NICE AND INEXPENSIVE: A shopper browses the shelves at a New York store where clothes made in China are sold (WU KAIXIANG)
Less than a month into the New Year, many large U.S. companies have already introduced new plans for investment in China. For instance, General Electric (GE) plans to invest more than $2 billion in China to strengthen its research and development, establish innovation centers and start new joint ventures. Procter & Gamble will invest at least $1 billion in China in the next five years. Ford said it would continue to increase investment in China in 2011. Starbucks has also confirmed a plan to increase the number of its coffee shops on the Chinese mainland to 1,500 by 2015.
The United States can reap huge benefits from economic and trade cooperation with China, said a People's Daily article published shortly before Chinese President Hu Jintao's state visit to the United States on January 18-21. Edited excerpts follow:
Currently, China is the United States' second biggest trading partner and fastest growing export market. Based on the latest data from the General Administration of Customs of China, China-U.S. trade volume reached $385.34 billion in 2010, up nearly 30 percent from the previous year. The value of China's imports from the United States hit $102.04 billion, up 31.7 percent.
Through the rapid growth of exports to China, the United States has benefited from China's economic growth. The benefits can even be seen on a smaller level, as China is a top-five export market for 40 of the 50 U.S. states. In the past decade, U.S. manufacturing and agricultural exports to China have increased by 330 percent, while the exports to other countries and regions of the world have increased by just 29 percent. China has become the United States' largest single overseas market for soybeans and cotton, and an important export market for cars and aircraft, as well as other mechanical and electrical products.
By the end of 2010, U.S. investment projects in China had numbered more than 59,000, with an actual input worth more than $65 billion. China has gradually become a profit center for U.S.-funded enterprises.
According to a survey by the American Chamber of Commerce in China, 71 percent of U.S. companies in China made a profit in 2009, and 46 percent of the respondent companies said their profit margins on the Chinese market were higher than their global profit margins.
What's more, in the 10 years since China's entry into the WTO, the 100 service sectors that China promised to open up have all seen investment from U.S. companies. In the last decade, U.S. service providers have made major profits in China, especially in accounting, banking, insurance and securities sectors.
U.S. imports—inexpensive, high-quality Chinese products—have greatly improved the lives of U.S. consumers, especially those in middle- and low-income groups.
Based on research from Morgan Stanley, the average American citizen saved more than $300 in 2009 by purchasing Chinese products.
In addition, economic cooperation with China has effectively created job opportunities in the United States. In a speech in January 2010, U.S. Secretary of Commerce Gary Locke said for every 1-percent increase in U.S. exports to Asia, 100,000 U.S. jobs are created. Based on this estimate, U.S. exports to China created 2.57 million new jobs in the United States between 2001 and 2008.
Many large Chinese companies investing in the United States, such as the China Ocean Shipping (Group) Co., the China National Petroleum Corp. and Lenovo, have been providing job opportunities to local people. Since establishing an industrial park in South Carolina in 1999, Chinese home appliances producer Haier has created thousands of jobs for local residents.
The development of China-U.S. economic and trade cooperation results from the deepening international division of labor against the backdrop of globalization. During this process, the United States' own advantages have been strengthened. The combination of U.S. capital, technology and management advantages with Chinese labor resources has enhanced the international competitiveness of U.S. products and companies.
Take computer manufacturing for example. In 2008, China produced 150 million computers, but their CPU chips were all imported from U.S. companies like Intel and Advanced Micro Devices.
China is now the largest holder of U.S. Treasury bonds. As of October 2010, China held as much as $906.8 billion worth of U.S. bonds. During the international financial crisis, China did not sell the bonds, but bought more. In this way, it helped the United States to maintain financial market stability, ease the credit crunch and promote trade financing.
Despite the huge benefits of cooperation with China, dissatisfied voices in the United States have never fully quieted.
China's trade surplus with the United States has been a common bone of contention, as some Americans feel the surplus is too large. But China has not had a trade surplus for long and the one it does have is fairly small, often accounting for less than 3 percent of GDP.