Beijing Review

16 BEIJING REVIEW APRIL 20, 2017 http://www.bjreview.com

COVER STORY

S

ince China started reform and open-
ing up in the late 1970s, its trade
exchanges with the U.S. have become
increasingly frequent. As the two largest
economies in the world, their bilateral trade
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serves as the momentum driving the worldís
economic growth.
President Xi Jinping and his U.S. counter-
part Donald Trump agreed to expand mutually
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on the basis of mutual respect during Xiís trip to
Palm Beach, Florida, on April 6-7.
Xi said cooperation is the only right choice
for China and the U.S., while Trump said the U.S.
stands ready to work with China to eliminate is-
sues that stand in the way of their relations.
According to Chinaís Foreign Minister
Wang Yi, China and the U.S. agreed to facili-
tate the healthy development of two-way
trade and investment, advance negotiations
on a bilateral investment treaty, and promote
pragmatic cooperation in infrastructure and
other areas.

Trade friction causes

The slow recovery of the U.S. economy and
the strong U.S. dollar will increase the pos-
sibility of trade frictions between China and
the U.S. There is an evident negative correla-
tion between the U.S. GDP growth rate and
the number of anti-dumping measures the
U.S. has launched against China.

Every 1-percentage-point drop in the

U.S. GDP growth rate leads to a 0.15-percent

increase in the number of U.S. anti-dumping

cases against China. A correlation can also be

found between the exchange rate fluctua-

tion of the yuan against the U.S. dollar and

the number of U.S. anti-dumping investiga-

tions against Chinaóthe devaluation of the

yuan against the dollar largely increases the

number of investigations.

In terms of U.S. GDP growth, although a

number of favorable factors for economic re-

covery have emerged, such as manufacturing

revival and employment growth, U.S. economic

growth slowed to 1.6 percent in 2016, far below

the 2.6 percent seen in 2015. According to

forecasts from the International Monetary Fund,

the World Bank and the U.S. Federal Reserve,

the 2017 GDP growth rate of the U.S. will not

surpass 2.3 percent, even with the proactive

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tration. This is far below the 4-percent growth

goal proposed by the administration to ìbring

back jobs and growth.î

On March 15, the Fed raised the target

interest rate by 25 basis points to a range of

0.75 to 1 percent. The widely expected move

marks the third rate rise in almost a decade

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countries By Zhao Ping

The author is director of

International Trade Studies

Center, China Council for the

Promotion of International

Trade Academy

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Business Council, Rhodium Group; designed by Pamela Tobey)

China is the destination of 26 percent of U.S. exported Boeing aircraft,

56 percent of its soy beans, 16 percent of its automobiles, and 15 percent

of its farm products and integrated circuits.

About 40 percent of Chinaís trade surplus with the U.S. is actually generated

by U.S. companies in China. Trade with China helps each U.S. family save

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jobs in the United States and contributing $216 billion to U.S. economic

growth in 2015.

Over the past decade, U.S. exports to China increased 11 percent annually

on average, while Chinaís exports to the U.S. rose 6.6 percent annually on

average. Bilateral trade in the service sector has surpassed $100 billion,

with the U.S. maintaining a surplus with China.

Bilateral investment amounted to more than $170 billion at the end

of 2016, helping boost the economies of both countries.

By the end of 2016, U.S. companies had invested nearly $80 billion

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Chinese investment in the U.S. outstripped U.S. investment in

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the amount of 2015. By 2020, Chinese investment in the U.S. could reach

$200 billion.

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year that his company would help create U.S. jobs by enabling 1 million small

businesses to sell American goods on Alibabaís platform.

Economic Ties Between China and the U.S.