http://www.bjreview.com APRIL 20, 2017 BEIJING REVIEW 17
Copyedited by Sudeshna Sarkar
Comments to [email protected]DQGWKHĶUVWRQHVLQFH7UXPSWRRNRIĶFH
According to the Fedís rate-setting meet-
ing in December 2016, it will probably raise
interest rates three times in 2017. The in-
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more pressure on the Fed to raise interest
rates, possibly resulting in a strong dollar that
the yuan will depreciate against in 2017.
Thus, China-U.S. trade frictions will prob-
ably witness a marked rise in 2017 because
the U.S. GDP growth rate will be far below
the projected goal, and a strong U.S. dol-
lar caused by the Fedís measures to raise
interest rates will put more pressure on U.S.
exports and employment.
Room for cooperation
Unemployment problems in the U.S. have
little to do with China-U.S. trade. Looking at
the China-U.S. bilateral trade structure, the
U.S. mainly exports capital- and technology-
intensive products to China, while China
mainly exports labor-intensive products to
the U.S. In general, the bilateral trade struc-
ture is complementary.
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U.S. GDP growth rate has gradually slipped
to its lowest level since World War II. Due to
high labor costs, many labor-intensive indus-
tries such as textile have shifted to a number
of Asian countries, resulting in the disap-
pearance of some low-end jobs. The Obama
administration advocated replacing human
workers with smart factories in high-end
manufacturing, which led to an even more
prominent structural unemployment issue.
China-U.S. trade actually eases the U.S.
employment situation. According to the
U.S.-China Business Council, such trade
created 2.6 million jobs for the U.S. in
2015, and Chinese enterprises operating
in 44 American states have created nearly
100,000 local jobs as of the end of 2016.
China and the U.S. have even more
room for cooperation on infrastructure
investment. For a long time, a massive fi-
nancial deficit, current account deficit and
huge individual consumption have been
the major drivers of U.S. growth. Now the
Trump administration is trying to change this
development pattern. Through tax cuts of
$137 billion and government input of $550
billion, the administration hopes to encour-
age more private sector participation in
infrastructure investment so as to improve
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local businesses.
However, recent news indicates Trump
is considering postponing infrastructure con-
struction until 2018 because government
revenue currently cannot cover this massive
spending plan. China is competitive in terms
of infrastructure financing capability and
construction efficiency and has accumulated
abundant experience in railway and highway
construction. This is exactly what Trump needs
to carry out his infrastructure construction plan.
The U.S. also has more development op-
portunities in its services trade with China.
China is an international trade power not
only in goods, but also in services and is an
important export market for U.S. services.
The China-U.S. services trade has exceeded
$100 billion, accounting for roughly 6 per-
cent of U.S. total services trade exports.
Since 2002, the U.S. has been witness-
ing a favorable balance of services trade with
China, although China enjoys a favorable
balance in goods trade with the U.S. Besides,the U.S. deficit of goods trade with China
is directly related to its export controls on
advanced technologies. Frequently using
national security as an excuse, the U.S. has
forbidden the export of advanced technolo-
gies and equipment to China.
The space for China-U.S. cooperation in
the economic and trade fields is extensive.
Expanding trade and economic cooperation
with China will be conducive to U.S. econom-
ic recovery and employment growth. QA workshop of SAIC-GM (Shenyang) Norsom Motors, a joint venture between SAIC Motor and GM (China) Investment,
in Shenyang, capital of Liaoning ProvinceXINHUA
An event kicks off in Suzhou City, Jiangsu Province, on October 15, 2016, as part of the 2016 China-U.S. Tourism Year,
giving some 1,000 U.S. tourists a special tour of the cityís distinctive water town cultureXINHUA