Global Export Champion

The debate over exports — about who wins and who loses — is becoming ever more contentious. While trade surpluses are not a complete indicator of a nation’s economic health, they do provide valuable clues about underlying trends in the global economy. We wonder: Which country in the world generated the largest trade surplus in 2006?

A. China
B. Russia
C. Germany
D. Japan

A. China is not correct.

China had a trade surplus of just $32 billion as recently as 2004. While the country's exports have grown by an average of 27.8% per year since then, imports have increased by just 18.8%. As a result, by 2006 China had accumulated a surplus of $184 billion — representing 8% of the country's GDP.

Much of China's record surplus is the result of the country's lopsided trade balance with the United States. In 2006, China exported $288 billion worth of goods to the United States — while importing only $55 billion.

B. Russia is not correct.

Russia's trade surplus for 2006 was almost as high as China's, at $141 billion. That represents a 66% increase from its 2004 balance of $85 billion — with much of this increase due to rising energy and raw material prices. These two categories account for 85% of Russia’s exports.

Russia has more than a quarter of the world’s proven reserves of natural gas, much of which is exported to Western Europe. Russia is also the world's second-largest oil exporter (as of 2005).

C. Germany is correct.

At about $206 billion, Germany currently has the world's largest trade surplus. With exports totaling about $1.1 trillion, it has been the world's largest exporter since 2002, when it surpassed the United States.

Germany accounts for 9.6% of world exports — compared with 8.9% for the United States, 7.4% for China and 5.8% for Japan (as of 2005).

However, Germany's trade surplus has only increased by 6.9% since 2004 — whereas second-place China's has increased nearly six-fold. As a result, 2006 is likely to mark the last year when Germany had the world’s largest trade surplus — with China predicted to inherit this mantle during 2007.

D. Japan is not correct.

The times when Japan's trade surplus was the world's highest are long gone. Still, at about $81 billion, Japan had the fifth-highest trade surplus in the world in 2006 — ranking after third-place Saudi Arabia and fourth-place Russia.

Exports play a much smaller role in Japan's economy than in China's. While Japan’s exports as a percentage of GDP were 14.3% in 2005, China’s stood at nearly 37%.

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