The Hot Zone
China's newly announced air defense identification zone over the East China Sea aims to shore up national security
Current Issue
· Table of Contents
· Editor's Desk
· Previous Issues
· Subscribe to Mag
Subscribe Now >>
Weekly Watch
Expert's View
Market Watch
North American Report
Government Documents
Expat's Eye
Photo Gallery
Reader's Service
Learning with
'Beijing Review'
E-mail us
RSS Feeds
PDF Edition
Reader's Letters
Make Beijing Review your homepage
Hot Links

cheap eyeglasses
Market Avenue

UPDATED: January 23, 2011 NO. 4 JANUARY 27, 2011
China's Rising Economy Aids U.S.

PROMOTION IN THE APPLE: A video promoting China is shown on screens (left) in New York's Times Square on January 17 (SHEN HONG)

The growth of the surplus remained slow until 2005. And compared with Germany, Japan and other big trading countries, China's trade surplus is miniscule. Since 1952, for instance, Germany has maintained a trade surplus for 58 consecutive years. At its highest point, the surplus accounted for 8 percent of German GDP. In addition, statistical differences, in conjunction with other factors, have led to the overestimation of the U.S. trade deficit with China for many years.

It is worth noting that although China has a trade surplus with the United States, this does not mean U.S. interests have been harmed. Actually, China is not the only side to benefit. It is the U.S. companies that have received most of the added value from importing products from China.

An article from The Economist said profits from the sale of an iPod, designed by the U.S. company Apple Inc., are not spread evenly. For an iPod that sells for $299 in developed markets, China's assembly factories earn $4, while U.S. companies earn $160 for design, transportation, warehousing and marketing.

Exchange rates are another key issue affecting China-U.S. cooperation. Some in the United States feel the renminbi is significantly undervalued and regard this as the main cause for the trade imbalance between China and the United States. They expect to expand exports and stimulate the U.S. economy through the appreciation of the renminbi and the depreciation of the dollar.

Since China adopted exchange rate reform in 2005, though, the renminbi exchange rate has risen by about 25 percent, more than the U.S. dollar, the euro, the Japanese yen or the British pound. Clearly, the argument the United States runs a trade deficit with China because the renminbi has been undervalued is completely groundless.

He Weiwen, Director of the Sino-U.S. Trade Research Center of the University of International Business and Economics in Beijing, said China's foreign trade surplus increased rapidly from 2005 to 2008. It was also in this period the renminbi gained 21.2 percent in value against the dollar, something that seems unlikely if the renminbi was really undervalued.

These two prominent issues are not the only points of contention, though. The United States has questioned China on numerous subjects, including anti-dumping and countervailing investigations, intellectual property protection and China's indigenous innovation policies. In recent years, these frictions have dramatically increased. If the problems are not properly resolved, they will not only create losses to Chinese companies but also directly hurt the interests of U.S. companies and ordinary people.


The United States is the largest developed country, while China is the largest developing country with the biggest emerging market. China-U.S. economic and trade cooperation has brought enormous benefits to both sides. They are at different stages of development and can conduct mutually beneficial economic and trade cooperation. This has all helped to establish a solid foundation for the stable and sustained development of their business ties.

The prospects of China-U.S. economic and trade cooperation are bright and wide-ranging. China is now in an accelerated phase of industrialization and urbanization. Meanwhile, it is accelerating the transformation of its economic development mode and promoting economic restructuring. Furthermore, it has labeled the expansion of domestic demand as a long-term strategy. This will unleash huge investment demand, as well as consumer demand, over the next five years.

In addition, China is the world's biggest exporter and second biggest importer. It is expected to become the world's largest domestic consumer market by 2020. For U.S. business circles, this undoubtedly means better market opportunities and more room for development.

Take Motorola for instance. It has a research and development investment of about $1.5 billion and more than 2,700 research staff members in China. "The quicker China develops, the more opportunities we have," Chairman of Motorola (China) Electronics Ltd. Ruey-Bin Kao said. "Motorola is very optimistic about the Chinese market, and expects to participate in China's innovation."

It is reported big multinational companies, including GE, IBM and Coca-Cola, are actively involved in and supporting China's economic restructuring, energy conservation and greenhouse gas emissions reductions, in order to obtain opportunities.

The Chinese Government will continue to seek a balance between imports and exports. It will strengthen reform and innovation to facilitate investment, striving to create a more optimized and more open investment environment. In this way, enterprises from all other countries can share in China's growing market.

   Previous   1   2  

Top Story
-Protecting Ocean Rights
-Partners in Defense
-Fighting HIV+'s Stigma
-HIV: Privacy VS. Protection
-Setting the Tone
Related Stories
-A Search for Common Ground
-Continuing Adjustments
-The Trade Ties That Bind
Most Popular
About BEIJINGREVIEW | About beijingreview.com | Rss Feeds | Contact us | Advertising | Subscribe & Service | Make Beijing Review your homepage
Copyright Beijing Review All right reserved