I am sometimes amazed by the lack of understanding in mainstream media of simple trade figures. "China 'overtakes' Germany to become largest exporter," trumpets the Independent. Ditto says the BBC and the Telegraph. Enter suchlike search terms and you'll find similar news results. Supposedly, we are to stand overawed by China's $1.2 trillion in exports. Call me pedantic and picayune--I take issue with characterizations of the Stability and Growth Pact, for instance--but you should expect a higher standard of correspondence here. The problem with these headlines is that, er, Germany wasn't even the world's largest exporter prior to 2009, so overtaking it doesn't necessarily make China the world's leader.
In the modern economy, there are these certain tradeables called "services" that are not as tangible as goods. For starters, think of accountancy, advertising, architecture, software programming, tourism and travel. (The WTO identifies four modes of supply in services trade.) While the release of the December trade figures by Chinese statistical authorities indicate that the PRC will almost certainly surpass Germany as the world's largest goods exporter, this will not become official until their German counterparts release their full 2009 year data sometime in February. Both countries' exports fell last year, but Germany's fell at a faster rate than China's.
Far more importantly, however, economic activity in industrialized economies is typically dominated by services. Take the United States: over a third of economic activity there is in private sector services. Some of this dominance spills into the export arena. Even if the United States didn't export a buck's worth of anything in December, the January-to-November 2009 tally of goods and services is already at $1.41 trillion, putting the US comfortably ahead of China and Germany as the world's largest exporter (that $500B-some worth of annual service exports comes in handy here as far as US bragging rights are concerned). Just as Germany merely overtook the US as the top goods exporting nation, so is China overtaking Germany. Remember, countries export goods and services. Don't be similarly fixated with outdated notions of exports.
I suppose a headline of the United States retaining its lead as the world's top exporting nation for the umpteenth year isn't news, but it's the accurate one nonetheless.
In the modern economy, there are these certain tradeables called "services" that are not as tangible as goods. For starters, think of accountancy, advertising, architecture, software programming, tourism and travel. (The WTO identifies four modes of supply in services trade.) While the release of the December trade figures by Chinese statistical authorities indicate that the PRC will almost certainly surpass Germany as the world's largest goods exporter, this will not become official until their German counterparts release their full 2009 year data sometime in February. Both countries' exports fell last year, but Germany's fell at a faster rate than China's.Far more importantly, however, economic activity in industrialized economies is typically dominated by services. Take the United States: over a third of economic activity there is in private sector services. Some of this dominance spills into the export arena. Even if the United States didn't export a buck's worth of anything in December, the January-to-November 2009 tally of goods and services is already at $1.41 trillion, putting the US comfortably ahead of China and Germany as the world's largest exporter (that $500B-some worth of annual service exports comes in handy here as far as US bragging rights are concerned). Just as Germany merely overtook the US as the top goods exporting nation, so is China overtaking Germany. Remember, countries export goods and services. Don't be similarly fixated with outdated notions of exports.
I suppose a headline of the United States retaining its lead as the world's top exporting nation for the umpteenth year isn't news, but it's the accurate one nonetheless.
