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China and the United States Jimmy Thompson ECO 372 October 31, 2012 Douglas Holbrook China and the United States The United States would not be the country it is today without its major trade partners. International trades make up a large part of China’s economy, which is the same for the U.S. Both the United States and China share similar structures as far as the market system orientation of trade and economic systems. It is important that China and the United States work together to help the countries strengthen its economic state. China’s Economic Background China is proving to be one the fastest growing, major economies in the world, perhaps even the most dynamic. Since the country…show more content…
Some examples of popular imports are electrical machinery, toys and sports equipment, furniture and bedding, clothing/footwear, processed fruit and vegetables, juices, snack foods and spices. Currency Exchange Rate The current currency exchange rate from the Chinese Yuan Renminbi to a U.S. dollar is 0.160135 U.S. Dollar; therefore, one U.S. dollar equals 6.24472 CNY. Since America does so much trading and business with China, they are extremely attractive to us as a partner of trade. China has purposely kept their currency weak to continue the business they receive from the United States. Big Mac Index In Accordance to the Big Mac Index, if the Citizens of the United States were to travel to China, they would be able to spend less US dollars since Chinese currency is very weak, thus making China very affordable for Americans. Since China has continually weakened their currency in order to remain an attractive trade partner with the United States, it has allowed Americans to travel to China knowing they can get more for their money. In other countries, such as the UK, it would be much more expensive for Americans to travel, as their currency is stronger. Affects of 40% Tariff on Main Export If the United States were to impose a 40% tariff on aircraft, which mainly is constructed here in Washington State, it would surely cause hardship on China. In recent years, China has

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