Dragon Year Welcomes Boom Time For Economy
China does a lot of manufacturing for foreign companies, including U.S. companies. The raw materials are shipped to China, where factory workers build the final products and ship them back to the U.S. In this way, a lot of China"s exports are really for American companies for American consumers. China primarily exports electrical and other types of machinery, especially computers and data processing equipment, as well as optical and medical equipment. It also exports apparel, fabric and textiles. It imports raw commodities from Latin America and Africa, such as oil and other fuels, metal ores, plastics and organic chemicals. China"s economy produced $10.9 trillion in 2010, (based on purchasing power parity), making it the third largest in the world"s (after the U.S. and the European Union). It"s been growing more than 10% per year for the last 30 years. China exports $1.58 trillion of its production, making it the world"s second largest exporter after the EU. China ships 18% of its exports to the U.S., which created a $272 billion trade deficit in 2011. While China needs the U.S., it"s increasing its trade with Hong Kong (13.8%) and Japan (7.6%). It"s encouraging trade with African nations, investing in their infrastructure in return for oil. Finally, China is increasing trade agreements with other Southeast Asian nations, and with many Latin American countries. As of November 2011, China owned $1.132 trillion in U.S. Treasury bills, bonds and notes. This is 23.8% of the total $4.8 trillion of debt held by the public. China has cut back a bit, from its peak holdings of $1.173 trillion held in July 2011. Nevertheless, China is the largest foreign holder of Treasuries. China does this to support the value of the dollar. China pegs its currency (the yuan) lower than the U.S. dollar to keep its export prices competitive.(Source: U.S. Treasury, Major Foreign Holders) China"s role as America"s largest banker gives it leverage. For example, China threatens to sell part of its holdings whenever the U.S. pressures it to raise the yuan"s value. China counters by saying it did raise the yuan"s value by 20% between 2005-2010. However, this year China manufacturing industry also has good trend. Taking mining machinery industry as an example, with the development of building construction, railway construction and water conservancy construction, the sales amounts of dryer machine, ore beneficiation and stone crushing plant are getting higher and higher.
by: HXJQ OF CHINA