The China-US Economic Relationship

The mainland chinaw ar-US Economic Relationship chinaware and the United States, as the two largest economy groups in todays beingness who own much than 30 percent of the worlds GDP, choose the ability to decide and change the destiny of world economy.The United States has been dominating the worlds economy for a long time as the only superpower after World War II. It has the most compelling currency, US-dollar. The US dollar is the worlds main reserve currency and settlement currency. near of the oil trading is done by USD, and USD is the only currency that colligate to gold. The worlds new-star of economy, china, rose since the ending of stand century. China has surpassed Japan and become the twinkling largest economy of the world in 2010, two years after its act of becoming the largest holder of U.S. debt in September 2008. It is now the largest effectuals producer of the world, and likewise a hypo-power in East Asia. The financial crisis last during last intravenous feeding years has proved that it is unsafe to let only one field determine how the world economy should go. China and the U.S. should be working unneurotic to visualize the stability of world economy.The relationship between the United States and China is strong, and they are all depending on each other. Chinese goods are demanding greatly by U.S. customers because of its low determines. As the result of the global financial crisis, the U.S. had to dismount the value of its debt to due to the bad economy, just now this also made the relationship between China and U.S. became unst up to(p). Economists suggest that the relationship has contributed a lot to two countries. In 2010, the U.S. goods shell out relation with China hit a demean high of $273.1 billion. (Roya and Christopher)China as a large but non well-developed country, while rich in labor and resource but neediness of big(p) and the technological capacity, seeks foreign investment and technologies to help its de velopment. US have the most advanced technologies in the world and a large capital flow in the market. The US and China was naturally a finished match. US can provide the financial and tech support in exchange for Chinas cheap products and resources. Both sides have benefited in this arrangement.For China, the benefit is not only in the direct investments made by American companies and firms, but also in the massive amount of daily products that are change to most American people. The growth of Chinas economy is studyly from exporting. For Chinas rising in last thirty years, it is fair to say that the U.S. has played an alpha role and contributed a lot through mountain. From 3% in 1990, the imports from China has grown dramatically for the U.S., 19.1% of U.S. imports in 2010 were from China. And automatically, China became indispensable as an import source for the U.S, from eighth in 1990, to fourth in 2000, to second in 2004-2006, and then to the initiatory in 2007-2012 (M orrison). Chinese trade has grown tremendously, from $20.6 billion and 0.8% of the world amount in 1978 to $2.97 trillion and about 7.8% in 2010. Compare to Germany, Japan, and the United States, China has colossal advantages on its low-cost labor, growing technology and undervalued currency. These advantages let Chinese goods have much lower prices than the others. That is the reason why China became the worlds largest construct goods exporter. (Brown) As for US, the benefit is obvious. Chinas relative low-cost advantage makes it focusing on producing labor-intensive goods, and thanks to the vast, seemingly unlimited Chinese work force, people in US can purchase Chinese made fit out for a fraction of the price of a US made apparel at a relatively same quality, and its not only the shirts, its nigh everything. And for most American companies it was good too. Many companies can benefit from the huge Chinese labor force and Chinese markets.U.S. imports of low-cost goods from Chi na greatly benefit U.S. consumers, and U.S. firms that use China as the final point of conference for their products, or use Chinese-made inputs for production in the United States, are able to lower costs and become more globally competitive. (Morrison)All in all, it would seem like a win-win for both China and America.While China is getting many put-ons from companies from United States, U.S has been experiencing high unemployment rate for years. There are voices from some of the media or purge politicians claim that outsourcing to China is one of the major causes for high employment. But in fact, outsourcing actually sustains American jobs in a long run (Zhu). This can be illustrated by a unbiased example. If China can make a cellphone more cheaply, it makes more sense to import cellphone from China than make it domesticatedally. Such doing actually is good for both sides, brings real incomes, with added growth in the exporting country, and lower prices in the importing cou ntry (Economist). When the price of cellphone becomes cheaper, there will be more people can afford them than before, which is good for the market. Consequently, more cellphone related jobs such as maintenance and converse services are created. Therefore, more free trade between China and the U.S. can increase jobs instead of decreasing them (Yi). By analyzing trade and patience data, statisticians have discovered some fact. They find that job dislocation is not majorly because of outsourcing and offshoring in the manufacturing and service. They find the real causes of job losses were weak domestic demand, rapid productivity growth, and the dollars strength which dampened U.S. exports (Baily and Lawrence). U.S. consumers has greatly benefited from importing low price goods from China, their purchasing power has been increased. This also helped the United States maintain at a low inflation rate. Actually, trade with China has helped directly or indirectly to create jobs in the Uni ted States, and this is much more important.The U.S. merchandise trade dearth has increased from $1.7 billion in 1986 to $295 billion in 2011 (US number Bureau), because U.S. imports from China have risen much faster than U.S. exports to China. The U.S. trade deficit with China has kept growing rapidly during the last quarter century. At present, trade imbalance is huge between China and U.S, 43% of the U.S. trade deficit is accounted for by China. And it is one of the major concerns in U.S. China relation. The U.S. deficit with China is the major part of U.S deficit.It was larger than the combined U.S. trade deficits with the scheme of the Petroleum Exporting Countries (OPEC), the 27 nations that make up the European sexual union (EU27), and the 10 nations that make up the Association of Southeast Asian Nations (ASEAN). (Morrison)The connexion between China and U.S will be even stronger in the future. They will continue to benefit from each other. They are both the most impo rtant market to each other. Trades between these two countries will increase even more and create more great opportunities for businesses in both countries. As the two strongest economic powers in the world, if China and U.S keep the win-win strategy, they can ensure the growth of global economy.Work CitiedBaily, M. N. and Lawrence, R. Z., Dont blame trade for US job losses. The McKinseyQuarterly, Issue 1. 2005. Web. 9 Nov. 2012Brown, A.S., Manufacturing at the crossroads. Me-Magazine., 2010. Web. 13 Nov.2012Karabell, Zachary. Can an Eagle cover a Panda? Time. Nov. 30, 2009. Web. 1 Nov. 2012U.S. Census Bureau. 2011. Web. 8 Nov. 2012Wu Yi. WSJ Its Win-Win on U.S.-China Trade. Council on Foreign Relations. May 17, 2007. Web. 11 Nov. 2012Wolverson, Roya, and Alessi, Christopher. Confronting U.S.-China Economic Imbalances. Council on Foreign Relations. November 2, 2011. Web. 11 Nov. 2012Zhu, Zhi Qun. China and the United States Learning to Live Together. Centre for World parley . Spri ng 2007. Web. 7 Nov. 2012