EU replaces US as China's biggest trading partner

EU replaces US as China's biggest trading partner
(Xinhua)
Updated: 2006-09-15 10:16

The EU replaced the United States as China's biggest trading partner last year, said Xu Kuangding, Chairman of the China Federation of Industrial Economics (CFIE) on Thursday.

As one of the keynote speakers at the opening of a Sino-European economic summit, Xu said Sino-European trade, with a volume of 217.3 billion U.S. dollars, has exceeded the Sino-U.S. trade volume by some 5.7 billion dollars.

China Daily

This news has more or less gone unnoticed by many, including me. For a very long time the US had been China's biggest trade partner. Times seems to have changed now.

Most people will probably not see how dangerous this fact actually is. China is strategically trying to become less dependent on the US as main trade parter, fewer dependency means more global power for China and in the long term it's taking over the US position as superpower. Especially since China carries a large percentage of the US debt burden, which allows them to basically make or break the US.
If the situation continues to develop as it currently does, the role of US as important player will become much weaker in a very short period of time.

In addition, as I explained in another thread, China is peacefully taking over rich countries of Africa (in terms of fossil reserves). Examples are Zimbabwe, Nigeria (a country with one of the largest crude oil reserves in the world), and Angola. In contrast to Western companies/countries China is able to win the hearts and minds of African people, which is very dangerous.

Shortly, China will be the only country having its economy backed up by a steady supply of cheap resources, not being solely dependent of Middle East supplies.
ATS Thread: ''Every time I visits my native Zimbabwe, there seem to be more Chinese.''


Apparently, China is also successfully securing uranium resources.

2.6 Uranium

Africa is relatively well endowed with uranium (see TABLE 2.7), having a long history of producing it as a by-product of gold production in South Africa (the uranium being simply left in the tailings in the early years). The largest quantity of reserves recoverable at less than $130/kg lies in South Africa (mainly in association with gold), followed by Namibia and then Niger (see MAP 13).

World Energy Org

Guess what articles I found:

President Hu calls for closer China-Namibia ties
(Xinhua)
Updated: 2005-12-20 09:08

Chinese President Hu Jintao put forward four suggestions for ushering in a new era of China-Namibia relations during talks with Namibian President Hifikepunye Pohamba in Beijing Monday afternoon.

Hu said relations between China and Namibia have entered a new stage of development. The two countries should continue to maintain multi-level exchanges between high-ranking officials, parliaments, political parties and governmental departments so as to reinforce and develop a sound political relationship.


China Daily

The list of China's power in African countries is growing and growing. I find it personally very strange that this subject has yet not been covered in the mainstream media, and in particular the danger of it for Western countries.


Edit: MOD, please move this thread. My apologies for putting it in the wrong section

[edit on 30-9-2006 by Mdv2]

Opps, never mind it is just that fat lady getting ready to sing.

good work Mdv2......again.

This ties in our other arguement about the dollare going down.
One of the biggest arguements I hear in response as to why China doesnt bury our economy is: "we are their biggest importer and consumers.. it would hurt them as much as it would hurt us"... which to me has been crap arguement from the start.
If the US fell the world would eagerly pick up our slack as #1 consumers. And there would probably be leftovers.

China is mkaking its plans and they are covering their asses from the almost certain US economic collapse that is slowly beggining to unfold.

I have been saying for fifteen years to not underestimate China.. and I was always laughed at. Too bad I cant laugh back because this time I really hate being right...

Excellent find, MDV2. I have been watching what is going on in China for awhile now, but not in depth. This to me, is something of a no brainer. I mean, couldn't our govt figure out that all China had to do was form alliances and trade agreements with other countries? I've known for quite awhile that China would find a way to trump the U.S. by doing something like this, it was only a matter of time. I don't think it will be long before the whole U.S. house of cards falls. It's getting very scary and the more things like this happen, the more our govt tries to keep it from the U.S. citizens. The raping of America continues...

I'm not really sure what the significance of this is, other than Europeans are starting to like cheap crap from China just as much as Americans.

Originally posted by Mdv2
Most people will probably not see how dangerous this fact actually is. China is strategically trying to become less dependent on the US as main trade parter, fewer dependency means more global power for China and in the long term it's taking over the US position as superpower.

Dependency? In what way was China dependent on the US in the first place? Trade is a two way street my friend. If I were the Chinese I'd be much more worried about dependence on ever shrinking quantities of oil then on trade with the US or EU.

Originally posted by Mdv2Especially since China carries a large percentage of the US debt burden, which allows them to basically make or break the US.

A basic lesson in macro economics would do you wonders. China is gobbling up US debt because it devalues their currency in relation to the dollar. Thus making their products cheap and affordable to American consumers. If China quits buying Americans will do the same. Not out of spite but out of simple economics.

Originally posted by Mdv2
If the situation continues to develop as it currently does, the role of US as important player will become much weaker in a very short period of time.

Inevitably the US will not hold the title of "lone" superpower for eternity. In economic terms we haven't been the lone superpower for 30yrs. However if your speaking in military terms I think you can look forward to US dominance for at least a decade to come.

Originally posted by Mdv2
In addition, as I explained in another thread, China is peacefully taking over rich countries of Africa (in terms of fossil reserves). Examples are Zimbabwe, Nigeria (a country with one of the largest crude oil reserves in the world), and Angola. In contrast to Western companies/countries

There is definately less historic baggage between Africa and China than African and the west. Which China is using to its advantage not to mention their no questions asked policy.

Oiriginally posted by Mdv2China is able to win the hearts and minds of African people

Or just the greedy despots that won't have to worry about questions concerning their record on human rights when they want investment.

Originally poste by Mdv2
which is very dangerous.

Quite right. But undoubtedly whatever the consequences they will inevitably fall on the general populace rather than the ones it should

Originally posted by Mdv2
Shortly, China will be the only country having its economy backed up by a steady supply of cheap resources, not being solely dependent of Middle East supplies.

A steady supply yes but cheap probably not. Commodity prices have soared mainly because of China's massive economic expansion which could actually threaten its sustainability.

Originally posted by Mdvv2
The list of China's power in African countries is growing and growing. I find it personally very strange that this subject has yet not been covered in the mainstream media, and in particular the danger of it for Western countries.

I would advise that you check out the economist and foreign affairs publications they've covered the subject a number of times.

Originally posted by Mdv2
EU replaces US as China's biggest trading partner

Thought this was already a given, in other words, already a well known factoid?
Oops, it is:

The EU replaced the United States as China's biggest trading partner last year, said Xu Kuangding, Chairman of the China Federation of Industrial Economics (CFIE) on Thursday.

My how slow news travels these days.
Shame China Daily is just getting around to finding out....

[edit on 30-9-2006 by Seekerof]

Originally posted by Mdv2Nigeria (a country with one of the largest crude oil reserves in the world)

I wouldn't say Nigeria has one of the largest, it certainly has some quanity of oil, but no where near Canada, Venezuela, Russia, Iran, Iraq, Saudi Arabia, UAE, former USSR states etc. Plus i believe Nigeria like much of Africa is still a trouble spot and would mean risky investment. Although i concede that because of that risk, with very low investment and therefore little competition, China may take advantage. But it's likely that China will get its oil from other countries like Iran, Russia and perhaps Venezuela.

This is crap. This statement is obviously false. The total US-China trade in 2005 was 285 billions$ that's app. 70billion more. From this Chinese exports to US are 243 billions$. Also EU-China has lower trade deficit meaning the trade with EU is less advantageous for Chinese, although the deficit is still quite substantial.

see this link.

That said, I think it's extremely stupid that US didn't introduce tarrifs against Chinese imports. It is always worrisome when your most potential adversary grows at your expense. They are doing the same thing Japanesse did in 70ties and 80ties - they are siphooning US economy. The problem is China is not an key anti communism ally like Japan was and there's really no reason to allow them continue with this. What did US gain from China? Nothing. No real help in international relations (against Iran for example) no real economic benefit. Introduce 50% tarrifs at least, before it's too late.
And that thing about positive impact of Chinese cheap goods is crap. There was much less imports form PRC in 90ties but the US economy was better.
The prices are not down, only the corporations have bigger profit margins.

[edit on 30-9-2006 by longbow]

Even US has dealings with China goods.

It seems that the war on terror has taken away the attention that our nation use to give to other countries.

It was a time when US took care of South America now the nations are looking to countries like China for business.

Now China is taking advantage of the situation in Africa.

Well when the things start to roll down remember that a nation like ours can not keep its supremacy in the world while forgetting the littler and poorer nations.

Because they will turn somewhere else for support.

China is just becoming business ready to pick up on the ones left behind.

Originally posted by danwild6

In what way was China dependent on the US in the first place? Trade is a two way street my friend. If I were the Chinese I'd be much more worried about dependence on ever shrinking quantities of oil then on trade with the US or EU.

A collapse of the US economy would mean that China loses all of its Western customers at once. Chinese export numbers would decrease enormously and therefore slow down China's current economic growth. In response to your second suggestion, as I stated, China is already securing its long term supplies of crude oil, in contrast to 'us' Westerners; in the end a Country as China might have access to enormous supplies of crude oil, but in anyway they will have to pay its oil bills. Where does that money come from? Exactly. From their customers of cheap Chinese products. It's all linked to each other.

Originally posted by danwild6

A basic lesson in macro economics would do you wonders. China is gobbling up US debt because it devalues their currency in relation to the dollar. Thus making their products cheap and affordable to American consumers. If China quits buying Americans will do the same. Not out of spite but out of simple economics.

Did I ever say China would benefit of discontinuing buying US debts? No I did not, nor does it matter. If the US can't afford to keep paying its bills China will basically be forced to stop buying US T-bills and find other trading partners. I am non native English business student and have a pretty long time to go before graduating, yet you really don't have to teach me any basics of macro economics. You might want to have a look at other threads of mine, such as Bill Gates: The Ol' Dollar, it's gonna go down, in which I have tried to cover the scenario you stated.

Originally posted by danwild6
Inevitably the US will not hold the title of "lone" superpower for eternity. military terms I think you can look forward to US dominance for at least a decade to come.

A superpower is defined as a country being superior in both military and economic terms. Take the former Soviet Union as example. Their communist system did not work, yet they were able to keep it running and in addition, financing their strong military, then the Union collapsed. What happened? Their commanders started to lose power and the financial resources to back up its military, resulting in a situation of an old fashioned army, which would not even have been able to defend the Russian borders against enemy threats for a very long time.

Banks, politicians, professors and others expect the US economy to collapse in a maximum period of 10 years, so yes you could be right. But it's likely to happen sooner than later. Don't be surprised to see it happen in a period of three to five years time, especially due to the current Administration.

Supporting resources.
US comptroller general David Walker: A 'fiscal hurricane' on the horizon
Federal Report by Professor Kotlikoff, ex advisor of Reagan: Is the US bankrupt? (PDF)
US House of Representatives member Ron Paul: The End of Dollar Hegemony

Originally posted by danwild6
Or just the greedy despots that won't have to worry about questions concerning their record on human rights when they want investment.

Of course, after all, which rising super power would care more about others than about itself? Though in order to get long term access to oil reserves and other resources they ensure locals to be able to buy cheap Chinese electronics, having access to housing etc. Another example is the destroyed rail road in oil rich Angola.

A mural in the Art Deco headquarters of Angola's Benguela Railway shows Africa's colonial rail network in fading tones of sepia and black. During Portuguese rule the line led 1,304km east from the coast to the mines of the interior, today Zambia and the Democratic Republic of Congo.

Completed by British engineers in 1929, Benguela Railway was bombed and dynamited beyond use during Angola's civil war. Today its longest working stretch ends 150km east of the coast, in the town of Cubal.

Passengers ride in or on the roofs of open boxcars on a four-times-daily shuttle between Benguela and Lobito, a coastal city nearby.

Now the railway is due for an overhaul costing $300m to $500m, financed by a new foreign partner: China.

Three tidy fenced tent camps housing Chinese workers have already sprung up in the muddy fields alongside the line.

Originally posted by danwild6
Quite right. But undoubtedly whatever the consequences they will inevitably fall on the general populace rather than the ones it should

Image what threat an alliance between oil rich (African and Arabian) on one side and Russia an China on the other side could pose to Europe and Western countries in general.

Originally posted by danwild6
Shortly, China will be the only country having its economy backed up by a steady supply of cheap resources, not being solely dependent of Middle East supplies.

A steady supply yes but cheap probably not.

Cheap, yes. China has the skills to make cheap African laborers work, a thing which Western powers were never able to accomplish. It's often been described as Africans being lazy. The Chinese don't pay those laborers a lot, yet enough to meet first necessities of life. In exchange for aiding current governments, investing in economies and supporting the locals, they are granted access to relatively cheap supplies of raw materials, resources and crude oil they need. Compare it to the US oil for food program.

Originally posted by Flyboy211

I wouldn't say Nigeria has one of the largest.But it's likely that China will get its oil from other countries like Iran, Russia and perhaps Venezuela.

LUANDA, 17 Apr 2006 (IRIN) - The announcement earlier this month that Angola had overtaken Saudi Arabia as China's premier supplier of crude oil has underlined the deepening ties between the two red-hot economies.

Angola is sub-Saharan Africa's second largest oil producer, after Nigeria, pumping 1.3 million barrels a day (b/d) – a figure the government expects to rise to 2 million b/d by 2008.

Source

Originally posted by longbow
This is crap. This statement is obviously false. The total US-China trade in 2005 was 285 billions$ that's app. 70billion more. From this Chinese exports to US are 243 billions$. Also EU-China has lower trade deficit meaning the trade with EU is less advantageous for Chinese, although the deficit is still quite substantial.[/url].

That said, I think it's extremely stupid that US didn't introduce tarrifs against Chinese imports.

The EU is China's biggest trading partner, while China was the EU's second most important partner in 2004 after the United States.

Herald Tribune

It is true, the EU replaced the US in 2005. Besides, I see no reason for China to publicize false figures. Ask yourself the following question: What would China do if the US applied tariffs against Chinese products? Two reason they don't stop buying US T-bills are because of the cheap exports to the US and because they invested huge amounts of money in T-bills. Should China decide to stop buying, the US economy would immediately collapse and their invest gone up in smoke.




[edit on 3-10-2006 by Mdv2]

Well dosent the EU have like 500 million people, while the US has 300?

Originally posted by Mdv2
A collapse of the US economy would mean that China loses all of its Western customers at once. Chinese export numbers would decrease enormously and therefore slow down China's current economic growth.

Well we're not China's only western economic partner. But we are a major one and quite possibly the most important at least regarding consumption of Chinese
products. But I'd think it could be much worse than just a slow down. As China has boomed it has built up its huge production capacity to meet domestic and foreign demand. However if demand dries up what is China going to do with all this production capacity? Can you say economic deflation, depression.

Originally posted by Mdv2
In response to your second suggestion, as I stated, China is already securing its long term supplies of crude oil, in contrast to 'us' Westerners; in the end a Country as China might have access to enormous supplies of crude oil, but in anyway they will have to pay its oil bills. Where does that money come from? Exactly. From their customers of cheap Chinese products. It's all linked to each other.

Oil regardless of how much China will be able to secure is China's achilles heel. Chinese demand has sent oil prices soaring. Quite simply oil production can't keep pace with demand(inparticular chinese). Maximum oil production capacity today is I believe 87m bol per day. The US consumes around 20m/day China is already the second largest consumer at over 7m/day and will surpass the US as the largest oil consumer around 2025. And of course that not even mentioning India. Being tied to oil isn't a good way to build prosperity. The US was at its most prosperous when it produced the bulk of the oil it consumed but as our production whaned and we became dependent on foreign sources around the late 60's early 70's American economic prosperity also began to faulter. Quite simply oil is the fuel of the past not the future. China's commitment to long term oil exploration doesn't bode well for their future economic future IMO.

Originally posted by Mdv2
Did I ever say China would benefit of discontinuing buying US debts? No I did not, nor does it matter. If the US can't afford to keep paying its bills China will basically be forced to stop buying US T-bills and find other trading partners. I am non native English business student and have a pretty long time to go before graduating, yet you really don't have to teach me any basics of macro economics. You might want to have a look at other threads of mine, such as Bill Gates: The Ol' Dollar, it's gonna go down, in which I have tried to cover the scenario you stated.

I gotcha can the US countinue to support the debt its building abroad I believe it can mainly because the expansion of the trade gap has slowed and has been revised downward for next year. The US budget deficit has declined for the past several years. I see no evidence that the US economy is near breaking point. In fact as US interest rates have risen our assets have become even more desirable.

Originally posted by Mdv2
A superpower is defined as a country being superior in both military and economic terms. Take the former Soviet Union as example. Their communist system did not work, yet they were able to keep it running and in addition, financing their strong military, then the Union collapsed. What happened? Their commanders started to lose power and the financial resources to back up its military, resulting in a situation of an old fashioned army, which would not even have been able to defend the Russian borders against enemy threats for a very long time.

Absolutely the USSR and its empire was held together by the threat of force pure and simple. However the US isn't. The American people are prosperous and relatively happy. If we weren't I assure you we will let our government know. Can we sustain this prosperity again I see no evidence that we can't.

[ui]Originally posted by Mdv2
Banks, politicians, professors and others expect the US economy to collapse in a maximum period of 10 years, so yes you could be right. But it's likely to happen sooner than later. Don't be surprised to see it happen in a period of three to five years time, especially due to the current Administration.

And I'm sure they all have their reasons but I've been hearing of America's eminent demise for years and we're still hear.

Originally posted by Mdv2
Image what threat an alliance between oil rich (African and Arabian) on one side and Russia an China on the other side could pose to Europe and Western countries in general.

danwild6 peers into his crystal ball I see the US and the EU work together to develop new technologies freeing mankind from wasteful and polluting forms of energy building prosperity that could have only been dreamed of a generation ago.

Originally posted by Mdv2
Cheap, yes. China has the skills to make cheap African laborers work, a thing which Western powers were never able to accomplish. It's often been described as Africans being lazy. The Chinese don't pay those laborers a lot, yet enough to meet first necessities of life. In exchange for aiding current governments, investing in economies and supporting the locals, they are granted access to relatively cheap supplies of raw materials, resources and crude oil they need. Compare it to the US oil for food program.

If they have a deal to provide oil below market price maybe but I think that as the price for oil climbs China is going to have to face high oil prices.

I just heard on BBC that Zambia is having second thoughts about its dealings with China.

*I'll look for a link

Found a few links.

Zambian roits

China flexes muscles in Africa

So its hardly hugs and kisses all around for the Chinese.