Trade with China By: Helena Yang

Project Overview:

For this project, I researched on USA's trade with China, how it affects each country positively and negatively, and statistic regarding the trade. China is the United States's largest trading partner with nearly 6 hundred billion in total, both ways, and it's been like that for 10 years. The trade business provided many jobs for both Chinese and American workers, though the jobs has been decreasing by a lot. The trade benefits both countries, though imports from China is 3 times greater than exports to China.

Changes Over Time:

From 2006 to 2014, US services exports to China increased more than 300 percent. Services exports to the rest of the world increased 91 percent. On average, US goods exports to China grew by nearly 9 percent annually over the past 10 years. US services exports to China grew faster than all other major trading partners, averaging nearly 17 percent annually over the last decade. (US China)

Role Played in Both Countries' Economy

US goods exports to China come from a wide range of industries including transportation equipment, agriculture, computers and electronics, and chemicals. (US China) China provides low-cost manufacturing facilities for American companies. Similarly US provides number of jobs to China. According to the Department of Commerce, U.S. exports of goods and services to China supported an estimated 251 thousand jobs in 2014. U.S. exports of agricultural products to China totaled $20 billion in 2015, our 2nd largest agricultural export market. (USA Gov) The US is a huge market for Chinese goods. China has pumped money in US economy in the form of treasury bonds. When the dollar loses value, China buys dollars through U.S. Treasuries to support it. By buying Treasuries, China helped keep U.S. interest rates low. If China were to stop buying Treasuries, interest rates would rise. That could throw the United States and the world back into the recession. It isn't in China's best interests, as U.S. shoppers would buy fewer Chinese exports. (The Balance)

The New President's View on This

The dollar's value has raised by 25 percent since 2014. The Chinese yuan went up with it. When the PBOC started to unpeg the yuan from the dollar in 2015, the yuan immediately plummeted. That indicates the yuan is over-valued. If the yuan were undervalued, as Trump claims, it would have risen instead. (The Balance) President Donald Trump promised to lower the trade deficit with China. He threatens to impose duties on Chinese imports. He wants China to do more to raise its currency. He claims that China artificially undervalues it by 15 percent to 40 percent. However, USA and China is so closely linked that any changes will affect both countries a lot. He said that he will focus more on bilateral trade deals rather than multilateral initiatives. "On trade, I am going to issue a notification of intent to withdraw from TPP, a potential disaster for our country. Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back on to American shores", he said in a video. (Mehr) Within his first few days in office, he already withdrew from TPP.

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