US-China phase one tracker: China’s purchases of US goods
On February 14, 2020, the Economic and Trade Agreement Between the United States of America and the People's Republic Of China: Phase One went into effect. China agreed to expand purchases of certain US goods and services by a combined $200 billion over 2020 and 2021 from 2017 levels. This PIIE Chart tracks China's purchases of US goods covered by the deal, relying on import data from Chinese customs. It then compares those purchases with the legal agreement's annual targets (see methodology below).
According to the agreement, China has committed to purchase no less than an additional $63.9 billion of covered goods from the United States by the end of 2020 relative to the 2017 baseline. Defining the 2017 baseline using Chinese import statistics implies a 2020 purchase target of $173.1 billion.
THE LATEST NUMBERS
Through December 2020, China's total imports of covered products from the United States were $100.0 billion, compared with the target of $173.1 billion. In the first year of the agreement, China's purchases of all covered products only reached 58 percent of their target.
For covered agricultural products, China committed to an additional $12.5 billion of purchases in 2020 above 2017 levels, implying an annual target of $36.6 billion. Through December 2020, China's imports of covered agricultural products were $23.5 billion. In the first year of the agreement, China's purchases of covered agricultural products only reached 64 percent of their target.
For covered manufactured products, China committed to an additional $32.9 billion of purchases in 2020 above 2017 levels, implying an annual target of $111.2 billion. Through December 2020, China's imports of covered manufactured products were $66.7 billion. In the first year of the agreement, China's purchases of covered manufactured products only reached 60 percent of their target.
For covered energy products, China committed to an additional $18.5 billion of purchases in 2020 above 2017 levels, implying an annual target of $25.3 billion. Through December 2020, China's imports of covered energy products were $9.8 billion. In the first year of the agreement, China's purchases of covered energy products only reached 39 percent of their target.
For all uncovered products—making up 29 percent of China's total goods imports from the United States in 2017—the phase one agreement does not include a legal target. In the first year of the agreement, China's imports of all uncovered products from the United States were $35.0 billion, 23 percent lower than in 2017.
Though the agreement also sets targets for China's purchases of certain traded services from the United States, those data have not been released and so are not covered here. The agreement also contains targets for goods and services purchases for 2021 not illustrated here.
Note on Data Release: This update is based on December 2020 data released by Chinese customs on January 20, 2021. As set out in the legal agreement, an alternative 2017 baseline scenario—and hence, set of 2020 purchase commitment targets— allows for use of US export statistics instead.
The PIIE Chart will be updated to also reflect the US export statistics once Census releases the December 2020 data at a date to be determined.
Assessing progress toward meeting the phase one targets for goods trade requires information from both Chinese import statistics and US export statistics, given that the agreement's Chapter 6, Article 6.2.6 states "Official Chinese trade data and official US trade data shall be used to determine whether this Chapter has been implemented." One implication is that there are two sets of data to track (Chinese imports and US exports). A second is that there are two different annual targets, since the 2017 baseline level of Chinese imports differs from the 2017 baseline level of US exports. Finally, the products covered by the purchase commitments are set out at the 4-, 6-, 8-, or 10-digit level in the agreement's Attachment to Annex 6.1; these are then mapped to the US or Chinese trade statistics for 2017 and for 2020. Starting with our report of October 26, 2020, we have included US export product 8800 (in addition to 8802, aircraft) in "covered manufacturing" and the total, shifting it out of the "uncovered" category.
For Chinese goods imports, the deal is estimated to cover products that made up $109.2 billion, or 71 percent, of total Chinese goods imports from the United States ($154.9 billion) in 2017. Of the 2017 total imports of covered products, imports worth $24.1 billion were in agriculture, $78.3 billion were in manufacturing, and $6.8 billion were in energy. Uncovered products made up 29 percent ($45.6 billion) of total Chinese goods imports from the United States in 2017.
For US goods exports, the agreement is estimated to cover products that made up $95.1 billion, or 73 percent, of total US goods exports to China ($129.8 billion) in 2017. Of the 2017 total exports of covered products, exports worth $20.9 billion were in agriculture, $66.5 billion were in manufacturing, and $7.6 billion were in energy. Products uncovered by the agreement—and thus with no targets for 2020—made up 27 percent ($34.7 billion) of total US goods exports to China in 2017.
For both the Chinese import data and the US export data, the 2020 phase one targets of additional trade (on top of 2017 baseline) are $12.5 billion (agriculture), $32.9 billion (manufactured goods), and $18.5 billion (energy). These targets are found in the agreement's Annex 6.1.
Note that prorating the 2020 year-end targets to a monthly basis is for illustrative purposes only. Nothing in the text of the agreement indicates China must meet anything other than the year-end targets.