{"id":9498,"date":"2022-02-18T07:30:52","date_gmt":"2022-02-18T07:30:52","guid":{"rendered":"https:\/\/focus.cbbc.org\/?p=9498"},"modified":"2025-04-23T09:44:25","modified_gmt":"2025-04-23T09:44:25","slug":"why-do-more-than-50-of-british-imports-go-to-beijing-and-shanghai","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/why-do-more-than-50-of-british-imports-go-to-beijing-and-shanghai\/","title":{"rendered":"Why do more than 50% of British imports go to Beijing and Shanghai?"},"content":{"rendered":"

In 2021, China recorded a historical trade surplus of \u00a3500 billion. But trade balances vary across regions, with trade surpluses and minuses highly concentrated in a few provinces, writes Torsten Weller<\/span><\/h2>\n

China has long been seen as the \u2018workshop of the world.\u2019 This \u2018moniker\u2019 has become even more justified during the Covid-19 pandemic, when most developed economies in the West shut down during lengthy lockdowns. Factory closures in other export-oriented economies like Vietnam and Bangladesh and increased spending by Western consumers have pushed Chinese exports to record levels. Last year, the country recorded a trade surplus of around USD US$ 676.4 (\u00a3500 billion), the highest China \u2013 and possibly any country \u2013 has ever reached, ever.\u00a0<\/span><\/span><\/p>\n

Soaring trade also helped foreign investors and multinationals (MNCs). Foreign-invested enterprises (FIEs) accounted for one third of Chinese exports last year and increased their aggregate export value by 23.3% year-on-year. Most importantly, British exports to China also grew 29% in 2021, according to Chinese customs data.\u00a0<\/span><\/span><\/p>\n

That said, although China\u2019s national account numbers look impressive and are good news for foreign businesses, regional statistics reveal a more complex picture. In fact, China\u2019s external trade remains highly concentrated in only a few provinces which account for the majority of both exports and imports. The high concentration of Chinese export industries \u2013 although not unusual \u2013 raises questions nonetheless over whether a rebalancing, as envisaged by Beijing\u2019s \u2018Dual Circulation Strategy\u2019, can easily be implemented.\u00a0<\/span><\/span><\/p>\n

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Background\u00a0<\/span><\/span><\/h4>\n

China\u2019s economy has always been characterised by stark geographical differences, with Southeastern coastal provinces and Tier-One cities outperforming landlocked Western areas. Trade data reflects this divergence, although in a nonlinear way. Yes, wealthier provinces maintained larger trade surpluses in 2021 than poorer ones, but the wealthiest cities \u2013 Beijing and Shanghai \u2013 also ran the largest trade deficits with an accumulated minus of nearly USD400 billion.\u00a0<\/span><\/span><\/p>\n

On the surplus side, four provinces \u2013 Zhejiang, Guangdong, Shandong and Jiangsu \u2013 accounted for over 73% of China\u2019s trade surplus alone, exporting together US$ 808.5 billion more than they imported from abroad. For comparison, Japan\u2019s goods export in 2020 were only US$ 641.3 billion, over 20% less than the trade surplus of these four Chinese regions.\u00a0<\/span><\/span><\/p>\n

Looking at historical data, it also becomes clear that this gap is getting bigger. Over the last ten years, trade surpluses in the three export hubs Guangdong, Jiangsu, Zhejiang and Shandong have continued to increase, whereas deficits in Shanghai and Beijing have widened. The remaining 25 Mainland provinces, on the other hand, kept their trade balance relatively stable. The accumulated trade surplus of these regions increased by only US$ 6.5 billion between 2010 and 2021.<\/span><\/p>\n

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Who benefits from Chinese Exports?\u00a0<\/span><\/span><\/h4>\n

Although a growing number of foreign companies are now manufacturing in China for Chinese customers, exports remain an important source of revenue for MNCs. According to data from Chinese customs, exports of foreign-invested enterprises (FIE) in China had a value of USD1.2 trillion in 2021, up 23.3% from 2020. For comparison, China-based FIEs exported nearly twice as many goods as Japan in 2020 and almost as much as Germany, the world\u2019s third-largest goods exporter.\u00a0<\/span><\/span><\/p>\n

Although the overall share of FIEs in Chinese exports has declined from 46% in 2018 to 33% in 2021, foreign investment still benefited from the country\u2019s export boom. Exports from foreign-invested companies outpaced overall export growth in 14 out of 31 provinces. Only in three regions \u2013 Qinghai, Heilongjiang and Xinjiang \u2013 did exports from foreign-invested businesses decline.<\/span><\/p>\n