Great leap in China-US economic relations

The China-US trade has swelled to over $500 billion in 2013 from a mere $2.45 billion in 1979, when the two countries established their diplomatic ties, and the bilateral investment has grown to $100 billion from a negligible level during the same period. 

"The trade and personnel exchange between China and the US (at the beginning of the establishment of the diplomatic relations) were far smaller than today's scale," said Chinese Ambassador to the US Cui Tiankai, who studied at Johns Hopkins University 27 years ago, adding that the status of the Chinese people in the US has greatly improved.

China is now the largest source of products imported by the US and the third-largest destination for US exports. And the world's two largest economies are each other's second-largest trade partners.

On the occasion of the 35th anniversary of the establishment of the US-China diplomatic relations, the two countries have made great and substantial achievements in promoting the bilateral economic ties, said Douglas Paal, vice president for studies at the Carnegie Endowment for International Peace, predicting that the newly appointed US Ambassador to China Max Baucus will play a positive role in promoting the US-China economic and trade relations due to his 20-year experience of working in trade sector.

Paal played a role in helping China join the World Trade Organization (WTO) in 2001 and contributed to the building of a close trading partnership between the US and China. Since entering the WTO, China has made the world suffused with its products and investment capital, which is beneficial for itself, the Asian countries and even the whole world, said Paal.

The economic ties matter to the health of the whole US-China relations, as good bilateral economic and trade ties can inject stability and equilibrium into the world's most important bilateral relationship, according to David Firestein, vice president of the EastWest Institute, a nonprofit think tank that focuses on finding solutions for international conflict, and a former American diplomat.

Firestein referred to this year's State of Union address by US President Barack Obama in which he mentioned China twice and linked it with US investment and competition environment, which is normally categorized as domestic politics, saying that China-related issues have become the bone of contention when talking about US internal affairs.

Firestein attributed it to the economic interdependence between the US and China, claiming that China has already had a direct impact on American people's daily life through trade with and investment in the US.

Yet, despite the strong momentum of the bilateral economic and trade ties, there are still some problems. David Lampton, director of SAIS-China and China Studies at the Johns Hopkins School of Advanced International Studies, said that the US-China economic ties cannot be on an upward trajectory that is more stable, sustainable and complementary unless the two countries step up efforts to rebalance their economic relations.

The current situation is that China is saving and producing more and consuming less than the US, which urgently hopes that more American-made products could be imported to China in a bid to slash the trade deficit with China which is looking to transition to a consumption-driven growth model from the orthodox export and investment-driven growth.

With the breakneck development of the Chinese economy and the further enforcement of the reform and opening up policy, the US has to reassess its policy on China, which is increasingly integrating with the international economic system, said Yuan Zheng, a professor with the Institute of American Studies under the Chinese Academy of Social Sciences.

"You (Chinese people) will not be happy if our (American) economy has problems. If it continues, your (Chinese) economy will surely be affected," Yuan cited an American scholar, who made the remarks at an academic seminar, as saying, acknowledging that due to the high interdependence in the global economy, any disruption in the China-US economic relations might lead to the Domino effect.

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