China Holds Ever-Growing Advanced Technology Trade Edge on U.S.

(Bloomberg) -- Getting a leg up in the ability to process volumes of information in short periods of time is key in a rapidly advancing technological world, and the U.S. is increasingly dependent on China.

America imported almost $156 billion in advanced technology information and communications equipment from China in 2017 -- an almost six-fold increase from 15 years earlier, according to U.S. Census Bureau data.

China, meanwhile, has seemingly avoided the middle-income trap -- the phenomenon in which middle-income countries fail to evolve into high-income nations because they do not move up the technology ladder. In recent years, China has increased the sophistication of the products they produce.

After a relatively stagnant period from 2013 to 2016, U.S. imports of all types of Chinese-made advanced technology goods -- some of which include circuit boards, modems, disk drives, solar cells, laser printers and robots -- jumped 15.8 percent in 2017 from the previous year.

Ninety percent of U.S. advanced technology imports from China are information and communications goods that include computer central processing units, peripherals and telephone switching components. But record highs for Chinese shipments were also reached in the biotechnology, electronics, flexible manufacturing, advanced materials and aerospace categories.

The strongest area of U.S. advanced technology exports to China was in aerospace, dominated by Boeing aircraft. Still, at $16.3 billion, those U.S. shipments to China amount to about a tenth of America’s imports of Chinese-made goods used for information and communications.

The U.S. exported $35.7 billion in advanced technology goods to China in 2017, a four-fold increase in the last 15 years. The gap in such trade now stands at a whopping $135.4 billion in favor of the Chinese.

To contact the reporter on this story: Alex Tanzi in Washington at atanzi@bloomberg.net

To contact the editors responsible for this story: Kristy Scheuble at kmckeaney@bloomberg.net, Vince Golle, Vincent Del Giudice

©2018 Bloomberg L.P.