BEIJING, April 1 (Xinhua) — Steady and healthy trade ties between China and the United States will benefit both sides as well as the world.
U.S. President Donald Trump on Friday signed trade-related executive orders and one of them was aimed at reviewing the cause of massive U.S. trade deficits.
The 90-day investigation on “trade abuses” will focus on a dozen U.S. trade partners including China, and the data will be used to shape trade policy of the new U.S. administration.
Indeed, China is America’s largest source of trade deficits, which reached 347 billion U.S. dollars last year.
However, the figures are misleading as they do not truly reflect the China-U.S. trade relationship.
Bilateral trade in goods hit 519.6 billion U.S. dollars in 2016, an increase of 207 times compared with the figure in 1979 when the two countries established diplomatic relations, according to the Chinese Commerce Ministry.
Trade in services between the two countries exceeded 110 billion dollars last year and two-way investment reached 170 billion dollars.
Now China has become the largest trade partners of the United States and the United States is China’s second largest.
Obviously, both countries, especially the United States, have greatly benefited from such a close trade relationship.
From 2001 to 2016, U.S. exports of services to China increased 15-fold, with the U.S. service trade surplus rising 29-fold, the Chinese Commerce Ministry said.
In 2015, bilateral trade and two-way investment created about 2.6 million jobs in the United States and contributed 216 billion dollars to the U.S. economy, equivalent to 1.2 percent of the U.S. GDP, said a report from the U.S.-China Business Council.
China is expected to be the world’s largest importer by 2022, when U.S. exports to China will surpass 530 billion dollars and create more than 3.34 million jobs.
As China and the United States account for a third of the global economy and bilateral trade accounts for a fifth of global trade, the steady and healthy development of China-U.S. trade ties is significant for the stability of the world economy, which is struggling to recover.
A trade war between the two largest engines for global economic growth will benefit neither country and will bring disastrous consequences.
As to the massive trade deficits with China, it is the result of the evolution of global distribution of industries and global value chains. China, as a main manufacturer of staple commodities especially consumer goods, has advantages in labor-intensive industries compared with the United States.
China’s trade surplus with the United States is mainly in goods trade due to imbalanced global trade rules, under which service trade liberalization is undergoing a slow process.
U.S. restrictions on exports in such areas as high technology have further hindered U.S. exports to China.
In addition, more than 40 percent of the trade surplus was created by foreign-invested enterprises in China, which would be the first to be affected by a trade war.
If calculated through the value-added approach instead of the existing rules of the origin in trade, the U.S. trade deficit with China will be only half of the current volume, the U.S.-China Business Council said. < As mutually beneficial cooperation in economy and trade has become one of the pillars in China-U.S. ties, it is believed that Washington will seize the opportunity to work with China to build a relationship that upholds the principle of no conflict, no confrontation, mutual respect and win-win cooperation.
by Xinhua writer Chen Shilei
