The return of China to the world stage is one of the most significant changes to the international political economy in the last forty years.
This Great Graphic is from Amazing_Maps. It shows in red those countries for which China is the largest trading partner. China is the second largest trading partner for the countries in orange. Countries in yellow are where China is the third or lower bilateral trading partner. Too recent for this map, China has become New Zealand’s largest trading partner.
It appears, however, that the data behind the map is gross trade flows. As we have noted, the value-added actually done in China is rather modest. After all, China still imports parts and semi-finished goods and exports the final product, which is always of a higher value than the imports themselves. China also imports raw materials. The rise in commodity prices relative to manufactured goods prices–that same terms of trade shock that was positive for Australia, Canada, and many emerging markets–was negative for China. The scale of its operations, the positive demographic dividend and rising productivity helped China overcome the negative terms of trade shock.
This piece is cross-posted from Marc to Market with permission.