US special interests threaten delicate balance of trade
- Source: Global Times
- [21:45 July 25 2010]
- Comments
Illustration: Liu Rui
By Li Wei
On June 23, 2010, the US Senate Committee on Finance held a new set of hearings on Sino-US trade relations.
Committee Chairman Max Baucus said that the Sino-US trade imbalance was the core issue of the hearing, and he required the relevant government departments to use strong unilateral actions to solve the imbalance caused by China while enhancing cooperation and seeking multilateral channels.
Economic and trade links are an important component of Sino-US bilateral relations. At present, as well as being each other's second largest trade partner, the US is China's fourth largest source of foreign investment and China has become the largest holder of US treasury bonds. Both countries have benefited significantly from bilateral trade and economic cooperation, resulting in the coexistence of two major world powers with different political systems and ideology.
The normalization of Sino-US relations and China's reform and opening-up were basically synchronous. Bilateral economic and trade relations played a significant role in China's integration into the world, promoting China's economic growth and accelerating China's modernization process.
In the past decade, China joined the WTO and became the fastest growing export market for the US. In the global production network, China is a medium and low-end manufacturing base as well as the fastest growing consumer market, while the US has the most advanced high-end manufacturing and modern service industries and is still the world's largest and most mature market.
Sino-US economic and trade cooperation has provided new space and depth for the development of the US. About 90 percent of US manufactured goods are no longer domestically produced.
According to data from the US Consumer Product Safety Commission, 40 percent of US consumer goods come from China. On this basis, the US can take advantage of its money, technology and innovation in the development of IT, aviation and aerospace, equipment manufacturing, bio-technology and other high-end manufacturing.
China's economic growth and increased import demand have enabled many US products to enter the Chinese market, while the expanded exports to China have also extended the life of many products and designs. Since 2001, US exports to China have increased threefold.
Although US exports fell 18.7 percent in 2009 and the exports of 49 states have decreased, 23 states have maintained growth in exports to China. In 2008, sales of US-funded enterprises in China amounted to about $218.9 billion, more than three times the US exports to China that year. Chinese consumer goods exports to the US and the purchase of US treasury bonds also help the US maintain a low inflation and interest rate.
The greatest challenge to the Sino- US economic and trade relations is not from the internal economic system but from the interference of political activity and political goals.
