Industrialised Nations Dominate Exports in Several Key Sectors

The upturn in international trade in 2010 benefited all zones. Unsurprisingly, Asia (excluding Japan) was the zone that recorded the strongest growth in international trade between 2007 and 2010, thanks to China’s robust recovery. At the same time, the weight of European exports in world trade diminished, while that of the United States and of Japan grew slightly, says Euler Hermes.


According to the credit insurance company, the recovery in international trade has been global but with differences depending on the sector. In the agri-food and pharmaceutical sectors, trade has risen to above the 2010 level whereas the automobile sector is still far below it. “Also, China was not the only country to benefit from the upturn: Brazil has gained considerable ground in agri-food, and South Korea in the automobile sector. Several industrialised countries continue to be the leaders in the automobile, chemicals, pharmaceuticals and capital goods sectors,” points out Wilfried Verstraete, Chairman of the Euler Hermes Group Management Board. “Of course, the challenge now facing these countries is to hold on to their share of the export market. They can achieve this only by improving their technological edge, which means investing substantially in research and development.”


World exports of agricultural and agri-food products increased by more than 20% in value between 2007 and 2010, reaching US&1,100 billion.


Brazil recorded spectacular growth in agri-food exports, particularly to China. Although imports also increased in response to strong domestic demand, Brazil enjoys a comfortable trade surplus in this sector.


China – a huge importer – has an increasingly negative trade balance in this sector, which is likely to increase the upward pressure on world agricultural commodity prices.


Technology Goods: Asia Consolidates its Domination


Exports of Technology goods totalled US$1,200 billion in 2010, 6% more than in 2007.


China confirmed its supremacy with 27% of global exports, followed by Hong Kong (10%). These two countries also recorded the strongest growth in their respective shares of the export market from 2007 to 2010.


South Korea’s technology exports now exceed those of Japan.


Although it has lost ground, Germany continues to be the largest European technology exporter but with a negative trade balance nonetheless.


Industrialised Countries Still Leaders in Chemicals


World chemical exports totalled US$1,170 billion in 2010, 3% more than in 2007.


The United States and Germany continue to be the largest exporters with market shares of respectively 11% and 10%, bearing in mind that oil-producing countries control a significant part of the basic chemicals segment.


China, whose exports have grown by a substantial 30%, is still a long way from meeting its own needs. Its large trade deficit in this sector shows that it is not currently one of the major players in the global chemicals industry.


Capital Goods: China’s Trade Balance is Beginning to Even Out


World trade in capital goods in 2010 returned to a level similar to that of 2007 (around US$1,300 billion) in value terms.


In terms of exports, Germany is still the world leader, ahead of the United States – which has not yet returned to its 2007 level – and Japan. China, South Korea and Japan recorded the strongest growth in exports from 2007 to 2010, boosted by the economic stimulus measures in 2009-2010. China’s performance in terms of exports to emerging zones makes it an increasingly serious competitor for the European countries and for the United States.

Automobile: Germany Widens its Lead Over Japan


World automobile exports totalled US$1,000 billion in 2010, down by 16% compared with 2007.


Germany consolidated its leadership with 22% (USD 215 billion) of world automobile exports in 2010. In value terms, Germany’s exports are double those of Japan and four times those of France.


South Korea recorded a strong rebound, with exports up by nearly 30% compared with 2007.


The fall in Japanese exports is directly linked to the slump in the US market, which in the past four years has dropped from 17 million vehicles sold to 11.5 million.


At close to 120%, the growth in Chinese imports may look spectacular but at 4%, China’s share of world imports remains very small despite the fact that it became the world’s largest automobile market in 2010.


Specialisation and Dependence on Sectors Differ Depending on the Country


Euler Hermes says the German and Japanese economies are very similar. In both cases, the weight of the automobile and capital goods sectors dominate in their exports.


The technology trade seems to be one of the most global. Accounting for a large part of Chinese exports, technology goods figure at the top of the list of imports for most of the major countries, particularly the United States.


Although both are automobile manufacturing countries, the United States and France are importers in the sector. The United States’ dependence on imports is attributable to the decline in domestic production in the face of competition from Japanese manufacturers. France’s dependence is the result of relocating the production of bottom-of-the-range cars to low-cost countries.


China is hugely dependent on imports in the chemicals sector and, increasingly so, in the agri-food sector.


“Our sector-by-sector analysis shows that rather than upsetting world trade balances, the crisis has in fact strengthened the existing positions,” says Karine Berger, Euler Hermes’ Head of Market Management and Strategic Marketing and Chief Economist.


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