SINO US ECONOMIC RELATIONS

Introduction

1.

Sino-American or People's Republic of ChinaUnited States relations refers to

international relations between the People's Republic of China (PRC) and the United States of America (US). The United States and the People's Republic of China are neither allies nor enemies; the U.S. government and military establishment do not regard the Chinese as an adversary, but as a competitor in some areas and a partner in others.

2.

While there are some tensions in Sino-American relations, there are also many

stabilizing factors. The PRC and the United States are major trade partners and have common interests in the prevention and suppression of terrorism and nuclear proliferation. China and the US are the largest mutual trading partners, China is also the largest foreign creditor for the United States. The Sino-American relationship has been described by top leaders and academics as the world's most important bilateral relationship of the 21st century.

Sino-US Economy Relation:-

3.

To quote David L. Anderson: Anson Burlingame, . . . the first American diplomat to reside in Peking, respected China as a sovereign nation and a venerable civilization, and he advocated a policy of patient, peaceful dealings with the Chinese. J. Ross Browne, who followed Burlingame, considered the Chinese backward and stubborn; he favored forceful and united foreign pressure for change in China. The methods of these two ministers - conciliation and coercion - represented the extremes in the American options in China. The policies of their successors generally fell somewhere between the two.

4.

The PRC and the US resumed trade relations in 1972 and 1973. Direct

investment by the US in mainland China covers a wide range of manufacturing sectors, several large hotel projects, restaurant chains, and petrochemicals. US companies have entered agreements establishing more than 20,000 equity joint ventures, contractual joint ventures, and wholly foreign-owned enterprises in mainland China. More than 100 US-based multinationals have projects in mainland China, some with multiple investments. Cumulative US investment in mainland China is valued at $48 billion. The US trade deficit with mainland China exceeded $350 billion in 2006 and was the United States' largest bilateral trade deficit. Some of the factors that influence the U.S. trade deficit with mainland China include:

(a)

The strength of the US economy:

Mainland China has increasingly

become the last link in a long chain of value-added production. Because US trade data attributes the full value of a product to the final assembler, mainland Chinese value added is over counted.

China-US Strategic Economic Dialogue

5.

As one American academic cautioned: "We don't have a strategic partnership or

alliance with China. But we have to have constructive relations, there needs to be a continuing dialogue

6.

Beginning in 2006, the US and China agreed to hold regular high-level talks

about economic issues and other mutual concerns by establishing the China-US strategic economic dialogue, which meets biannually. Economic nationalism seems to be rising in both countries, a point the leaders of the two delegations noted in their opening presentations. The United States and China have also established the highlevel US-China Senior Dialogue to discuss international political issues and work out resolutions.

Trade Protectionism

7.

In September 2009 a trade dispute emerged between China and the United

States, which came after the US imposed tariffs of 35 percent on Chinese tire imports. The Chinese commerce minister accused the United States of a "grave act of trade protectionism," while a USTR spokesperson said the tariff "was taken precisely in accordance with the law and our international trade agreements." Additional issues were raised by both sides in subsequent months.

(a)

Currency Dispute:-

Monetary policy has been one of the biggest

issues surrounding relations between the United States and China within the past decade. At the heart of the issue is the question of whether or not each countrys currency is at the proper value. Each country has placed the blame with the other. Most monetary and trade experts agree that Chinas currency has been and is still undervalued, but an article by Business Insider argues that China raising the value of their currency would have a large effect on the trade balance between the two countries.

(b)

Influence in Asia:-

China's economic rise has led to some geo-

political friction between the US and China in the East Asian region.For example, in response China's response to the Bombardment of Yeonpyeong by North Korea, "Washington is moving to redefine its relationship with South Korea and Japan, potentially creating an anti-China bloc in Northeast Asia that officials say they don't want but may need." For its part, the Chinese government fears a US Encirclement Conspiracy.

(c)

Controversies:-

In 2005, the partly state-owned Chinese National

Offshore Oil Corporation attempted an $18.5 billion takeover of UNOCAL. The deal was rejected by the American government on the grounds that it threatend national security. China also rejected a $2.4 billion bid from the The Coca-Cola Company for the Huiyuan Juice Group on the grounds that it would

be a virtual monopoly, though nationalism was also thought to be a reason for aborting the deal.

War On Terror

8.

Sino-American relations changed radically following the September 11, 2001

attacks. The PRC offered strong public support for the war on terrorism. The PRC voted in favor of UNSCR 1373, publicly supported the coalition campaign in Afghanistan, and contributed $150 million of bilateral assistance to Afghan reconstruction following the defeat of the Taliban. Shortly after 9/11, the US and PRC also commenced a counterterrorism dialogue.

Economical / Bi-lateral Co-operation

9.

President Barack Obama visited China on November 1518, 2009 to discuss

economic worries, concerns over nuclear weapon proliferation, and the need for action against climate change.

The New Superpower Politics

10.

The key to the new superpower politics, which reflect United States-China

relations at this turn of the new century, rests with a Chinese desire to transform the existing relationships of power, where alliances are pledged, to more egalitarian relationships of loose partnerships based on multipolar (rather than uni- or bipolar) relations.

Conclusion

11.

As of 2011, the United States has the world's largest economy and China the

second largest. China has the world's largest population and the United States has the third largest. The two countries are the two largest consumers of motor vehicles and oil

and the two greatest emitters of greenhouse gases. Relations between the People's Republic of China and the United States have been generally stable with some periods of tension, most notably after the breakup of the Soviet Union, which removed a common enemy and ushered in a world characterized by American dominance. There are also concerns relating to human rights in the People's Republic of China and the political status of Taiwan. The United States and the People's Republic of China are usually neither allies nor enemies; the U.S. government and military establishment do not regard the Chinese as an adversary, but as a competitor in some areas and a partner in others.

Harvey Sicherman wryly adds his judgement of the Sino-US summit in April 1999 . . . the China that at last could say yes to American demands encountered an America that at last could say no to Chinese deals. . . . Having signalled for months what was needed for a deal, the President then abruptly turned it down. To the Chinese, the Americans had become inscrutable.

(Words : 1223) Reference:1. U.S China economic relation issues and prospects conference report by Dr.

Alison A. Kaufman. CNA China Studies. June 2008 2. 3. Wikipedia http://www.worldlawdirect.com/article/1651/us-china-relations-since-1950.html