What Does China Export?

This question may sound dumb. And if it does, that is because it had been intentionally formulated to sound dumb. Everyone knows that China is producing everything. Everything you buy, everything you wear, everything you stare in, everything from your shoes to your household appliances is more often than not imported from China.

And there is, indeed, lots of truth in that. As of now, China is the largest industrial producer in the world, outshining every other player on the planet, in terms of the sheer size of its industrial output, and, more importantly, of its industrial export.

Still, it would be interesting to know what exactly makes for the size of its exports. What it the structure of this “everything” China is selling to the world.

Let’s have a look at what China is exporting

NB: I will be using data & infographics provided by the Observatory of Economic Complexity. If you have nothing to do this evening, explore their website.

….

Or not. I have changed my mind. We will not be looking at what China is selling now, and will be looking instead at what it was selling in the year 1995, long before it turned into the Leviathan of the modern day.

So, what was China selling in 1995?

So, what do we see? What was China selling, based on this picture?

It was selling textiles, natural and synthetic. It was selling electronics. It was selling plastic stuff, many, many goods and appliances made of plastic. It was selling stuff made out of leather.

Long story short, it was selling consumer goods. Cheap, low-tier consumer goods produced by its privately held light industry. Dumb, low complexity stuff.

And the thing with dumb, low complexity markets is that they tend to be big.

Now let’s scroll forward to 2022

On the first glance, the structure of export has changed. There’s much more of the electronics here, a bit less of the textiles.

Still, the point stays the same.

Decades after China started its skyrocketing growth, it is mostly exporting consumer goods. (“Broadcasting equipment”, the single largest articles, is video cameras, by and large). Low complexity, unsophisticated stuff. By and large, Chines structure of export is pretty “dumb”.

Ok. But how do we know it is dumb?

Let’s compare it with a country with a “smart” structure of exports

I mean, the United Kingdom (2022).

Look at the upper left corner. Gas turbines.

The seemingly de-industrialised country is one of the world’s leading producers of jet engines. The most demanding and technologically complicated machines that do even exist.

(If you want to know why, I recommend diving into one of Jordan W. Talyor’s threads)

Somewhat counterintuitively, aircraft industry is probably more complex than the space rockets production. And the aircraft engine may be the single most demanding and most sophisticated product of modern technology & industry. There is hardly any other mechanism on the planet Earth¹ more complicated, and more perfect in its complexity than the engine of a commercial aircraft.

And the seemingly de-industrialised country (United Kingdom) holds super strong positions on the global market of commercial aircraft engines. It is one of few large producers of aircraft turbines on the planet Earth.

It is worth noting that pretty much the entire global market is controlled by only several players, all from the old industrial powers of Western Europe and North America. Meanwhile, the rising manufacturing powers of Asia play almost no role in this top-tier, ultimate complexity market.