China will displace U.S. as top exporter by 2025, HSBC warns

The Miami HeraldOctober 12, 2011 

An HSBC forecast released Tuesday projects U.S. trade will rise by $4.4 trillion, up more than 62 percent, over the next 15 years, even as the U.S. share of the world market shrinks.

The inaugural Trade Connections forecast by the London-based banking and financial group predicts that the U.S. share of the world market will fall from 11.3 percent (2010) to 9 percent by 2025, and that China’s share of world trade will reach 13 percent by then to overtake the United States as the world’s top exporting nation.

In the short-term, U.S. traders are jittery. The latest HSBC Trade Confidence Index, which also was released Tuesday, found that only 49 percent of U.S. respondents expected a slight or significant increase in trade volumes over the next six months. That was a 13 percent drop from the response in the first half of the year and the lowest confidence level among U.S. traders since the survey was first conducted in 2009.

Forty-nine percent of U.S. businesses surveyed also felt the world economy would decline over the next six months, considerably more than the 30 percent who thought so during a survey conducted in February and March.

The surveys were released at a “Doing Business in Latin America’’ conference that HSBC organized at the Biltmore Hotel in Coral Gables on Tuesday as well as at an HSBC Trade Summit in Hamburg, Germany.

One of the few bright spots for American traders was Latin America, according to the trade confidence survey. Twenty-seven percent said it represented the best opportunity for business growth in the next six months. That placed it just ahead of China (26 percent) as the best prospect.

The surveys come at a time when the U.S. Congress is considering a bill that would punish countries with artificially low currencies, allowing the imposition of additional duties on products from nations that subsidize exports by undervaluing their currencies.

China began allowing its yuan to trade within a narrow daily band in 2005 and since then it has appreciated by more than 20 percent against the dollar, but critics say it is still undervalued, making Chinese exports cheaper.

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