Exam 3: Global Supply Chains

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The global data presented in this section reflect this new era.Table 3-1 presents trade data (total of imports and exports)for the top 10 U.S.trading partners.Some interesting and important relationships depicted in Table 3-1 should be noted.China is now our second largest trading partner,supplanting Mexico,which historically has been number 2.The trade volume with China was 18.2 percent of the total of the top 10 for 2006,and it increased its trade volume by 20 percent between 2005 and 2006.
In 2000,China was number 4 on the top 10 list following Canada,Mexico,and Japan,and its trade volume with the United States has tripled since that time ($343 billion vs.$94 billion).The total value of trade with these top 10 trading partners increased by 10.7 percent from 2005 to 2006,and since 2000 it has increased by about 53 percent in total value.Both of these percentage increases are reflective of the growing interdependence and the trade relationships with other countries.
India was mentioned in Chapter 1 in the context of globalization but does not appear in the top 10 countries listed in Table 3-1.India's strength has been in the area of information technology services,which tends to understate its importance for global supply chains.In 2005,59 percent of U.S.corporate spending (off-shore)for information technology services was spent in India.Interestingly,China,which is known for manufacturing various types of products,is attracting U.S.companies to establish research centers.Microsoft and Intel established research centers in Beijing in 1998,Google in 2005,and Rohm & Haas and Dupont in Shanghai in 2006.The combined population of China and India,which is in excess of 2 billion people,makes them attractive as markets and as a source of imports.