About 12% of world trade is in product groups where a single country has a share of more than 50% of exports of that product. This includes over 1000 product groups and about half of which originate in China. By contrast, the United States, which ranks second in terms of number of commodity groups, has about 100 items where it had a share of more than 50%.
We have analysed the nation country shares of about 8000 product groups at HS6 commodity level. We have included primarily, intermediate and finished capital goods. Depending on whether we analysis import or export data the number of product groups where an individual country has a share of 50% or more of values varies between 1000 and 1400 product groups, but China comes out at about half of all product groups in both cases. In 2021, China’s overall share of world exports was about 14%, but excluding raw materials it is almost a quarter. See also our article on the changing importance of China in world trade.
The three figures below show an overview of the country shares of exports for 24 different product groups. These include raw materials, agricultural goods, intermediate, capital and final goods.
Dependence entails risk. Reliance on a single supplier or source for imports of a certain raw material or intermediate product makes supply chains vulnerable to disruptions and geopolitical tensions. Think cobalt – the Democratic Republic of Congo is responsible for the vast majority of all cobalt and cobalt ores. Or Semiconductors – Japan exports for more than 50% of equipment used for manufacturing semiconductor boules or wafers.
Equally, being reliant on a single or very few destination markets creates risk for exporters. Think Australian wine – in 2019 38% of Australian wine exports went to China, in 2022 it was less than 1%, due to sanctions imposed on a range of Australian exports in 2020. Australia did not find sufficient substitute markets and as a consequence total wine exports in 2022 were 30% lower than in 2019.
Concentration does not always matter on a import level where there is substitute product or where purchases are discretionary. Over 80% of automatic wrist watches come from Switzerland, but you don’t really need to buy (another) one, do you? Of course, from the perspective of Swiss exporters it’s a different story. About 24% of those watches go to Mainland China and Hong Kong, so if consumers there stop buying that creates a revenue problem for watch manufacturers.
However, some components are so critical that a shortage can reverberate through the entire world economy. For example, the shortage of semiconductors that the world has faced over the last three years has affected production across almost all manufacturing industries including computers, phones, household goods and particularly automotive sectors. Japanese vehicle exports in 2022, for example, were 21% below 2019 levels. This is not due to lack of demand, as used car prices show.
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