Us and China Trade
China-U.S. Trade Issues
Wayne M. Morrison Specialist in Asian Trade and Finance July 29, 2010
Congressional Research Service 7-5700 www.crs.gov RL33536
CRS Report for Congress
Prepared for Members and Committees of Congress
China-U.S. Trade Issues
Summary
U.S.-China economic ties have expanded substantially over the past three decades. Total U.S.China trade rose from $5 billion in 1980 to $409 billion in 2008. Although commercial ties were sharply affected by the global economic crisis in 2009 (total U.S. trade with China dropped by 10.5% to $366 billion), China remained the second-largest U.S. trading partner, its third-largest export market, and its biggest source of imports. With a large population and a rapidly expanding economy, China is a huge market for U.S. exporters and investors. However, bilateral economic relations have become strained over a number of issues, including large U.S. annual trade deficits with China (the deficit was $266 billion in 2008, but fell to $227 billion in 2009), China’s mixed record on implementing its World Trade Organization (WTO) commitments, its resistance to international calls to reform its pegged (and undervalued) currency system, its relatively poor record on enforcing intellectual property rights (IPR), and its extensive use of industrial policies and discriminatory government procurement policies (such as proposed “indigenous innovation” certification regulations) to promote domestic Chinese firms over foreign companies. Some observers contend that the business climate in China has worsened over the past few years. Further complicating the U.S.-China bilateral relationship is the growing level of economic integration and mutual commercial dependency between to two economies. U.S. economic ties with China benefit many U.S. groups, such as consumers (through low-cost imports from China) and certain business interests (such as firms who use China as a center for their supply chain operations to assemble
Wayne M. Morrison Specialist in Asian Trade and Finance July 29, 2010
Congressional Research Service 7-5700 www.crs.gov RL33536
CRS Report for Congress
Prepared for Members and Committees of Congress
China-U.S. Trade Issues
Summary
U.S.-China economic ties have expanded substantially over the past three decades. Total U.S.China trade rose from $5 billion in 1980 to $409 billion in 2008. Although commercial ties were sharply affected by the global economic crisis in 2009 (total U.S. trade with China dropped by 10.5% to $366 billion), China remained the second-largest U.S. trading partner, its third-largest export market, and its biggest source of imports. With a large population and a rapidly expanding economy, China is a huge market for U.S. exporters and investors. However, bilateral economic relations have become strained over a number of issues, including large U.S. annual trade deficits with China (the deficit was $266 billion in 2008, but fell to $227 billion in 2009), China’s mixed record on implementing its World Trade Organization (WTO) commitments, its resistance to international calls to reform its pegged (and undervalued) currency system, its relatively poor record on enforcing intellectual property rights (IPR), and its extensive use of industrial policies and discriminatory government procurement policies (such as proposed “indigenous innovation” certification regulations) to promote domestic Chinese firms over foreign companies. Some observers contend that the business climate in China has worsened over the past few years. Further complicating the U.S.-China bilateral relationship is the growing level of economic integration and mutual commercial dependency between to two economies. U.S. economic ties with China benefit many U.S. groups, such as consumers (through low-cost imports from China) and certain business interests (such as firms who use China as a center for their supply chain operations to assemble