During the 1989-91 slowdown, demand for
imports fell below that of
exports, and China's external trade has since remained in surplus (except in
1993), resulting in the accumulation of a
mountain of foreign exchange reserves.
In 2008, total two-way trade was valued at
US$2,561.6 billion, an
increase of 17.8% year on year. Merchandise exports rose 17.2% to
US$1,428.6 billion while imports increased more
rapidly, by 18.5%, to
reach US$1,133.1 billion, leaving a trade surplus of US$295.5
billion, 12.7% higher than in 2007.
The global
economic crisis then hit China hard. In the first nine months of
2009, the trade surplus fell by 26%
 year-on-year to US$135.5
billion as exports plunged by 21.3% to US$846.7 billion and
imports dropped less rapidly, by 20.4%, to reach US$711.2
billion.
The Chinese
government has taken strong measures to restore export growth,
including re-pegging the Chinese yuan to the US dollar. With the
US currency falling against other major world currencies, this
has given China a competitive advantage, but the problem now is
that the US consumer, on whom Chinese exporters have come to
depend, has neither the resources or the inclination to resume
massive spending.
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