China And China Case Study

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Therefore, the goods of Chinese origin, shipped to third countries, are regarded by the US statistics as exports to the US from China.
3) Contrasts in the valuation of direct exchange
According to the "Joint China-U.S. Investigations of Discrepancies", some of the distinctions in the information on the US imports from the PRC and Chinese fares to the US are explained by the changes in sending out costs from China and import costs in the US for products transported directly from one state to the other. Part of these differences is associated with the transfer of property during the delivery, which leads to a price premium when the owner changes (Xu, 2012).
The publication of official statistics on the US trade is often accompanied by an …show more content…

Moreover, the relationship between the US and China, despite the abundant political rhetoric, is economically considered so harmonious that many experts talk about the economic symbiosis of these two countries. Thus, the interconnectedness and interdependence of the US and China give rise to a version called the "two-headed dragon." The main idea of this version is that in the 21st century there will be two superpowers in the world: the USA and the PRC. The main geopolitical factors that determine the world's future will be G2 - China and America, and not the G20 - the "Big Twenty" or the "Group of 20" (Dong, & Whalley, 2012).
The symbiosis of the two economies, in the most general terms, can be defined as follows. American corporations have been transferring their production to China for many years, actively using the Chinese "open door" policy. The benefits for the corporations are obvious - the Chinese labor force costs ten, twenty, or even fifty times cheaper than the actual US workforce, so that labor costs and the production costs (which can reach 50% for individual goods) are sharply decreased. The fall in prime cost entails a rise in profits, so the profitability of corporations that have transferred their production to China goes beyond all reasonable limits. Moreover, the financial world crisis served as an impetus for this process to acquire a global meaning.

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