Development Of SinoUs Economic And Trade Relations

. Essay, Research Paper

Development of Sino-US economic and trade relations.

When you are eager to get in touch with your family or friends, Motorola can transmit messages for you anywhere at any time. When you open .Windows 98 x, when you are taking Boeing Aircraft, when you are eating McDonald s or Kentuky Fired Chicken with relish while drinking Coca-Cola, have you ever thought that it is development of Sino-US economic and trade that have brought so many favors to us? Have you ever known the developed course of Sino-US economic and trade relations? Have you ever cared about the future of Sino-US economic and trade relations? I ll be glad to talk the development of Sino-US economic and trade relations about its past, present and future.

Let’s review the development of Sino-US economic and trade relations.

On February 21,1972, when President Nixon arrived at Beijing Airport, the late Chinese Premier Zhou Enlai took his hand and said: .You have reached across the world s largest ocean to shake my hand. x The historic handshake ended the more than two decades of hostile separation of the world s two great nations, and China established officially diplomatic relations with the US on January 1, 1979. During President Nixon s visiting, China purchased 10 Boeing airplanes from America, which is a real beginning of Sino-US economic and trade co-opration.

Bilateral economic ties and trade have developed rapidly since the two countries resumed high-level contacts and opened the door for further development of relations in 1972. Trade between the two countries grew out of nothing, expanded from small to large and is rising in a gratifying way.

According to statistics from the China General Administration of Customs, Sino-US trade in 1997 amounted to US$48.99 billion, 20 times the figure of 1979 when the two countries established diplomatic relations. In the 18 years from 1979 to 1996, two-way trade totaled US$260.6 billion. Between 1979 and 1995, the United States was China s third largest trading partner, and in 1996, it moved up to second place. In the 1990-1997period, the trade volume increased at an average annual rate of 22.6 percent, much higher than the 15.9 percent average annual growth rate of China s foreign trade in the same period. By the end of last year, Sino-US trade accounted for 15 percent of China s foreign trade volume. According to the latest Chinese customs statistics, the United States surpassed Hong Kong to become the Chinese mainland s second largest trade partner after Japan in the first five months of this year. Between January and May of this year, the bilateral trade reached US$19.8 billion, up 12.6 percent over the same period last year. China s exports to the US grew by 18 percent to US$13.3 billion, when imports from the US hit US$6.4 billion, an increase of 2.6 percent over the same period of last year.

According to US customs statistics, bilateral trade was only US$2.37 billion in 1979 but reached US$63.5 billion in 1996, totaling US$376 billion over the past 18 years. China became the fourth largest trading partner with the United States in 1996, up from 24th place in 1980. Despite differences in the two countries calculations, statistics from both sides show that bilateral trade has recorded average annual growth of more than 18 percent during this period.

Meanwhile, two-way investment has increased rapidly. Since 1992, when the Chinese economy began a boom, US corporate investment in China has gained promptly in momentum. By the end of last year, direct investment projects in China involving US firms reached 24,366, with a contracted volume of over US$40 billion, of which about US$17.5 billion had been used. By May of this year, the number of US-funded projects in China stood at 25,184 with contractual investment of US$18.74 billion. After China s Hong Kong and Taiwan regions, the US is the second biggest foreign investor in China, right after Japan. On the other hand, China s investment in the US has also been growing since it started at the end of the 1970 s. By the end of last year, there were 526 Chinese-invested firms in the US, involving US$682 million in contractual investment and US$471 million in actual investment. Alongside the country s reform, opening and economic growth, China has constantly increased investment and expanded cooperation areas with the United States.

The rapid development of bilateral economic ties and trade is outcome of concerted efforts of the two countries.

The rapid development of bilateral economic ties and trade is outcome of concerted efforts of the two governments and business communities. China is the largest developing country, and the United States is the largest developed country. Their differences in reserves of natural resources, industrial structures and levels of consumption mean that the two countries can complement each other and economic cooperation have natural advantages.

China s cheap and quality products are attractive to Americans, while US goods, with their advanced technological levels and suitability to Chinese construction, are well received in China. The country s huge market and abundant labor resources are major factors making many American companies give top priority to China while expanding their business overseas. At the same time, many Chinese companies regard US companies as ideal partners for they have advanced science and technology, sufficient funds and efficient management skills.

Urrently, China is a major supplier of textile products, garments, shoes, toys, household appliances and luggage to the United States and an important market for America s aircraft, power equipment, machinery, electronic devices, telecommunications equipment, chemical fertilizers and farm produce such as grain and cotton. In the past three years, one out of every 10 of Boeing s aircraft has been sold to China. China is already the biggest buyer of US aircraft, with the purchase of a total of 387 more planes by 1997. China has also become the sixth largest export destination for America s agricultural products. And more than 200 of the 500 top companies in the US have trade links and cooperative economic ties with China. Most American businesses in China are comparatively large in scale, have fine management and gain considerable profits.

The good investment environment in China attracts America s capital, while the continued increase of American economy and enormous America s capital are eager to look for a large place of investment, so the United States won t let slip a golden opportunity for investing in Chinese big market. Among the 500 top American large multinational corporations, 100 companies such as GM, INTEL, KODAK, McDonald s have invested in China directly. Take Shanghai as an example, by the end of May of this year, there were 2,293 local businesses involving US$3.3 billion of committed investment from US, about 11 percent of Shanghai s total foreign investment. Good returns for the pioneering US companies in Shanghai prompted many followers to the city. The influx reached a height in 1995 as more than 350 US companies opened business in Shanghai, averaging one a day. American business, attracted by the favorable investment atmosphere in Shanghai, are playing a vital role in the city s economy. With the gradual opening of China s fledgling service sector, more and more US firms are entering this field. To date, US banks have established 11 branches in China and there are four US-based insurance companies operating here. Meanwhile, a lot of Chinese companies have invested directly or indirectly in the United States involving industry, agriculture, clothing, food, tourism, finance, insurance and so on.

The steady development of Sino-US economic ties and trade is conducive to the economic prosperity of both countries. Two-way trade has created more than 300,000 highly paid jobs and, indirectly, nearly 1 million jobs for the United States alone. And two-way investment along with economic and technological cooperation has helped bring into play the two countries economic superiorities in supplementing each other, further enhancing the economic vitality and prosperity of the two countries.

Thus it can be seen that it s necessary for the two countries to develop the economic and trade relations.

As we all know, politics and economics can affect each other. Strengthened economic cooperation and increased trade will help improve political relations between the two countries, while a sound and stable political relationship will, in turn, facilitate the growth of economic relations and trade.

Under these circumstances of the two countries economy being interdependent, and the .lubricating x effect of rapidly growed Sino-US economic and trade relations, Chinese president Jiang Zemin paid a visit to the United States at the invitations of US President Bill Clinton from October 26 to November 3, 1997. It was the first state visit to the United States by a Chinese head of state in 12 years. Afterwards, from June 25 to July 7, 1998, President Clinton paid a return visit to China at the invitation of President Jiang, the first by an American president in 9 years. The historic exchange of visits is a mew page in the history of Sino-US relations by enhancing understanding, expanding common ground, developing cooperation and achieving the goal of building the future together. And it is the need of common economic benefits of the two countries. China holds a huge market and great demand for development, and the United States holds advanced science and technology as well as enormous material force. The economies of the two countries are therefore highly complementary with each other. At the same time, this historic exchange of visits at the end of this century will promote steady development of bilateral relations and no doubt bring new cooperative trade and economic opportunities to both countries.

By means of the exchange of visits, the two countries have gained many fruits in the field of economic and trade relations. Both sides have reached general agreement over many issues in the trade and economic cooperation sector. China and the United States signed seven contracts and cooperative agreements worth nearly US$2 billion in Beijing on June 29. In the preceding week, various companies and institutions of the two countries had signed 12 significant contracts and agreements worth nearly US$3.2 billion, with US$2.2 billion for purchasing US-made products in the fields of automobiles, aviation, chemical fertilizers, computers, energy, environmental protection and telecommunications. The two countries agreed to conduct technical cooperation in the fields of finance, housing, social security and health care reforms. On March 20 of this year, the two countries signed the agreement on the utilization of nuclear energy for civilian use, which will pave the way for more technology co-operation between the two countries. Properly settling issues related to Sino-US economic and trade ties is of vital importance to the steady and healthy development of bilateral trade and economic cooperation. And the steady and healthy development of Sino-US economic and trade cooperation is of vital importance to the stability and development in Asia-Pacific and the world at large.

The perspective of Sino-US economic and trade relations is bright and broad, but there are many barriers.

There are many favorable conditions for further developing Sino-US trade and economic relations. The complementary nature of the two economies, for one thing, is a good basis for cooperation. Moreover, industry and business communities of both countries are enthusiastic about cooperation; both governments fully recognize the importance of Sino-US economic and trade ties; the existing cooperation offers many examples of success for further growth; the rapid and sustained economic growth on the Asia-Pacific region provides a good chance for cooperation between China and the United States, both of which are located in the Pacific Rim region.

The 15th National Congress of the Communist Party of China provided a blueprint for future development in China, which will open even wider to the outside world. China s foreign trade volume will reach US$400 billion by the year 2000,within 3 years China will import US$600 billion worth of goods. Meanwhile, to overcome the negative influence brought about by the Asian financial crisis and develop the economy of its back-ward mid-west region, the investment scale by 2000 will be US$1200 billion. Among it, infrastructure alone will need US$750 billion. China will focus on the development of such infrastructures and pillar industries as energy, transportation, communications, raw materials, automobiles and electronics in the coming year. During the next five years China will add a total of 80 million kilowatts of installed electricity capacity, build 16,000 kilometers of railway and 2,800 kilometers of highway and install 70 to 80 million telephones. The United States has an investment edge in these areas, all these provide good commercial opportunities for it. China s potential market, once combined with America s advanced technology and capital, will produce great vigor for development. Thus it can be seen that the cooperation of Sino-Us economy and trade has great potentialities, and their cooperation will be bound to facilitate the development of economic and trade relations between the two countries.

The prospects for Sino-US economic and trade relations are quite encouraging, however, we can t ignore that there are still many human obstacles preventing the releasing of the potentials. During President Clinton s visit to China he stated that he supported China to participate into the World Trade Organization, but there are no fundamental changes in these situations that America handles this problem with .delayed x attitude. And it s a main barrier keeping China from acceding to the WTO. Negotiation on this issue between China and the United States will still quite difficult. President Clinton, in 1994, declared that granting Most-Favored Nation status for China wasn t related to human rights. But the current annual review of China s MFN status by the US Congress in accordance with laws of the Cold War period has created a feeling of instability among the business communities of the two countries. Moreover, it is detrimental to bilateral trade and economic cooperation. Though the voice of quite a few American people with vision is powerful for this issue, but the United Stated is still the only one West Country which wouldn t like to grant China General Preferential Treatment. Besides, America puts pressure on China again and again on such issues as intellectual property rights, market access, so as to force China to make more concessions, which don t conform to the developing situation of Chinese economy. And it occurs now and then that America expresses his dissatisfied feeling about Sino-US trade imbalance. All these issues indicate that there are ups and downs on the road of growth of Sino-US economic and trade relations, the circumstances of struggling in cooperation is not easy to change. However, cooperation is still the mainstream and no force on earth can stop Sino-US economy and trade from developing further.

The road of Sino-US economic and trade relations is rugged, but development and cooperation will still be the mainstreams.Having undergone various trials and hardships during the past 20-odd years of development, the Sino-US economic and trade relationship still shows its exuberant vitality. Today, with peace and development as the mainstream in the world, it has become an important and vigorous component in Sino-US bilateral ties, a factor for stabilizing bilateral relations and a source for further advancement. Tackling problems in bilateral economic and trade ties on the basis of mutual respect, discussions on an equal footing and mutual understanding and accommodation are basic principles for developing and promoting state-to-state economic and trade relations. If the two countries create a stable and flexible climate for Chinese and US business communities by settling trade disputes from a long-term point of view and with .strategic, constructive x attitudes, the mammoth potential of Sino-US economic ties can only be fully realized. As long as both China and the United States cherish the hard-won progress, seize the opportunities, act positively and in a spirit of enhancing trust, eliminating prejudice, reducing differences and creating the future together, they will be sure to push Sino-US economic and trade relations to a new level.