The Red Dragon Rises
Earlier this month, Bloomberg news reported that China has exceeded the United States to become the world’s largest trading nation. China’s combined exports and imports totaled $3.87 billion in 2012 surpassing the United States by a cool $50 billion. It past an earlier milestone in 2009 by emerging as the biggest exporting nation in the world. This has implications for other advanced economies as China gradually chisels away manufacturing jobs and undermines the status of the US dollar as the world’s reserve currency.Interestingly, the recent spate of currency swap arrangements China has signed with important bilateral trade partners, such as Brazil, Korea and the UAE etc., directly undermines the primacy of the US dollar and signals a shift in perception of China’s economic prowess.