Business Monday

Gateway City: China continues to muscle in on local trade

China ranks No. 3 among South Florida’s trade partners, but South Florida imports more from China than from any other country.

China is more important to South Florida than the other way around, from an import-export trade perspective. China is South Florida’s third most important trade partner, according to the U.S. Census Bureau’s most recent trade statistics. But South Florida only ranks as China’s 15th most important gateway for U.S. trade.

This is not unusual. China is the most important trade partner for nine of the nation’s top 20 Customs districts — more than any other country can boast — and No. 2 for another six. Joining South Florida in counting China as the third most important trade partner is Detroit. San Diego counts it as No. 4. Philadelphia is the outlier, counting it as No. 11.

This is the third in a 10-part series examining South Florida’s top 10 trade partners, with No. 1 Brazil and No. 2 Colombia covered in previous weeks. In the coming weeks, I will look in greater depth at the remainder of South Florida’s top 10 trade partners: No. 4 Chile, No. 5 the Dominican Republic, No. 6 Honduras, No. 7 Peru, No. 8 Venezuela, No. 9 France and, finally Costa Rica, which ranked No. 4 at this time last year but has fallen to No. 10.

China’s trade with South Florida increased to $1.62 billion through the first three months of 2015, the sixth consecutive year that the first quarter set a record, and a record 5.92 percent of all South Florida trade.

U.S. rank: China ranks second among the United States’ top trade partners, trailing only Canada. For the first time, it is within 1 percentage point of U.S. trade with Canada, with 15.20 percent to Canada’s 15.79 percent. It is China’s greatest market share ever and Canada’s lowest. About a decade ago, China accounted for 10.09 percent of all U.S. trade through the first quarter, and also trailed Mexico. That year, in the first quarter of 2004, Canada accounted for 19.84 percent, the first time it had dipped below 20 percent, and Mexico accounted for 11.26 percent. Mexico has subsequently risen to 13.93 percent. China first passed Mexico to rank as the United States’ second most important trade partner in 2007.

South Florida trade: South Florida’s trade with China is up a slight 1.27 percent through the first quarter, while overall South Florida trade is off by 3.27 percent. China’s trade with the United States, meanwhile, is up 5.66 percent, while U.S. trade with the world is off 3.07 percent.

Importance to South Florida: As South Florida’s third most important trade partner, China matters. With the expansion of the Panama Canal nearing completion, and with the PortMiami channel dredging to accommodate bigger ships nearing completion, China is likely to become more important in coming years. It is PortMiami’s No. 1 trade partner already.

South Florida competition: With most of South Florida’s top trade partners, the Customs district ranks either first or second in importance as a U.S. gateway. Not so, with China. China’s U.S. trade is dominated by Los Angeles, although that grip has loosened to its lowest level ever through the first quarter of 2015, to a still impressive 25.17 percent. Five years ago, however, it accounted for more than 30 percent. While it would be nice to think that Miami is capturing that leakage, it is not. South Florida trade has hovered between 1.01 percent and 1.22 percent for the last decade; the 2015 figure is 1.16 percent. The Customs district led by Savannah has, however, grabbed some of that market share, and that might help South Florida and particularly PortMiami in coming years.

South Florida exports to China: South Florida exports to China are off so far, down 14.17 percent, more than three times the decline for all South Florida exports. Dropping most are previous top export and current No. 2 copper waste and scrap, off $5.89 million; previous No. 2 and current No. 3 aluminum waste and scrap, down $7.12 million; and No. 4 civilian aircraft, engines and parts, off $5.10 million. The new No. 1 South Florida export is paper and paperboard scrap, which is off $1.49 million. Total South Florida exports to China had not been below $100 million — the 2015 total so far is $98.58 million — since this time in 2010.

South Florida imports from China: Miami imports more from China than any other country, including overall No. 1 trade partner Brazil and No. 2 Colombia. For more than a decade, imports from China have topped the previous record first quarter, the lone exception being 2009. Through the first three month of 2015, imports from China into South Florida were valued at $1.52 billion. Likewise, imports of cellphones — the top import — had increased every year except one over the course of the last decade — that is, until this year. Cellphone imports are off 9.96 percent in 2015. South Florida trade with China, particular high-tech imports — received a big shot in the arm when all freighter airlines like Cathay Pacific and China Airlines began service at Miami International Airport in recent years.

Surplus/Deficit: South Florida, which runs a trade surplus with the world, would run a bigger one if not for China. South Florida’s largest deficit is with China, and through the first three months of 2015, it was a record $1.42 billion. For every dollar of two-way trade with China, six cents is a Miami export. In that sense, Miami’s trade with China is less balanced than it is with the rest of the nation. For every dollar of Chinese trade with the United States, 20 cents is a U.S. export.

Exports by port: PortMiami and MIA are responsible for the lion’s share of South Florida trade with China, with PortMiami’s leading exports being the previously mentioned waste and scrap of paper, copper and aluminum. MIA’s leading exports are aviation-related, as previously mentioned, and medical devices.

Imports by port: PortMiami accounted for almost $1 billion of the imports into South Florida through the first quarter, led by seats, furniture and computers. MIA was responsible for most of the rest, with cellphones the dominant shipment.

Coming next: China’s trade growth with South Florida over the last decade has been impressive. So has that of the No. 4-ranked trade partner, Chile, which will be featured next week.

Ken Roberts is founder and president of WorldCity, based in Coral Gables. He can be reached at kroberts@worldcityweb.com.

Chinese imports into South Florida: a closer look

March

2015 YTD

1-year

1-year

10-year

10-year

Change

in rank

March

2015

YTD

Total,

all imports

$1,516,674,674

$36,597,542

2.47%

$812,332,755

115.33%

0

1

Cellular, landline phones, parts

$359,474,520

-$39,744,399

-9.96%

$352,644,962

5163.51%

0

2

Computers

$79,251,023

-$60,932,260

-43.47%

-$1,968,661

-2.42%

0

3

Seats, excluding barber, dental

$50,370,762

$8,417,861

20.07%

$36,368,932

259.74%

0

2

Computers

$79,251,023

-$60,932,260

-43.47%

-$1,968,661

-2.42%

3

5

Printers, all types, parts

$30,131,515

$6,895,649

29.68%

$29,593,915

5504.82%

4

6

Miscellaneous electrical machinery

$28,399,560

$7,169,613

33.77%

$27,581,502

3371.58%

0

7

Travel goods, including handbags,

wallets, jewelry cases

$27,608,736

$3,209,308

13.15%

$16,057,232

139.01%

7

8

Motor vehicle parts

$22,725,306

$6,444,913

39.59%

$12,625,981

125.02%

5

9

Fish fillets, chilled or frozen

$22,289,984

$4,626,701

26.19%

$18,200,491

445.05%

-4

10

Cameras, camcorders

$21,907,018

-$2,667,086

-10.85%

-$17,100,031

-43.84%

-6

11

Computer parts

$20,247,219

-$9,335,167

-31.56%

-$26,649,018

-56.83%

-3

12

TVs, computer monitors

$18,127,268

-$3,864,399

-17.57%

$14,887,718

459.56%

12

13

Glazed ceramic tiles

$16,748,010

$6,129,504

57.72%

$15,321,174

1073.79%

6

14

Plywood, veneered and laminated wood

$16,321,134

$3,471,597

27.02%

$11,568,139

243.39%

9

15

Footware, sole and upper rubber or plastic

$15,544,470

$4,618,289

42.27%

$2,070,679

15.37%

Source: WorldCity analysis of U.S. Census Bureau data

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