American exports are expected to rise faster than imports over the next five years, with exports to China expected to grow at an annual rate of 7.1% according to an HSBC Bank forecast. Imports from China are expected to grow at a rate of 4.3%.
Many cities and states are seeing exports grow at a much faster rate. As more regions recognize the economic benefits of exports and take steps to encourage global trade, those area will enjoy the steepest growth rates.
Companies in Illinois boosted export revenues by 29% last year according to the International Trade Administration. The state’s largest export category was machinery, which brought in $17.8 billion in revenues for 2011. The Chicago assembly plant of Ford Motor Company is just one of many beneficiaries of this increase in exports, which were mostly sold to buyers in Canada ($19.2 billion), Mexico ($5.7 billion) and China ($3.9 billion).
Texan exports rose by 21% last year, pulling ahead of all other US states. Texas export revenue totaled $249.9 billion. As with Illinois exports, most Texas exports were sold to buyers in Mexico, Canada and China. The Houston-Sugarland-Baytown area alone sold exports that totaled more than $65.8 billion in 2009.
Ohio is also among the states that have ramped up export revenues in recent months. According to the Dayton Business Journal, Ohio companies boosted their export revenue by about 12% last year. The Cincinnati-Middletown metropolitan area exported $15.5 billion worth of merchandise last year, nearly doubling the export revenues of the next best Ohio metropolitan area, Cleveland ($8 billion). Ohio’s exports went mostly to Canada, with Mexico and China trailing close behind.
Not only are US cities exporting a plethora of profitable merchandise, but companies across the country are exporting to essentially the same markets. If these impressive increases in export revenues show anything, it’s that these foreign markets are not saturated and have great potential for more American companies interested in exporting their products.
It’s no secret that China has a long history producing counterfeit goods—back in the 17th century, Spanish priest Domingo Navarrete, remarked that the Chinese had “imitated to perfection whatsoever they have seen brought out of Europe.”
But trends in Chinese consumption indicate this practice is losing momentum quickly. In addition to government crackdowns on manufacturers of fake goods, more than ever, the average Chinese customer is demanding authentic products.
According to figures published by the Harvard Business review, only 12% of Chinese shoppers were willing to purchase fake jewelry, drastically down from the 31% figure of two years ago.
It is no coincidence that many of 57 million Chinese tourists last year, reported “shopping at luxury stores” as a motivating factor for travelling. Western brands are held in high-esteem, and with consumer preferences in China rapidly changing, these brands are in a prime position to succeed in the Chinese market.
Living standards and wages are rising in most parts of China, especially in urban areas. Online buyers are switching from consumer-to-consumer (C2C) platforms to business-to-consumer (B2C) marketplaces when purchasing goods online. Beginning in 2002, the B2C sector has seen a compounded annual growth rate of 110%, according to a report on e-commerce in China published by the Macquarie Group.
This preference for buying assured quality goods directly from businesses online bodes well for those looking to export to China.