China-U.S. Trade Issues
LIBRARY OF CONGRESS WASHINGTON DC CONGRESSIONAL RESEARCH SERVICE
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U.S.-China economic ties have expanded substantially over the past three decades. Total U.S.- China trade has risen from 5 billion in 1980 to 409 billion in 2008. In 2008, China was the second largest U.S. trading partner, its third largest export market, and its biggest source of imports. About 12 of total U.S. global trade is now with China. According to U.S. data, U.S. firms have invested around 28 billion in China through 2007, some of which is aimed at the Chinese domestic market, while other investment has gone into export-oriented manufacturing facilities. With a huge population and a rapidly expanding economy, China is a potentially huge market for U.S. exporters. However, bilateral economic relations have become strained over a number of issues, including large and growing U.S. trade deficits with China 266 billion in 2008, Chinas failure to fully implement its World Trade Organization WTO commitments especially in regards to protection of intellectual property rights, its refusal to adopt a floating currency system, its use of industrial policies such as subsidies and other practices deemed unfair andor harmful to various U.S. economic sectors, and its failure in some cases to ensure that its exported products meet U.S. health and safety standards. Further complicating the bilateral economic relationship is Chinas large holdings of U.S. debt, such as Treasury securities. In September 2008, China overtook Japan to become the largest foreign holder of such securities. Some analysts welcome Chinas purchases of U.S. debt securities, which help fund U.S. budget deficits, while others have expressed concerns that growing Chinese holdings of U.S. debt may increase its leverage over the United States.
- Economics and Cost Analysis
- Government and Political Science