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Wednesday, April 23, 2003

China Overtakes UK to Become World No5 Trading Nation

No real surprises here, although it's nice to watch the milestones as we go rolling past.

The outlook for world trade this year is clouded by uncertainty, and growth is unlikely to be any stronger than last year's modest recovery, the World Trade Organisation said on Wednesday. Merchandise trade volumes grew 2.5 per cent last year, after falling 1 per cent in 2001, thanks to robust import demand in North America, China, other Asian developing countries and the transition economies of central and eastern Europe.The value of China’s merchandise exports and imports increased by more than 20 per cent last year, when the country overtook Britain to become the world’s fifth largest trading nation. The value of India’s exports also grew at double-digit rates.Import volumes shrank slightly in western Europe and rose weakly in Japan, reflecting slow economic growth. They fell sharply in Latin America because of economic crises that severely reduced inflows of foreign direct investment into the region.

A third of last year’s growth in world trade was accounted for by a 3 per cent rise in the volume of US merchandise imports, fuelled by strong consumer demand. However, the expansion tailed off in the final quarter, reflecting weak capital investment.Despite the depreciation of the US dollar, North America’s merchandise exports fell almost 4 per cent. The WTO blamed the drop on lower demand abroad, particularly in western Europe and Japan, and on an apparent loss of US export competitiveness. Overall, merchandise trade volumes in developing Asia grew 12.5 per cent. However, Japan’s merchandise imports rose only 1.6 per cent, and its exports 8 per cent. Although the value of western Europe’s exports rose 5.5 per cent and imports by 3.5 per cent in US dollar terms, the WTO said the apparent growth was entirely due to the dollar’s depreciation. In volume terms, exports rose 0.6 per cent and imports fell 0.5 per cent.
Source: Financial Times

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