BizChina

A decade ago, China wasn't the top trading partner for even one of the Group of 20 economies. Today, it's the biggest trading partner for six (Australia, Japan, Korea, India, Russia and South Africa), has replaced the U.S. as the top export market for a seventh (Brazil), and risen in import for the rest.

"When somebody writes the history of our time 50 or 100 years from now," says Lawrence Summers, the Harvard University economist and former Obama aide, "it is unlikely to be about the Great Recession of 2008…or about the fiscal problem that America confronted in the second decade of the 21st century. It will be about how the world adjusted to the movement of the theater of history toward China."

China's growth is felt in nearly every corner of the globe—in ways not always welcome. Its rise as a trading power is reshaping other economies, shifting national business models from manufacturing back to raw materials, pushing currencies in sometimes unwanted directions and prompting worries about wages in the U.S.

China, which reported a trade deficit for February in part because of the timing of the Lunar New Year, said exports for the first two months of this year ran 21.3% above year-ago levels; imports were up 36%. The U.S., meanwhile, said Thursday it ran a bigger trade deficit in January with China than with any other country. In January, at current exchange rates, China's global exports were 35% greater than U.S. exports; its global imports 14% smaller.

While China's official statistics may inflate the value of exports by underestimating the value of imported components, signposts of its trade heft are plentiful.

There can be little doubt that last fall’s gambit of halting exports of rare earths to Japan as punishment for arresting Chinese seaman has spectacularly backfired on China. The recklessness of that action sent shock waves through the boardrooms of every Japanese company that has come to rely upon China not just for raw materials, but for intermediate parts and, of course, for finished goods.

It is hard to imagine anything more detrimental to the continuing development of Japan-China trade, as well as for Japanese investment in China in ventures producing for overseas markets. In the months following the rare earths “shock,” the Japanese press carried numerous reports of companies planning to reduce sourcing from China, reconsidering investments, and even of selecting new product technologies that do not rely on rare earths. Several sogo shosha (general trading companies–the swashbuckling global “special forces” of corporate Japanese) opening talks to invest in rare earths mining in Vietnam and other countries. Even the Japanese government responded by initiating discussions with some countries for bi-lateral sources agreements.

At the same time that the Chinese government halted rare earths shipments, a number of Japanese companies manufacturing in China, notably the auto markers, began to experience labor troubles. Workers’ representatives demanded high wages and threatened strikes. Local officials seemed eager to support the workers against their foreign, particularly Japanese, employers. Not to be outdone,Wen Jiabao, the Chinese premier, weighed in with a statement about how foreign firms should be sympathetic to the demands of local employees.

General Motors Co. executives, on a visit to Beijing by new Chairman and Chief Executive Dan Akerson, said the U.S. auto maker is seeking opportunities to boost exports of its cars made in China despite the impact of a rising yuan, and that it plans to sustain its growth within China's market by launching more than 20 new or redesigned cars here over the next two years.

GM's CEO says China represents the highest growth area for years. Above made-in-China Buicks at an auto show in Haikou, China, in September

"China is central to GM's global strategy," Mr. Akerson told a news conference in Beijing on Tuesday. The GM chief said the company has 11 joint ventures in China with two of its primary local partners, SAIC Motor Corp. and FAW Group Corp. "We regard our 11 joint ventures as 11 keys to success, not just in China but globally."

Tim Lee, president of GM's international operations, told the same news conference that GM "will look at every export potential" out of China, such as shipping vehicles to South America or Southeast Asia, even though an appreciating yuan makes the endeavor "marginally more difficult."

China's State Council laid out long-awaited rules and procedures for national-security reviews of foreign mergers and acquisitions.

The government's intent to establish a formal process for reviewing national-security issues around international deals has been known since 2008, when new antitrust legislation went into effect. On Saturday, a government statement outlined the specific procedures for the first time.

Under the rules, China's National Development and Reform Commission and the Ministry of Commerce, the two ministries that already review mergers under the antitrust rules, will lead the new national-security-review committee.

The committee will review mergers and acquisitions targeting key companies in the defense, agriculture, energy, resources, infrastructure, transportation and equipment-manufacturing and technology industries, the statement said. It will apply a broad definition of national security, assessing the impact of deals on economic stability, social order and China's ability to research and develop key technologies for national defense, according to the rules.