U.s. China Bilateral Trade And Policy Implications

The United States presently in a tightly knit and powerful economic relationship with China. Reason being the US economy depends heavily on foreign capital, in particular the Renminbi-Yuan.

National economics are often adversarial in nature, a global contest where countries seek to gain advantage over their neighbors, all in the name of wealth and gain. America is no stranger to the game; the U.S. has been the world’s economic leader for the better part of a century. China, however, is the leading contender for the economic top-spot (), and America continues playing directly into China’s hand. America’s current trading posture with China is drastically skewed in China’s favor; if America is going to preserve its position as the leading economic power, existing U.S.-Chinese trading agreements will need to be revised, and additional regulations must be introduced to promote balanced dealing.

China’s monthly trade balance trend is clear; from 2004 China´s surplus was increasing rapidly, the peak was reached in 2008 before the financial crisis started. Many economist and experts in world trade have been carrying out studies in order to understand the real influence of the forces creating the China- U.S bilateral trade surplus. Morrison (2009, pp 2) as well as Lardy (2008, pp 12) are concerned about how the Chinese government is overcoming the current global crisis by the manipulation of its currency. In addition, another fundamental cause of China trade surplus with U.S is the Chinese excess savings (ART 9 PP 5, ART 7 PP9)

In this paper we will be looking at the trade balance between the U.S. and China. The trade balance between China and the United States will be determined for the most recent past five years. The trend will also be illustrated using a graph and will offer the insights into the trade balance between these two countries. The impact of foreign trade will be analyzed, to include the two countries economic growth during the selected period, 2009 to 2013. The issues, concerns and ramifications on China’s economy will be discussed, along with the issues, concerns and ramifications on the United States economy. The nature and possible future effects on the Unites States economy, in direct result of the trade with China will be discussed in detail. This will also include the United States ability to sustain any growth and development.

For many years America has been considered one of the most powerful nations in the world. Along with having a strong army and navy force. America is also known for it wealth and the use of fossil fuels. China on the other hand got their money from the profit of other countries buying products from them. It is known that the U.S and china have a long history but in today’s economy America has been in a lot of recessions. Meanwhile in china still makes money off of the U.s from buying products and the debt that the U.s is in from borrowing money from china in the past. There are so many ways the U.S can approach this problem they could strengthen their alliance in Asia, economic pressure, and find a way to co-operate with each other.

One of the major ways that China is affecting the world, and particularly the U.S., is the exchange rate. Devaluation, the official lowering of a country 's currency within a fixed exchange rate system, has boosted China 's exports in the past several years. It has also caused Chinese-made goods to be much less expensive, and U.S. imports, as well as imports from other countries, to become more expensive. Although China’s economy is benefitting from this change, other countries such as the U.S. have been greatly impacted.

The following paper coherently illustrates the trade patterns of USA and China and describes the various trade policies developed over the past years that have impacted the respective economies of both countries alongside the effect of the same on the bilateral trade relations between the two. Based upon the previous statistics, US-China trade is considerably one of the largest trading partners in today’s economies. Both countries’ trade relations entail exchange of investment, services as well as goods varying from agricultural products to non-agricultural products. Currently, China is the second-largest trading partner, third-largest export market and the biggest source of imports for the United States. The U.S. government’s debt purchased by China provides US the benefits of low interest rates (Morrison, 2015). While for few this economic relationship is considered to have a positive effect as it helps to fund the U.S. economy, for others it is an attributable concern that China may gain more power over the U.S (Loc.gov, 2016).

Decades has passed since U.S. and China established formal diplomatic relations. The two countries have faced the pressures of economic transformation, social and political standoffs, and now have moved to a new stage of complex mix of diplomatic issues, differences in values, and increasingly intertwined economy. If the U.S. and China to improve their achievements made in the past, then the U.S. – China relation is likely to surpass the contradictions in cultural, political, economic and social differences, and seek to maximize the mutual benefit for both and work together to shift the focus to making greater

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.

For the past twenty-five years, China has witnessed an overall increase in its domestic growth (Fischler 148). According to the article, “The Rise of China as a Global Power,” by Dr. Rosita Dellios, China “is the world's fourth largest trading nation, rising from 32nd in 1978 to 10th in 1997.” Similarly, China’s GDP is also second to the United States of America, generating 13 percent of the world’s output (Dellios). Since China’s introduction into the World Trade Organization in December 2001, its average tariff dropped from 41 percent in 1992 to 6 percent in 2001, becoming one of the most open economies in the world (Dellios). China is also the world’s fastest developing economy, obtaining an annual growth of 9.5 percent through foreign

China’s recent rapid economic growth has astounded countries around the world, including the U.S. Domestic policies that improved incentives for economic competitiveness were one of the main reasons that China was so successful in increasing its Gross Domestic Product (GDP). “The combination of Chinese land and labor with the capital and expertise of Taiwan and Hong Kong industrialists provided a particularly important boost to exports and employment during the first decade of reform.” China attracted investments from multi-national corporations, which further contributed to China’s revival as a great trading nation.

China’s economic growth is expanding at a great pace, while other countries may be at a standstill. China has been the world 's fastest-growing economy. One of the main stimuli twelve years ago was the release of Hong Kong to China from Great Britain. The second largest stimulus was the opening of free trade with other countries, in which China was originally a closed trade country. Foreign trade and investment have played a crucial role in the growth of the

Through an economic standpoint, “the U.S. approach to its economic relations with China has two main elements: integrating China into the global, rules-based economic and trading system and expanding U.S. exporters ' and investors ' access to the Chinese market” (U.S. Relations). The United States stands at a national deficit of approximately $19,231,466,800,000 and counting (U.S. National Debt). On the other hand, China suffers with a $5,385,184,290,350 national debt (NationalDebtClocks). To put things into perspective, from those 19 trillion, the US owes about 1.16 trillion to China (Wilson). The dependency is clearly there. Countries do not merely borrow money for the sack of borrowing money, rather from a place of necessity to attain what money may be able to offer its citizens. China benefits from having the US be in debt to them in more ways than one. For starters, all countries want its denizens to be employed because only then, could they

As one of the great producing nations on this planet, China needs to maintain open and free trading throughout the world. This open trading and globalization has greatly benefited China as jobs are created and wealth and power sees unprecedented growth in the country (Wang 234). Beyond increasing prosperity, China’s trade network has given the CCP the opportunity to “borrow the institutions and emulate the practices of the industrialized

China is a country with huge resources. In 2001, China successfully joint the WTO and rapidly took an important role on the international trade. In late 1990’s, China signed an agreement with Australia and built a close relationship with Australia. In the following years to date, there is a huge changes on the performance of trade and investment between these two countries, especially on agriculture, mining and manufacture. In this article, we will use trade theory to analysis the reason of changes of trade and investment performance after the development of policy.