The ONLY reason a nation exports, is to import.

Many people today have forgotten what world trade is all about. These are the people who say or write things like "export-driven economy" and "devalue the currency to drive export". They think that you can build a wealthy society using an export model. Well, they're partially right.

You see, export is essentially the same as import. To export is to import. This is what TRADE is about: You send your goods abroad, and get foreign goods in return. When you throw currencies into the mix, it confuses things very very easily.

People think that you can cheapen your currency and therefore sell/export more to the world. They forget the other side of the equation: Your cheaper currency will make imports more costly. They also forget that the other nations can just as easily cheapen their currencies. They also ignore the fact that there is practically no historical evidence that a cheaper currency drives exports.

People think that it is great to build up gigantic trade surpluses by exporting. They forget the fact that you are just merely sending your goods overseas in exchange for PAPER money. It is okay if the paper money doesn't lose value overtime, but in the current central-banking era of human economic history, don't place your hopes on that happening.

You are sending your goods/services/productivity abroad, and what do you get in return? If you spend your export 'money' immediately to import, then that's okay - because the 'money' has not lost value. If you save up your export 'money' for later use, you will get lesser in return. Because the currencies lose value and buy less goods over time.

People also forget that by cheapening your currency (by printing money), you create inflation at home. True, those export companies that you try to help will have more sales overseas. But at what cost? Your people LOSE purchasing power. Prices of goods at home rise. Costs of imports rise. So, when people want to devalue the currency to increase export, this is nothing more than a transfer of wealth from the citizens to those few exporting companies.

I have a hard time explaining to people that you don't want to export just for the sake of exporting or accumulating paper money. You have to import too, either now, or later in the future. But you have to import eventually. Otherwise you are just sending your goods overseas in exchange for NOTHING (ok, you have some pieces of paper money). There's no such thing as perpetual export and no import. That's SELF-IMPOSED slavery. Or that's like sending TRIBUTES to a foreign power. :)

So, in closing, the ONLY reason a nation exports, is to import.

P.S. China is a manufacturing-driven nation, not an export-driven nation. So don't lose sleep over the fact that their exports will go down. They can easily consume what they produce, instead of sending their goods overseas in exchange for paper.