Sino-US Trade Molds a Win-Win Deal

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Last updated at: (Beijing Time) Wednesday, September 04, 2002

Sino-US Trade Molds a Win-Win Deal

US-China Security Review Commission under the US Congress on July 15 brought out an annual report as the first ever with an all-sided assessment of Sino-US relations made since its inauguration October 2000.

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US-China Security Review Commission on July 15 brought out an annual report as the first ever with an all-sided assessment of Sino-US relations made since its inauguration October 2000. Pointing to a US trade deficit, an "ever-increasing reliance" on China and other problems as bringing great "pressure" on the US, the report suggests that the US Congress monitor on US-funded enterprises in China and continue under "Superb 301 Article" to limit US hi-tech exports to China. The report as falsified on its own obviously drew an unreal conclusion detrimental to the development of Sino-US economic relations.

Why Sino-US trade imbalanced

Since the 1990s Sino-US trade deficit had increasingly become a major problem in bilateral trade relations.

Statistics by the Chinese side had attested a trade deficit by China during the 14 years 1979-1992 and since 2000 it became the biggest deficit country of the US. Meanwhile, statistics by the US represented a surplus on the US side 1979-1982 and a deficit by the US in 1983 and from 1994 on China became America's biggest deficit country replacing Japan.

Premier Zhu Rongji ever delivered a speech at the Massachuset University on his US visit in 1999 during which he talked about Sino-US trade deficit by relying on strength of detailed data and convincing analyses.

First is US trade deficit drawing largely on greatly bloated data. Second is China's export that brings no competition to US industry. Third, China's exports to the US are mainly processing making 70% of the country's export total. Needless to say, increased Sino-US trade deficit is just a transfer of Japan and Korean's exports to the US. Premier Zhu's views had won famous economists' full accord.

On top of those underling Sino-US trade deficit as said above, the largest barrier ruling out Sino-US trade balance is due to America's controls on its China export.

As a matter of fact, the trade deficit does not necessarily bring losses to the US, nor have great benefit gains been implied to China.

In spite of a trade surplus by the Chinese side there is no big gains to speak of. Hong Kong, Taiwan and other foreign trade counterparts become direct beneficiaries from a Sino-US trade surplus.

Moreover, trade imbalance between China and the US will not last long. According to experts, by 2010, Sino-US trade deficit will turn small, by 2015, the two countries will strike a balance by their bilateral trade. If the US loosens its control on hi-tech exports to China, onemust believe this process will be much greatly shortened.

No one can get away from each other

Since the two countries resumed diplomatic ties in 1972, bilateral ties have witnessed rapid growth. By the end of this June, US investment projects in China numbered 35362 to a worth around 72.48 billion USD. America has become China's biggest investor over 3 consecutive years. Economic relations between the two have formed a mutual reliance pattern.

Although Sino-US trade has witnessed rapid growth, during 1999-2000, America's direct investment in other countries had exceeded 830 billion USD, leaving merely fragmented 28.11 billion USD or 3.4% of the total investment in China.

China's mainland has become America's fourth largest trade partner, China's exports to the US make only 21% of the country's export total. China's reliance on the US has far exceeded the latter on China. America's economic growth or decline claims a very significant part in China's export.

Mutual reliance by China on the US or vice versa is the inevitable outcome of economic globalization. In this sense, the influence exerted on both sides could be accepted.

Win-Win trade relations

Negative views by some people in the US report are that America is an important mainstay boosting a China's economic growth, that America's role in China's economic growth had reacted negatively on America and that grave impacts have been exerted by Sino-US trade on America's security, etc. To be in brief, in the view of the Sino-US Security Appraisal Committee, there is no benefit to be reaped by the US side from developing Sino-US trade ties.

But everything has two sides, the report only sees the negative side instead of the positive side exhibited.

Facts tell us that Sino-US ties have boosted the two countries' economic development not to say increased job opportunities by each side. This is a win-win deal and is by no means one-sided but bilaterally reciprocal.

A famous American gave his view on international issue that "China poses no direct threat to the US" and that economic businesses are in no way a game in which one benefits while the other loses. This is to say by one country becoming prosperous is not necessarily meant its counterpart must go through the same process of decline."

By PD Online Staff Li Yan

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