June 14, 2005
- Contact:
- Edward Gresser (202) 608-1241
John Frisbie (202) 429-0340
A New Perspective on the US-China Trade Debate: Asia's Emerging Union
A new paper sponsored by the China Business Forum puts the current US-China trade debate in a broader context. In US-China Trade in Perspective: Asia's Emerging Union and Implications for the United States, Edward Gresser takes a closer look at the recent US-China trade and investment figures, and finds that
- Asian integration, based on the opening of China and other geopolitical changes, is creating a fundamentally and genuinely more competitive Asian economy, as capital from more-advanced regional partners is combining with China's large, low-cost environment.
- The series of US-China trade and macroeconomic disputes that have emerged in recent years must be viewed in the context of the larger transformation of the Asian economy.
- Asia's share (including China) of the US total trade deficit has actually declined significantly since 1992 (though growing in absolute terms), as our trade deficit with the rest of the world has risen dramatically. US imports from Asia (including China) during this period have grown at roughly the same pace as imports from Europe, Canada, and Mexico.
- US exports to China nearly tripled in the five years after 1999, far exceeding forecasts prior to China's World Trade Organization entry. America's exports to China have risen about 10 times as fast as exports to the world during that time.
- The United States needs to improve its competitiveness and productivity in response to the challenge of Asian integration. Priorities should include restoring control over government finances and raising national savings; coordinated measures to reduce global trade and financial imbalances; adopting new measures to open markets and enforce trade agreements; strengthening government commitments to basic science; ensuring that education reforms, worker training, and visa policies allow American businesses and universities to attract international talent; and seeking continued improvements to high-tech and traditional infrastructure.
About the Author
Edward Gresser is director of the Project on Trade and Global Markets at the Progressive Policy Institute. This paper represents the personal views of the author and does not necessarily reflect positions of the Progressive Policy Institute.
About the China Business Forum
The China Business Forum, Inc. (www.chinabusinessforum.org) was established by the US-China Business Council to promote broad-based policy discussion and greater understanding in both China and the United States of the economic systems and business methods of each country and of the role of commerce in the overall relationship between the United States and China.