Papers list

• Discusion about The Trade between China and USA

There are two milestone marking important stages during the development of international trade from China:
- Capital from Honkong, one of the most important financial centers in the world, rush into mainland China to establish a strong manufacture industry while China open its door to outside earlier in 1980's;
- Later in 1980's, a number of multinational companies, especial from US, Japan and Europe began to invest in China when the policies for foreign investors became more and more attractive and favorite, and there was a sign that a huge potential market was appearing.
Until now, investment from outside of mainland China has still kept increasing. Meanwhile, many small-scale exporting-orient enterprises in favor of cheap labors in countryside rose rapidly.
All of them support international trade from China mostly, and contribute to Chinese economic progress to a rather high extent.

II. Both China and US benefit from trade between them

Both China and US benefit from trade between them, in spite of the deficit for the US. In one hand, China has succeeded in developing US as their biggest oversea market for its commodity exporting. At the same time, a numbers of job opportunities are provided in the world most populous country from trade between China and the US.
The revenue from its international trade surplus enabled China to import a large variety of commodities from the US to meet the need from a large amount of consumer from people who became rich to enterprises which are longing to reform its technology, moreover promote its competition in global market.
On another hand, American buys 70% their low-end consumer goods from China. In fact, economists say, getting access to inexpensive Chinese-made toys, shoes and other products has helped U.S. consumers and kept inflation under control. Meanwhile, they are successful in marketing high-value-added goods to China. Boeing, for instance, announced a deal in June to sell 10 737 jetliners to China - in addition to 50 aircraft China ordered last October. Combined, the orders are worth $3.4 billion. Boeing cited a government report that every $1 billion in aircraft exports supports 11,000 U.S. jobs.
Both China and US have a common business profit from trade between them.

III. Dispute from different standpoint

1. Trade deficit with China was nearly $50 billion in 1997, and nearly $57 in 1998. The U.S. still exports less to China (population: 1.2 billion) than it does to the Netherlands (16 million).
2. Though China benefit from the biggest trade surplus with the US. But its exports are mostly low-tech, labor-intensive goods - toys, clothing and the like - not the high-end consumer products such as cars and electronics.
3. China suffer with the problem like resource consumption, environment pollution, etc. during producing to supply advanced countries the products that are restricted from producing in those countries. For example, the filter for the water purification equipment which is popularly used in industry and domestic in advanced countries is made of active carbon which mostly are imported from China.
4. At present, China is not able to open its market to a rather wide extent yet - Its huge state-owned companies, which employ most of the labor in urban, city and town, are grossly inefficient. It has to protect its state - owned companies and its peoples before its fragile competition is improved.
5. Many U.S.-based multinational companies, like Chrysler, GM, Motorola, Coca - cola, etc., build plants in China instead of exporting from the United States. There are good reasons to go that route: Chinese labor is inexpensive; locating in China cuts transportation costs, tariff and provides quicker access to the Chinese market. However, their sale in Chinese market is not included in trade between China and US, but their sale in US market is accounted in the statistics of exporting from China to US.
6. "Having a trade deficit with a country is not necessarily a bad thing," Says David DeRosa, adjunct professor of finance at the Yale School of Management. "We are able to buy a significant amount of goods from China at a significant price advantage."

IV. Solution

It is important to understand each other, particularly in the aspect of the feature of culture, life as well as industry and business. To develop Chinese market, more work is needed for those US companies, which are eager to get access Chinese market. It is imperative for them to understand China, moreover, to be understood by China. It should be learned what is doing and what is expected in China, and what those US companies are doing and what they are capable of doing.
Not argument, but cooperation. Auguring, which cause suspicious and disbelieving as well as make long - term strategic co - operated project impossible, is harmful to aggressive progress of trade between China and the US. " It's important that we stand for our own values, but that we consult them more and lecture them less." Says recently George Bush, former president of US.
China has been the fastest growing in the world for much of this decade. Its market is big and its savings rate is high, which is more than 40% only second to Singapore in the World. China is eager to import the high-tech commodity and equipment from the U.S. to activate its oppressive market and update its out-of-date industrial technology; China is eager to copy the effective financial and insurance principle from the U.S. to arouse its huge market potential; even China is eager to learn some advanced management philosiphy from the U.S. to deal with its domestic problem like embezzlement, corruption and degeneration. Attempts to improve trade between China and the US should be based on the future. A close cooperation will bring shine wellbeing to all the people in China and the US - the two counties among the greatest countries in the world.