Astable China-U.S. economic and trade relationship is more important than ever.“The U.S. commits to accord China fair treatment in the reform of its export control regime and relax high-tech exports control towards China,” Chinese vice-premier Wang Qishan said at the China-U.S. Strategic and Economic Dialogue held in Washington from May 9 to 10, which is bound to usher in new opportunities for greater cooperation between the world’s two largest economies.
China has been the fastest-growing major export market of the United States for 10 consecutive years. China and the United States trade value reached $385 billion in 2010, a 160-fold increase compared to before the point when diplomatic ties were established. In terms of the lastest investment sector, a new trend for growing trades and investments between China and the United States has emerged.
The dialogue promotes cooperation
This is the “new orientation” of China-U.S. relations in the new era. The China-US Strategic and Economic Dialogue deeply exchanges views on issues related to the overall, strategic and long-term development of bilateral relations. A key achievement of this is the two countries signed the China-U.S. Comprehensive Framework for Promoting Strong, Sustainable and Balanced Growth and Economic Cooperation.
Besides, China pledged to change regulations so that government contracts are not linked to improvements in its domestic technology base. China also promised improvements in the enforcement of intellectual property. While the U.S. promised to consider Chinese request for “fair treatment” over exports of sensitive American technology. In addition, the two sides agreed to discuss export credits for the first time.
“The cooperation between China and the United States plays a critical role in addressing certain global issues,” said Orville Schell, director of the Center on China-U.S. Relations at the New York-based Asia Society, “The China-U.S. relationship is complicated, so seeking common ground to promote cooperation has become a key feature of the dialogue.”
Analysts deem that China seeks balanced trade. The U.S. should vigorously expand exports to China. Only balanced China-U.S. trade could bring about sustained development and mutual benefits.
Chinese investment increases
The China-U.S. Strategic and Economic Dialogue have burst a new topic: direct investment by Chinese firms in the United States. “The U.S. welcomes Chinese investment in the U.S. and it’ll be all good for both China and the U.S.” said Secretary of Treasury Department Timothy Geithner, Chinese investments in the United States are going to expand in the future.
A new report predicts that China will invest to $2 trillion in foreign companies over the next d cade, with a growing share flowing into cash-starv small businesses in the United States.
A study also shows that over the past two yea direct investment expenses by Chinese firms America have grown more than 130% a year. In 20 alone, Chinese direct investment in the U.S. reach$5 billion, more than doubling from the previous ye according to Daniel Rosen and Thilo Hanemann, r searchers at the New York-based Rhodium Group.
Chinese investment offshore began to takein the last decade, spurred primarily by the drive secure resources and a need to deploy productively t huge cash reserves accumulated through exports a profits at home.
Since 2008, Chinese investment has mainly f cused on American manufacturing. In result, Chi has a business presence in 35 out of the 50 states in t U.S., with the largest concentration of investments Texas. Recently, real estate purchases have also be growing. It is profit that is driving Chinese firms invest in the U.S.. With over-investment leading excess capacity, Chinese companies increasingly s greater profit opportunities across the Pacific.
“We believe the great bulk of potential Chine investment should not just be permitted but encou aged,” said Daniel Rosen and Thilo Hanemann. O viously, if the U.S. rejects Chinese investments, th will simply go elsewhere.
America gains much
Americans could be a major beneficiary. Chine investors are increasingly looking for mergers and a quisitions with early-stage companies in clean-ener information technology and other sectors as an entr into the U.S. market. So far, Chinese investing in t U.S. has already created 10,000 American jobs.
In fact, since the outbreak of the internation financial crisis, China has been supporting America tackle its issues.
On the one hand, China has increased impo from the U.S.. While overall U.S. exports dropp 17.9% in 2009, exports to China remained the co responding period level. Chinese market has becom shelter for many U.S. manufacturing firms against t global financial storm.
On the other hand, cheap and fine Chinese pro ucts have made Americans remain low cost of livin Without consumer Chinese goods, the U.S. price ind would go up an extra 2 percentage points every year.
In all, China-U.S. trade and economic cooper tion have generated huge benefits for the United Stat Analysts think that China and the United States eco omies are highly complementary with huge potentia The mutually beneficial trade and investment will sp both countries’ economic growth.