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Westward Woe: Pacific States Face Big Export Hit in China Slowdown

If you export to China, the latest headlines are not good news.

After a decade of rapid growth, China's appetite for goods and raw materials from the rest of the world appears to be slowing. And that's left companies and countries that sell to China wondering just how badly their orders may shrink.

On Tuesday, Beijing reported that China's giant manufacturing sector contracted at the fastest pace in three years. A separate private survey of smaller firms showed the factories slowing to the weakest pace in more than six years.

The slowdown is hitting China's biggest suppliers and major trade partners hardest. In August, exports from South Korea tumbled by nearly 15 percent — the most in six years.

For U.S. exporters, China represents the third-largest market — behind Canada and Mexico — accounting for $120 billion worth of goods last year. But that trade represents only 7 percent of U.S. exports—or less than 1 percent of total gross domestic product, according to economists at Wells Fargo Securities.

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"Even when indirect effects are considered, the United States simply does not seem to have significant economic and financial exposure to China," they wrote in a recent note to clients.

But that impact varies widely from one U.S. state to another, with West Coast states more heavily reliant on Chinese markets.

Among the most dependent states: Washington, which sold roughly 20 percent of its exports to China last year, or nearly $10 billion worth of goods. Airplanes, the state's largest export by far, made up the bulk of the state's sales to China.

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California exported some $16 billion to mainland China last year, with computers and electronics accounting for nearly 28 percent of the total. Texas was the third-largest exporter to China, with nearly $11 billion worth of products that included chemicals, computers and machinery.

Alaska, which exports a smaller volume of goods, last year sent a bigger share — some 28 percent — to China. Roughly half of Alaska's $1.5 billion in exports to China last year consisted of seafood.

U.S. farm states are also big exporters to China, which is the biggest market for American agricultural products. Some 20 percent of all U.S. farm exports are sold to China, which bought $30 billion worth of food products in fiscal year 2014, including soybeans, distillers' grains, hides and skins, tree nuts, coarse grains, cotton and beef, according to the U.S. Department of Agriculture.

While the total impact of Chinese exports is a relatively small share of U.S. GDP, sales have grown faster than any other trading partner on the last decade — nearly tripling between 2005 and 2014. U.S. exports Canada rose 47 percent growth and exports to Mexico roughly doubled.