Expert: China Actually Dependent On Western Goods

Countries are following Biden’s advice to “reshore” and “friend shore” supply chains, moving key elements of production from China to manufacturers back home or to trusted partner economies, Victor Cha of Georgetown University wrote in an analysis for the January 2003-February 2003 issue of Foreign Affairs.

Photo Insert: China gets nearly 60% of its iron ore, essential to its steel production, from Australia.

Part of China’s hubris in practicing economic coercion against its trade partners comes from confidence that the targets will not dare counter sanctions with concrete action.

Beijing is right to be confident: it is hard for any single country to go up against an economic behemoth. China, for instance, accounts for 31.4% of global trade in Australia, 22.9% in Japan, 23.9% in South Korea, and 14.8% in the US—whereas those countries respectively account for 3.6%, 6.1%, 6.0%, and 12.5% of China’s trade, respectively.

If these states fight back or work together or, in other words, practice collective resilience, they could flip the script. Australia, Japan, South Korea, and the US may individually be at a disadvantage but combined they account for nearly 30% of China’s imports, exceeding what China’s exports account for in most of theirs.

Add Canada, the Czech Republic, France, Germany, Lithuania, Mongolia, New Zealand, Norway, Palau, the Philippines, Sweden, and the UK, and the collective share of China’s imports is 39%.

These states all produce critical goods on which China is dependent. China gets nearly 60% of its iron ore, essential to its steel production, from Australia. It gets more than 80% of its bulldozers and Kentucky bluegrass seed, important for sowing fields, from the US.

More than 90% of China’s supplies of scores of other goods are sourced from Japan. And 80% of China’s whiskey comes from the UK.

The impact of these imports is far from trivial. China relies on Japan for more than 70%t of its supplies of 114 items costing more than $6.2 billion in trade and for more than 90% of its supplies of 47 items, worth over $1.7 billion.

China is over 70% dependent on US producers for 94 items, totaling over $6 billion, and 43 items for which China is over 90% dependent on US producers, worth over $1.5 billion. Added up, all 406 of the “high dependence” goods produced by coerced states are worth more than $31.2 billion to China.

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