Is China Really the Issue?

The WSJ details:

China's monthly trade surplus narrowed to its lowest level in five months in September, official data showed Wednesday, as commodity imports staged an unexpected rebound and export growth continued to slow.

Even after declining to $16.88 billion in September from $20.03 billion in August, China's trade surplus is still substantial, and the latest data aren't likely to substantially alleviate friction between China and its major trading partners. Last month, the U.S. House of Representatives passed a bill that would penalize China for its exchange rate policy, and on Tuesday, U.S. Treasury Secretary Timothy Geithner said the U.S. wants to make sure the yuan appreciates "at a gradual but still significant rate."

China's exports grew 25.1% from a year earlier in September, down from August's 34.4% expansion, data from the General Administration of Customs showed on Wednesday. Imports rose 24.1% from a year earlier, down from August's 35.5% increase. Economists had expected exports to rise by 26.0% and imports to rise by 25.0%.

Now for the contrarian view... A simple Q&A:

• Are Chinese exports significantly higher than their imports? Yes
• Do China's imports (commodities) consist of items exported from the U.S.? No

Both of which cause political issues for China from the U.S. BUT, in looking at overall levels of imports relative to that of the U.S., China imports MUCH more than I would have guessed and has become an increasingly large global player in a VERY short time.

Source: Haver