Rise of China’s electrical apparatus in U.S. imports

The rise of China in international the electronics trade is remarkable and has attracted increasing scrutiny e.g. in connection with Huawei, one of China’s most important electronics companies. hanse data show that while China dominates U.S. electronics trade, electronics represent only a relatively small part of U.S. imports.

U.S. historical imports in telecommunications equipment, including telephones, from China increased during the past 30 years from representing 0.2 percent of total telecommunications equipment imports in 1986 to 65.9 percent in 2016. The telecommunications equipment sector (SITC 7249) in U.S. imports over the same period grew from US$8.4 billion to US$70.7 billion. In Japan, China’s share in telecommunications equipment imports increased even more from 0.5 percent in 1986 to 81.1 percent in 2016 while in E.U. imports it increased from 0.1 percent and 36.6 percent. U.S. imports from China naturally may include items manufactured on behalf of U.S. companies (e.g. Apple iphones).

Recent trade data suggest that China’s share in U.S. imports may have peaked in 2015. U.S. imports in electronics apparatus (HS 8517 electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunications apparatus for carrier-current line systems or for digital line systems [includes mobile phones]) from China made up 43.0 percent of total U.S. imports down from 44.1 percent in 2015. During the last 10 years, China increased its share in electronic apparatus by 19.6 percentage points from 2006 through 2016, representing the fastest rise in share, followed by with Mexico, Vietnam and Estonia, that increased their share over the same period by 5.7, 2.1 and 1.3 percentage points, respectively. 

Figure 1. U.S. imports electrical apparatus (HS 8517)
Share in U.S. imports, 2016

Electrical apparatus made up 2.4 percent (US$54.8 billion) of total U.S. imports in 2016 up from 1.2 percent in 2006. It represented 4.9 percent of total U.S. imports from China in 2016 compared with 4.2, 2,7 and 70.4 percent for Mexico, Vietnam and Estonia, respectively.

E.U. imports in electrical apparatus show a more balanced import pattern despite China’s large presence. E.U. imports from China represented 24.4 percent of total electrical apparatus imports in 2016 compared with 11.7, 8.1 percent and 5.2 percent from the Netherlands, U.S. and Cech Republic, respectively. In 2016, electrical apparatus was 3.5 percent of total E.U. imports from China. Electrical apparatus made up 1.2 percent (US$50.6 billion) of total E.U. imports in 2016 up from 0.6 percent in 2006.

Figure 2. E.U. imports electrical apparatus (HS 8517)
Share in E.U. imports, 2016

The U.S. grievances with China’s electrical apparatus trade may rest with China’s dominance. However, trade in electrical apparatus is relatively small for the U.S. and for China. It is even smaller for the E.U. While the sector undoubtedly exhibits important strategic and intellectual properties elements that are not reflected in the trade data, the U.S. may unduly focus on a trade sector that may not be quite as important as advertised.