Exports are those goods and services that one country produces and is able to sell to other countries. Exports are good. Particularly if a country likes to buy (imports) goods from other countries. What caught our eye recently about exports was reading that China had just become the largest exporter of goods in the world. We thought that they were number one. We also thought that the US was number two. We were wrong on both counts. Who was number one and now is number two? Japan would come to mind. But no, Japan was number four after the US. The former number one is Germany.
That got us to thinking. China is now number one but they have over a billion people. Germany is a relatively smaller country in terms of population. Maybe we should do a quick analysis of exports per capita and see the result. So, we did exactly that. Here are the results (ranked by dollar volume of exports) and there are some surprises.
First, there is only one ground rule. We are only going to analyze the top 10 exporters so we will not try to find a small country out there that exports diamonds or gold and can therefore produce a real high dollar amount per capita. These are just raw numbers presented in tabular form. Some comments from TheFundamentals follow:
Exports Exports
Country (Billions of $$$) Population Per Capita
China $ 1,194 1,339,000,000 $ 892
Germany 1,187 82,000,000 14,476
United States 995 307,000,000 3,240
Japan 516 124,000,000 4,065
France 457 64,000,000 7,138
Netherlands 398 17,000,000 23,388
Italy 369 58,000,000 6,362
South Korea 355 49,000,000 7,247
United Kingdom 351 61,000,000 5,759
Hong Kong 327 7,000,000 46,700
Source: The World Factbook
This is an eye-opening chart. How many of us knew that Germany was the largest exporter in the world until this recent move by China? Bigger than the US; bigger than Japan. How do the Germans do it? Perhaps even more eye-opening is the terrific performance of the Netherlands. What on earth are the Dutch producing to give them a per capita performance almost double the Germans? We are going to pass on Hong Kong because we are thinking that their numbers may be skewed by products that are China produced but recorded as a Hong Kong export. We just don’t know. But look at the per capita numbers. In the above chart the US is second to the last; only exceeded by lower exports per capita by the Chinese who are relative newcomers on the export scene; still have a largely agriculture dominated economy and have four times the population of the United States. And we can reasonably predict that it is only a matter of time that the China per capita number passes the United States just as all the other more productive countries already do. Kudos to South Korea. They are way ahead of many countries that have much longer tenure as manufacturing and exporting economies.
We are flabbergasted at the results of this brief analysis. In awe of the countries that perform and disdained at the poor performance of the United States. The business of the United States is no longer business. Or, perhaps, people just buy from other countries because of price and quality? Countries that still believe in competitiveness.
Politicians talk about jobs and economic growth as if they knew of what they speak. Unfortunately, they are not engaged in either process – jobs or economic growth. All they do is place burdens on the economy. Here is a question to ask them. Are you willing to bet your paycheck on increasing the per capita exports of the United States? It is time for the United States to forget about bringing democracy to the world, lecturing others on their societal values and trends and policing the terrorists and other bad people of the world? It is time for the United States to tend to its export business? Simply put, it is time for the United States to tend to business? The French sell more than twice per citizen than the US; Italians double; Brits 75% more. Wow. You’d think we’d be focused on exports? No wonder we have so many unemployed.
Today, the Washington gang is going to get an opportunity to interview the head of one of the world's most successful companies. A huge exporter. TheFundamenals wonders if they are ready to learn about what makes a company a successful exporter? We sure hope so. Let's see what they ask Mr. Toyoda. We think he could help them understand two key economic fundamentals - price and quality. Do you think they will seize this opportunity to learn about competitiveness?
1 comment:
For all of the cries of socialism, European countries have national policies including tax policies that encourage manufacturing. The United States needs to reexamine what it has done in the period since the 1980's in which the idea of free markets is the most important ideal. Our country's national interests and the interests of individual companies are not the same. We should stop pretending that everything is fine as long as the stock market rises. The withering of the middle class will in the long run devastate our consumer driven economy.
One of the problems in the United States is that the unions and conservatives have worked in different directions to destroy our nation's industrial base.
The unions have created a problem by focusing on the short term. This has created a deterioration of their ranks and resulted in legacy costs. Conservatives have caused a different problem by doing everything in their power to kill unions. This has created an antagonism that caused our indusrial power to falter.
In European countries, large and medium sized companies have union members sitting on their boards of directors. This has created a different dynamic. They are forced to work more cooperatively. For all of the problems in Germany and France, their position of eminence in exports is a testament to that cooperation.
Our country needs to shift its tax and immigration policies to encourage what is left of our export economy. It is probably too late to save most heavy industry, but the federal government should try.
Tax policy that takes away the advantages of businesses to export jobs should be a focus of the next wave of changes in tax legislation. Multinational companies can export their jobs if they like. The American taxpayers should not, however, subsidize those efforts. Tax credits for retaining jobs here and taking away tax breaks that encourage the shift need to be implemented.
The immigration policies of the past administration were extremely harmful to the American position of dominance in technology and technological exports. Bright students from other countries including post-graduate students have been severely hampered in their efforts to matriculate at universities located in the United States. If these students do not come to the United States to study, they will be far more likely to remain outside our borders. The potential intellectual energy that is lost will hamper our economy in the decades to come.
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