Chart of the Week -China, the Mega Trader and its financial implications

I thought the chart produced by Standard Chartered showing just the sheer scale of China trade with some trend data puts it into perspective how China’s trade flows influence so much around the world.  China's exports and imports of goods amounted to $4.16 trillion in 2013, topping the U.S. for the first time.

Standard Chartered economist Madhur Jha produced a report, titled "Global Trade Unbundled," that shows the significance of China trade.

Some of the implications of this growth will surely impact supply markets.  China does not have the same political restrictions as U.S. and European countries (ie, export controls, export licenses) and therefore are able to do things in certain markets with an eye to long term domination of supply– just look what they are doing in Indonesia now to ensure nickel supply. China is a key player in most global supply chains and many disruptions usually start with events in China.

From a financial perspective, the key takeaway from this growth is that China’s trade volumes will ensure the renminbi (RMB) will push to become a global invoicing currency.    According to SWIFT, RMB payments value in the United States to China Hong Kong corridor grew 229% between April 2013 and April 2014 and accounted for 2.4% of all payments value as of 30 April 2014.


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