History plays a funny role in repeating itself. With light of the current trade frictions between the
United States and China, their trading histories become increasingly relevant. Little did both sides know
the substantial impact of President Nixon’s 1972 meeting with Chairman Mao—the event laid the basis
for growth and development between both countries for the next several decades: into a present
where the US dominates while China has the fastest growing financial market of the Twenty-first
Century. Up until recently, their trade relations have been, if not smooth, at least civil. However, the
increasing number of disputes in trade and policy-making may adversely affect the development of
Sino-US relations on the world market. As the international society turns their critiquing eyes towards
the friction currently plaguing the US and China, the two world powers are placed in the precarious
position of settling these disputes to not only decide the future of their own fragile partnership, but
the ultimate direction of the world trading scene.
Table of Contents
1. Introduction
2. History's Impact
2.1 The Opium Wars
2.2 China and the WTO
3. Dumping and Anti-Dumping (AD)
3.1 Current Trade Frictions
3.2 Protectionist Policies
3.3 Definitions
3.4 China's Reaction
3.5 AD and China
4. Financial Markets Friction
4.1 IPR
4.2 Currency Manipulation
4.3 Credit Derivatives Market
4.4 China's Investments
5. Conclusions
5.1 Summary
5.2 Future Projections
Research Objectives and Themes
The work examines the complex and evolving trade and investment relationship between the United States and China, aiming to identify the root causes of current trade tensions and analyze their broader implications for the global economy.
- Historical context of Sino-US economic interactions
- Mechanisms and impacts of anti-dumping policies
- Challenges related to Intellectual Property Rights (IPR)
- Debates surrounding currency manipulation and trade deficits
- The influence of financial markets and state-controlled investments
Excerpt from the Book
Currency Manipulation
With its entry into the WTO, China realized its economy will be exposed to intense global competition and it is imperative that its currency remains attractive to foreign investments. The tension between these two forces over China’s trade policies partly stems from what the United States calls a “currency manipulation” of the Chinese RMB Yuan. For years, US policymakers have accused China for intentionally undervaluing the Yuan to boost the country’s attractiveness in international trade. According to the Alliance for American Manufacturing (AAM), the RMB is undervalued by a staggering 40 percent against the US dollar. As a result, the AAM claims China responsible for the loss of millions of US manufacturing jobs since investors find it more attractive and cost effective investing in China. In addition, the currency manipulation is being blamed for the huge trade deficit of a record $268 billion amassed in 2008, a rise of a massive 44,673 percent since 1985 (see Appendix 2).
Early this year, US Treasury Secretary Timothy Geithner wrote that “President Barrack Obama believes that China is manipulating its currency” (Kaneene). For the first time, the US formally recognized something that the Bush administration has been for years trying to prevent. The People’s Bank of China’s maintained that such allegation is “untrue and misleading” and could “sidetrack the effort to track the real cause of the financial crisis” (“China swirls”). In addition, Zuo Xiaolei, senior analyst at Galaxy Securities, noted that the price advantage of the country’s exports can be traced back to the low cost of labor.
Summary of Chapters
Introduction: Provides an overview of the shifting Sino-US trade relations and the significance of historical developments on the current global trade landscape.
History's Impact: Examines the legacy of the Opium Wars and China’s eventual accession to the WTO as foundational elements for modern trade friction.
Dumping and Anti-Dumping (AD): Analyzes the implementation of protectionist policies and how both nations utilize anti-dumping measures as a form of economic retaliation.
Financial Markets Friction: Explores structural issues including Intellectual Property Rights, currency valuation debates, and the risks associated with credit derivatives and foreign investments.
Conclusions: Synthesizes the multiple factors driving trade conflicts and suggests that future progress depends on mutual understanding and negotiation.
Keywords
Sino-US relations, trade friction, anti-dumping, protectionism, WTO, currency manipulation, RMB Yuan, intellectual property rights, IPR, financial markets, credit derivatives, trade deficit, FDI, global economy, economic policy.
Frequently Asked Questions
What is the primary focus of this paper?
The paper focuses on the multifaceted trade and investment friction between the United States and China, analyzing the historical, political, and economic drivers behind these tensions.
What are the main thematic areas covered?
The core themes include historical precedents, anti-dumping regulations, intellectual property protection, currency valuation, and the role of state-owned enterprises in foreign investments.
What is the ultimate research objective?
The objective is to understand why Sino-US relations have become increasingly strained and to evaluate how these economic disputes might evolve in the future.
Which scientific methods are applied?
The study employs a descriptive and analytical approach, synthesizing trade data, economic policy reviews, and international relations theory to explain the bilateral economic impasse.
What does the main body explore?
The main body details specific conflicts, such as the "tire tariff" dispute, allegations of currency manipulation, failures in IPR enforcement, and the complexities of Chinese investment in US assets.
Which keywords characterize this work?
Key terms include Sino-US relations, anti-dumping, protectionism, currency manipulation, and intellectual property rights.
How does the author view the impact of the Opium Wars on modern trade?
The author views the Opium Wars as the starting point of a complex struggle for economic power, where the West forced open Chinese markets, leaving a legacy of historical resentment that still influences modern trade perceptions.
What is the author's stance on the "currency manipulation" accusation?
The paper presents a balanced view, noting that while US policymakers and manufacturers blame the undervalued RMB for the US trade deficit, experts like Alan Greenspan and Tibita Kaneene argue that the impact is often exaggerated compared to other factors like technological advancement.
- Citation du texte
- Markus Karmann (Auteur), 2010, Trade frictions between China and the US, Munich, GRIN Verlag, https://www.grin.com/document/193111
