China’s Economy Grows, and Its Trade Gap With the U.S. Widens

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But something else is going on: China is depending more on itself.

China was once famous for assembling goods made from parts that had been bought elsewhere. A smartphone that is made in China, for example, might have a screen from Japan, memory chips from South Korea and a main processor from the United States. In fact, those parts and components long accounted for a sizable chunk of what China bought from the United States.

Today, China can do all that entirely within its own borders, making everything from advanced electronic components to car parts and assembling the final product.

“In the last 10 years, you’ve seen China become considerably more developed and sophisticated in terms of its own supply chains,” said Gordon Styles, the founder and president of Star Rapid, a company in Zhongshan, China, that does rapid prototypes and low-volume test manufacturing runs for everything from auto parts to medical equipment.

“It is now easier than it ever was before to produce the entire product here,” he said.

Follow the Chain

Global automakers and other multinational companies have moved much of their supply chains to China to avoid Chinese tariffs, tap the country’s vast work force and move closer to a big new market.

Brad Setser, a Council on Foreign Relations economist, calculated that imports of manufactured goods from the United States are becoming steadily less important to the Chinese economy. He estimated that China now produces within its borders up to four-fifths of the value of each dollar of exports. That share had been as little as two-thirds in 2011.

Nadim Ahmad, the head of the trade and competitiveness statistics division at the O.E.C.D., said that China has been expanding in areas like research, design and development that had previously been done overseas. “You’re basically creating a lot more in the economy” as goods are manufactured, he said.

That means China gets more bang from its buck from its exports to the United States — and suggests American tariffs could be more painful than trade’s shrinking share of the economy suggests.

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