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Booming China Trade Presents New Challenges for
Rural America
Fred Gale, USDA/ERS
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The increasing prevalence of "made in China" labels
signals greater competition for many businesses in the rural United
States. U.S. imports from China totaled $125.2 billion in 2002,
up from $19.3 billion (in constant 2002 dollars) in 1990. Trade
with China grew even more in 2003. Preliminary data show that exports
and imports had already surpassed their calendar year 2002 totals
in the first 10 months of 2003. China's share of U.S. imports rose
from 3 percent in 1990 to 12 percent in 2003 (based on January-October
totals). Major rural industries, such as apparel, furniture, plastics,
and metal products, face direct competition from China. These industries
are an important part of the economic base in many rural U.S. communities.
However, many other Chinese imports, such as toys and footwear,
are displacing imports from other Asian countries; such products
are not widely produced in rural America.
China’s economic growth is also also creating business opportunities
for U.S. exporters. Between 1990 and 2002, U.S. exports to China
grew from just $6 billion to $22 billion (in constant 2002 dollars).
Only 3 percent of U.S. exports go to China, but that share has
more than doubled since 1990. Dramatic growth in China’s
home construction, furniture, communications, automobile, supermarket,
restaurant, education, and tourism sectors is increasing China’s
demand for imported goods and services. U.S. exports of industrial
equipment, electronic components, aircraft, forest products, and
animal hides have benefited the most from China’s growth.
China has been a boon for U.S. soybean producers, whose sales to
China have exceeded $1 billion annually in recent years, accounting
for about half of U.S. agricultural exports to China.
Rural U.S. businesses may find many smaller market niches as
China grows and opens its retail market to the outside world. U.S.
apples, oranges, nuts, wines, cereals, snack foods, meat, and poultry
are appearing more often on supermarket shelves and restaurant
tables in China. Specialized equipment, machinery, instruments,
and technical expertise from the U.S. are in demand as China brings
its manufacturing sector up to world standards. Chinese travel
overseas is starting to bring extra business to rural U.S. destinations.
China’s exports of basic items like clothing, shoes, toys,
and household items benefit consumers in both rural and urban areas
by keeping prices low. Additionally, many U.S. businesses benefit
from lower costs of imported components, machinery, and equipment.
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