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For the first time ever, China has edged ahead of Germany as the world’s largest exporter. “Total 2009 exports were more than $1.2 trillion…ahead of the 816 billion euros ($1.17 trillion) forecast for Germany…” (The Associated Press).
Low-cost manufacturing, a huge labor force and purchasing power has helped catapult China into rapid economic growth. Chinese auto sales surpassed United States’ totals in 2009.
In addition, nearly 100 million Chinese have Internet access and 300 million have cellphone subscriptions—more than any other nation.
Although Chinese gross exports overtook those of Germany, “China sells low-tech goods such as shoes, toys and furniture, while Germany exports machinery and other higher-value products. German commentators note their country supplies the factory equipment used by top Chinese manufacturers” (ibid.).
Imports also grew 55.9 percent in December alone. This included more than 5 million barrels of oil per day. Aluminum and steel were also up sharply.
China has been rapidly buying up raw materials around the world while global prices are low.
While some believe China is spending its way to global dominance with government stimulus packages, others fear the nation cannot sustain its rapid growth—especially with the current economic downturn. The World Economic Forum (WEF) annual report stated, “Many countries are at risk of overextending unsustainable levels of debt” (Guardian).
Daniel Hoffman of Zurich Financial Services, a contributor to the WEF report, said he was particularly concerned that China’s economy is on a “very unbalanced growth trajectory.” He said that “despite the fact that China appears to have navigated the financial crisis and global recession, much of the domestic impulses derive from high credit growth, which entails an increased risk of misallocation of capital and renewed bubbles in financial asset prices and real estate” (ibid.).