China’s trade focus is pivoting. Due to its trade war with the US and the fast growing economies of its southern neighbors, China now trades more with Southeast Asia than with the US.
In the first quarter of 2020, China exported $478 billion dollars in goods to the rest of the world. This was a 13% decline from the first quarter of 2019 primarily caused by coronavirus-led disruptions to global trade.
About 14% of Chinese exports during the period were shipped to the US. While the US remained China’s largest single-country export market, this was by far the US’s lowest share in the past 15 years. As recently as 2018, the US accounted for almost 20% of Chinese exports. The decline is largely a result of a trade war between the two countries that began in 2017, which has resulted in higher tariffs.
Yet as the US’s importance to China declines, the member countries of the Association of Southeast Asian Nations (ASEAN) have stepped in. The ten members of the ASEAN trade bloc include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. These countries, many of which have rapidly growing economies, accounted for nearly 16% of Chinese exports in first quarter of 2020, the first time on record that the trade bloc accounted for a larger share of exports than the US.
Among ASEAN countries, Chinese exports have risen most quickly to Vietnam. As its economy industrialized, the country went from importing just $1 billion in goods from China in all of 2001 to over $60 billion in 2019.