Analysis of the Us-China Trade
Analysis of the US-China Trade
The U.S. trade deficit has risen more or less steadily since 1992. In the second quarter of 2004, the trade deficit relative to GDP surpassed the 5 percent mark for the first time. Many economists already considered trade deficits above 4 percent of GDP dangerously high. The fear is that continued growth in this external imbalance of the U.S. economy will ultimately spook overseas investors. http://www.americanprogress.org/issues/2004/09/b193700.html
The United States and China share the most imbalanced bilateral trade relationship in the world. The United States imports more goods from China than it exports to a tune of $202 billion dollars each year. All told, China alone accounts for nearly 26% of the United States ' $725.8 billion trade deficit. “Increasingly, this imbalance has been the subject of a major political backlash within the U.S. congress, where some have charged that the US is destroying its industrial base to support a communist country 's industrialization." http://worldnews.about.com/od/china/a/china_trade.htm
What Causes the Trade Deficit?
The current trade imbalance is caused in large part by intrinsic features of China 's labor market and consumer base. The vast majority of China 's 1.3 billion people still live in rural areas. China has, by some estimates, a surplus rural labor force of 120 million people, many of whom migrate to industrial centers to look for factory work, and drive down wages. As long as wages are low, the United States will continue to gobble up products made in China, while Chinese consumers will prefer to buy cheaper, homespun alternatives to American products. The rise in trade deficit with China has come at a cost to jobs in the United States, according to a new study just published in Washington. The study found that some 1.5 million US jobs were lost to lower-wage Chinese competition in the 14-year period between 1989 and 2003, when US trade deficits with China rose from US$6.2
The U.S. trade deficit has risen more or less steadily since 1992. In the second quarter of 2004, the trade deficit relative to GDP surpassed the 5 percent mark for the first time. Many economists already considered trade deficits above 4 percent of GDP dangerously high. The fear is that continued growth in this external imbalance of the U.S. economy will ultimately spook overseas investors. http://www.americanprogress.org/issues/2004/09/b193700.html
The United States and China share the most imbalanced bilateral trade relationship in the world. The United States imports more goods from China than it exports to a tune of $202 billion dollars each year. All told, China alone accounts for nearly 26% of the United States ' $725.8 billion trade deficit. “Increasingly, this imbalance has been the subject of a major political backlash within the U.S. congress, where some have charged that the US is destroying its industrial base to support a communist country 's industrialization." http://worldnews.about.com/od/china/a/china_trade.htm
What Causes the Trade Deficit?
The current trade imbalance is caused in large part by intrinsic features of China 's labor market and consumer base. The vast majority of China 's 1.3 billion people still live in rural areas. China has, by some estimates, a surplus rural labor force of 120 million people, many of whom migrate to industrial centers to look for factory work, and drive down wages. As long as wages are low, the United States will continue to gobble up products made in China, while Chinese consumers will prefer to buy cheaper, homespun alternatives to American products. The rise in trade deficit with China has come at a cost to jobs in the United States, according to a new study just published in Washington. The study found that some 1.5 million US jobs were lost to lower-wage Chinese competition in the 14-year period between 1989 and 2003, when US trade deficits with China rose from US$6.2
Cited: http://www.americanprogress.org/issues/2004/09/b193700.html http://worldnews.about.com/od/china/a/china_trade.htm http://goliath.ecnext.com/coms2/summary_0199-3700728_ITM http://worldnews.about.com/od/china/a/china_trade.htm http://www.epi.org/content.cfm/webfeatures_viewpoints_tradetestimony http://www.epi.org/content.cfm/bp188 http://www.census.gov/foreign-trade/balance/c5700.html U.S Census Bureau Foreign Trade Statistics http://www.nytimes.com/2006/02/11/business/11trade.html?pagewanted=print