The rise to dominance of China, in economic terms, is based on the strength of its exports to the rest of the world. Indeed, China has long been criticized for failing to develop its own national demand to begin to match its economic superpower status, and, of course, in doing so open up its vast internal market to the rest of the world. It has been suggested that China will switch to tap domestic demand as a means to secure sustainable economic growth into the future, but it must remain questionable as to how the relatively poor, vast population of China will sustain this (away from major cities and their industries).
In March, China’s exports to the rest of the world faltered badly. They had been projected to show an increase of 8% as world demand slowly picks up, but in the event fell by 14.6% over where they were in March 2014. Imports also dipped by 12.3% but despite this, the March trade surplus came in at $2.9 billion. That level of surplus (with the rest of the world) is the smallest figure for 13 months. The fact that China can post trade surpluses despite anaemic global trade across much of 2014 could be said to underline the imbalance of trade between China and the rest of the world. The fact that 2014 saw the weakest level of economic growth that the nation has seen for 25 years, but still managed to grow at a rate of 7.4% also raises the eyebrows who believe that global trade should be more equitable.
Another thorn in the side of those seeking more balanced trade with China is the value of its currency, the Yuan. Americans, in particular, believe that the currency is being kept artificially low, but fight shy of calling the Chinese currency manipulators as that could trigger economic sanctions on China. Over the course of 2014, the Yuan depreciated by 2.6% against the Dollar, but the Dollar rose by 15% against the Yen; 11.7% against the Euro and by 6.5% against Sterling.
