars)
EU Trade with China
China’s Trade with the EU
(EU data)
(Chinese Data)
Year
EU
EU
EU
China
China
China
Exports
Imports
Balance
Exports
Imports
Balance
1980
2,478
2,753
-275
2,363
2,814
-451
1981
2,216
2,682
-466
2,502
2,714
-212
1982
2,105
2,437
-332
2,168
2,178
-10
1983
2,573
2,485
88
2,508
3,390
-882
1984
2,929
2,639
290
2,232
3,323
-1,091
1985
5,484
2,971
2,513
2,283
6,157
-3,874
1986
6,403
4,106
2,297
4,017
7,757
-3,740
1987
6,430
5,945
485
3,916
7,274
-3,358
1988
6,772
7,719
-947
4,746
8,176
-3,430
1989
7,360
9,877
-2,517
5,114
9,785
-4,671
1990
7,373
13,289
-5,916
6,275
9,147
-2,872
1991
7,719
18,160
-10,441
7,127
9,297
-2,170
1992
9,604
20,995
-11,391
8,004
10,863
-2,859
1993
14,301
23,730
-9,429
12,258
15,739
-3,481
1994
16,246
27,644
-11,398
15,418
18,604
-3,186
1995
19,327
32,333
-13,006
19,258
21,313
-2,055
1996
18,387
35,197
-16,810
19,868
19,883
-15
1997
18,445
39,364
-20,919
23,865
19,205
4,660
1998
20,270
44,010
-23,740
28,148
20,715
7,433
1999
20,448
52,252
-31,806
30,207
25,463
4,744
2000
24,545
69,490
-44,945
38,193
30,845
7,348
Note: From 1980-88, data are for the 12 nations of the European Economic Community and after 1988
for the 15 nations of the EU (addition of Austria, Finland, and Sweden). EU data for 2000 are
estimates based upon data for 11 months.
Sources: (1980-1998) International Monetary Fund. Direction of Trade Statistics Yearbook, 1999;
(1999) European Union Delegation of the European Commission, Eurostat; China. Ministry of
Foreign Trade and Economic Cooperation; PRC General Administration of Customs.

---

CRS-30
Table A3. China’s Merchandise Trade With Japan, 1980-2000
(Million dollars)
Japan’s Trade with China
China’s Trade with Japan
(Japanese Data)
(Chinese Data)
Year
Japan
Japan
Japan
China
China
China
Exports
Imports
Balance
Exports
Imports
Balance
1980
5,109
4,346
763
4,032
5,169
-1,137
1981
5,076
5,283
-207
4,747
6,183
-1,436
1982
3,500
5,338
-1,838
4,806
3,902
904
1983
4,918
5,089
-171
4,517
5,495
-978
1984
7,199
5,943
1,256
5,155
8,057
-2,902
1985
12,590
6,534
6,056
6,091
15,178
-9,087
1986
9,936
5,727
4,209
5,079
12,463
-7,384
1987
8,337
7,478
859
6,392
10,087
-3,695
1988
9,486
9,861
-375
8,046
11,062
-3,016
1989
8,477
11,083
-2,606
8,395
10,534
-2,139
1990
6,145
12,057
-5,912
9,210
7,656
1,554
1991
8,605
14,248
-5,643
10,252
10,032
220
1992
11,967
16,972
-5,005
11,699
13,686
-1,987
1993
17,353
20,651
-3,298
15,782
23,303
-7,521
1994
18,687
27,569
-8,882
21,490
26,319
-4,829
1995
21,934
35,922
-13,988
28,466
29,007
-541
1996
21,827
40,405
-18,578
30,888
29,190
1,698
1997
21,692
41,827
-20,135
31,820
28,990
2,830
1998
20,182
37,079
-16,897
29,718
28,307
1,411
1999
23,450
43,070
-19,620
32,400
33,768
-1,368
2000
30,440
55,340
-24,900
41,654
41,512
142
Sources: International Monetary Fund. Direction of Trade Statistics Yearbook, 1999; International
Monetary Fund. Direction of Trade Statistics Quarterly, June 2000; Japan External Trade
Organization (JETRO); China. Ministry of Foreign Trade and Economic Cooperation; PRC General
Administration of Customs.

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CRS-31
Table A4. Major Country Merchandise Exports to China,
Imports from China, and Trade Balances with China, 1999, 2000
(Billion dollars)
Trading Partner Data Chinese
Data
Partner
1999
2000
1999
2000
Exp
Imp Bal
Exp
Imp
Bal
Ex.
Imp
Bal
Exp
Imp
Bal
U.S.
13.1
81.8 -68.7
16.3 100.1
-83.8
19.5 41.9 -22.4
22.4 52.1 -29.7
Japan
23.4
43.0 -19.6
30.4
55.3
-24.9
31.5 34.0
-2.5
41.5
41.6
-0.1
EU
20.4
52.3 -31.8
24.5
69.5
-45.0
22.4 30.2
-7.8
30.8
38.1
-7.3
Hong Kong
57.6
77.9 -20.3
69.9
92.4
-22.5
6.9 36.9 -30.0
9.4
44.5 -35.1
Taiwan
21.3
4.5
16.8
26.1
6.2
19.9
19.5
3.9
15.6
25.5
5.0
20.5
Germany
7.4
14.5
-7.1
8.5
16.8
-8.3
8.3
7.8
0.5
10.4
9.3
1.1
S. Korea
15.0
8.2
6.8
17.7
11.1
6.6
17.2
7.8
9.4
23.2
11.3
11.9
Singapore
3.9
5.7
-1.8
5.2
7.0
-1.8
4.1
4.5
-0.4
5.0
5.8
-0.8
U.K.
1.9
5.7
-3.8
2.3
6.7
-4.4
3.0
4.9
-1.9
3.6
6.3
-2.7
France
3.4
6.8
-3.4
3.1
7.5
-4.4
1.0
5.4
-4.4
3.9
3.7
0.2
Sources: International Monetary Fund. Direction of Trade Statistics Quarterly, June 2000 and June
2001; U.S. Department of Commerce; China. Ministry of Foreign Trade and Economic Cooperation;
PRC General Administration of Customs; Taiwan. Board of Foreign Trade; EU. European Union
Delegation of the European Commission, Eurostat; Japan. Ministry of International Trade and
Industry.

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CRS-32
Table A5. U.S. Merchandise Trade Balances with Selected Asian Developing Nations, 1980-2001
(Million dollars)
Year
China
Indonesia
S. Korea
Malaysia
Philippines
Taiwan
Thailand
1980
2,593
-4,114
-17
-1,400
64
-3,146
221
1981
1,540
-5,149
-465
-807
-404
-4,453
3
1982
410
-2,565
-677
-248
-121
-5,434
-95
1983
-305
-4,212
-1,953
-529
-370
-7,714
-131
1984
-377
-4,674
-4,188
-9983
-913
-11,266
-381
1985
-373
-4,152
-4,992
-936
-959
-13,295
-804
1986
-2,135
-2,757
-7,588
-807
-805
-16,069
-1,018
1987
-3,422
-2,955
-10,326
-1,159
-898
-19,221
-904
1988
-4,237
-2,438
-10,578
-1,715
-1,069
-14,314
-1,739
1989
-7,094
-2,618
-7,115
-2,052
-1,102
-14,305
-2,343
1990
-11,488
-1,785
-4,888
-2,071
-1,151
-12,347
-2,597
1991
-14,018
-1,675
-2,224
-2,446
-1,439
-11,038
-2,693
1992
-19,943
-1,927
-2,732
-4,144
-1,870
-10,601
-3,944
1993
-24,927
-3,117
-3,003
-4,858
-1,646
-10,050
-5,214
1994
-32,076
-4,209
-2,346
-7,454
-2,137
-10,864
-5,938
1995
-36,772
-4,599
523
-9,162
-2,070
-10,863
-5,452
1996
-42,431
-4,778
3,286
-9,809
-2,372
-12,610
-4,587
1997
-53,026
-5,222
1,269
-7,695
-3,370
-13,331
-5,699
1998
-56,927
-7,042
-7,456
-10,043
-5,211
-14,960
-8,198
1999
-68,668
-7,575
-8,308
-12,349
-5,153
-16,077
-9,340
2000
-83,810
-7,839
-12,398
-14,573
-5,147
-16,134
-9,747
2001
-83,045
-7,605
-12,988
-12,956
-3,666
-15,239
-8,733
Source: U.S. Department of Commerce

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