Two features-increasing friction with occasionally sharp conflicts as well as rapid growth and mutual benefits-remained prominent in China-U.S. economic and trade relations in 2007.

According to China Customs statistics, from January to October 2007, China-U.S. trade totaled $248.2 billion, an increase of 15.7 percent over the year earlier period. Exports to the United States reached $191 billion, a 15.2-percent increase. Imports from the United States totaled $57.2 billion, a 16.3-percent increase. And China's trade surplus with the United States registered $133.9 billion, a 15.1-percent increase. The total trade value of the whole year is estimated to exceed $300 billion. China's imports from the United States is expected to reach close to $70 billion. Its trade surplus with the United States is projected to near $160 billion, posting a notable reduction in its current growth rate.

According to U.S. Customs statistics, from January to October 2007, China-U.S. trade totaled $318.6 billion, an increase of 13.4 percent over the same period of 2006. Exports to China reached $52.5 billion, a 16.3-percent increase. Imports from China were $266 billion, a 12.8-percent increase. And America's trade deficit with China registered $213.5 billion, a 12-percent increase. The total trade value of the whole year is estimated to approach $390 billion. America's exports to China is expected to amount to $63.5 billion, whereas its imports from China is expected to hit $320 billion. Its trade deficit with China is projected at about $256.5 billion, posting a reduction in its current growth rate.

U.S. Customs statistics also indicate that China replaced Canada as the largest source of American imports in the first 10 months of 2007. It also surpassed Japan to become America's third largest export market. Among its major trading partners, the United States had the fastest export growth to China.

With the rapid development of China-U.S. economic and trade cooperation, economic and trade frictions periodically surface. Political factors obviously have interrupted the smooth development of bilateral economic and trade cooperation.

On December 14-15, 2006, during the first session of the China-U.S. Strategic Economic Dialogue (SED), U.S. Treasury Secretary Henry Paulson said the main issue of the SED was exchange rate of the yuan, the Chinese currency. This demonstrates that the Bush administration strongly demanded a large appreciation of the yuan to reduce its trade deficit with China. During a Senate Banking Committee hearing on February 7, 2007, Paulson said the Bush administration, facing the ever-growing U.S. trade deficit, had exerted its efforts to urge the Chinese Government to quicken its pace of letting the yuan appreciate. China had not yet worked out a package of monetary policies that the United States anticipated and needed, he said. Paulson threatened that if China did not hasten its yuan reform, the international community would lose its patience.

The exchange rate issue remained the focus of the second session of the SED held on May 22-23, 2007, in Washington. At a press conference on May 24 after the meeting with the Chinese delegation, Bush said one of the issues that the U.S. side had emphasized to Vice Premier Wu Yi and the Chinese delegates was that the United States was very much concerned about whether China would allow the yuan, also known as the renminbi, to appreciate.