SINGAPORE (Sept 3): As an import specialist with the US customs in the 1990s, Alex Capri watched the rise of China as an export powerhouse from a front-row seat. “I would see an invoice for containers of shirts coming in from Guangdong in southern China. The invoice value would be US$6 to US$7 [per shirt]. And then, I would see the shirts hanging in a store, and they would be priced at US$30,” recounts Capri, who is now a visiting senior fellow at the National University of Singapore business school.

See also: Opportunity for investors as China, Asia flounder in face of Trump trade war

Two decades on, the US is a massive consumer of goods imported from China. In 2017, the US ran a US$566 billion ($773.27 billion) trade deficit with the rest of the world (see Chart 1). Some US$375.2 billion — or more than half — arose from the goods deficit with China. In turn, China holds nearly US$1.2 trillion of US Treasury bonds, making it one of the biggest creditors of the US. The trade imbalance has been attributed by US President Donald Trump to unfair trade practices by China, including alleged intellectual property theft and currency manipulation. And, he has been waging a trade war of sorts, which has financial markets in Asia trembling.

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