In August of this year, our country's trade surplus was $68.36 billion, a decrease of 13.2%.

The day before our country announced its trade figures, the United States also announced its trade figures. However, there is a one-month delay in the U.S. trade data, and the latest data announced is from July, with a trade deficit of $65 billion, which is exactly the same as the trade deficit in June, which was also $65 billion at that time.

Although our data is from August and the U.S. data is from July, there is one thing that is very strange, that is, our trade surplus is almost equal to the U.S. trade deficit.

Since 2018, the United States has launched a trade war, and now five years have passed, it seems that the United States is completely unable to change the long-term trade deficit problem.

Who will win the final victory in the future?

01

In fact, it is not surprising that the United States has a trade deficit. If the United States has a trade surplus, it may be worth being strange and worth studying the reasons.

The U.S. Department of Commerce often complains about the huge trade deficit and uses this as a reason to make various unreasonable demands on other trade partners. It seems that the United States is particularly unwilling to bear the trade deficit.

Advertisement

But the actual situation is not like this. Both the U.S. government and the American people have benefited a lot from the trade deficit.

The United States is an economic powerhouse, especially in the field of technology, occupying a leading position in the world. Under this situation, why can't the United States export a large amount and form a surplus?Actually, the reason is not too hard to understand.

Over the past years, as the U.S. economy has been getting better and better, the cost of manufacturing in the United States has also been increasing, mainly reflected in the rising wages of workers, and the increasing rents for land and office buildings. Therefore, over the past 40 years, the United States has been continuously moving its manufacturing industry overseas.

It first moved to Japan, then to the Four Asian Tigers, followed by Mainland China, and now it is Southeast Asia.

Having moved all the low-end manufacturing out, what about the consumer goods that the American people need for their daily lives?

Simple, just import them.

Everyone must understand that the reason for moving out is because manufacturing overseas is cheaper. In other words, it is better to buy from abroad than from domestic sources. The United States' large imports have allowed ordinary people to enjoy goods of higher quality at a lower cost.

Why not do it?

Although the United States also exports a large number of high-tech products, it cannot withstand the large total volume of low-end consumer goods, which leads to the United States' export volume being less than its imports, resulting in a trade deficit.There is another issue to consider: when high-tech products are manufactured in the United States, they are first used to meet domestic demand. The U.S. is one of the largest consumer markets globally, so its internal demand has a significant impact on economic growth. Naturally, good products are used for internal consumption to stimulate the economy.

Secondly, there are many high-tech products that the U.S. may not necessarily be willing to sell abroad. Even if they are sold, there are numerous restrictions of various kinds.

These reasons naturally also affect U.S. exports.

In fact, speaking of this as a normal trend in economic development, it is not only the case in the U.S. but also in Europe.

For us, the future might be the same.

As our country's economy continues to grow, the standard of living for the people also increases, which is naturally reflected in higher wage income. This is certainly a good thing.

However, for low-end manufacturing, this means that costs are increasing.

For example, the cost to produce a pair of shoes in a domestic factory might be 50 yuan, but if produced by a factory in Vietnam, it could be only 20 yuan.

From the perspective of producers, it is logical to shift production to Vietnam.For consumers, the principle is the same: buying shoes imported from Vietnam is cheaper than those produced locally.

Now, our exports of low-end manufacturing products have decreased, but our exports of high-end manufacturing products have increased.

The most outstanding performance in recent years has been in new energy vehicles. Currently, two-thirds of the global electric vehicle market share belongs to China.

Of course, in the overall automobile market, the share of electric vehicles is not high enough yet, currently less than 20%, but it will definitely increase in the future.

If, in 10 years, electric vehicles account for 80% of all cars and we still hold two-thirds of that market, it means that we would dominate half of the global automobile market just with electric vehicles.

This is better than exporting any amount of bags, shoes, and socks.

So, looking back, the reduction in exports of traditional manufacturing goods is actually China moving these operations overseas.

After years of trade wars, for low-end manufacturing, we have merely changed the place of production. But for high-end manufacturing, we have achieved significant development.