At least not from Dr. Cowen.

China will have a trillion dollars in reserves by the end of the year. A bit sooner actually -- a SAFE official recently indicated that China's reserves will top $1 trillion by the end of September.  China's reserves are growing by around $250b a year, despite the best efforts of China’s government to encourage (controlled) capital outflows and to discourage capital inflows.   If – as has been widely reported – China keeps about 70% of its reserves in dollars, China is adding around $175b to its dollar portfolio every year. 

China’s goods exports will likely reach $900b by the end of the year.  That isn’t quite a trillion, but it is about as much as the US exports (looking only at goods exports).   And even if China’s pace of export growth slows a bit (Chinese export growth to the world is currently is around 25% y/y), China is on track to export more than a trillion dollars worth of stuff next year.

Apparently, though, that isn’t enough to impress Dr. Cowen.    He writes: 

“China is neither our leading trade partner nor the leading foreign investor in the United States.”

Both of Dr. Cowen’s points are technically true, but I still think they paint a misleading picture of China’s impact on US markets.  Let me explain why. 

My earlier examples looked China’s overall exports and its overall reserve growth, not its flows to the US.   But even if we look just at flows with the US, I just don’t quite see how China emerges as a bit player.