Sino US Economic And Trade Is Worth Looking Forward To

In order to reduce

At the beginning of this year's trip to the United States, President Hu Jintao gave us a high opinion that the visit opened a new chapter in the cooperation between the two countries.

In fact, apart from repositioning the strategic significance of bilateral relations between China and the United States, the economic and trade relations between China and the United States are ushering in a new round of development opportunities.

China's largest purchase is for the United States.

In fact, the economy of China and the United States have great complementarity, the United States has high and new technology and high labor productivity, and the vast market of China and the high quality and low cost manufacturing industry will be beneficial to the development of the US economy.

Chen Deming, Minister of Commerce, has always stressed that if the United States can change its vision policy towards China and liberate its export products, it is entirely possible for the two countries to win a win-win cooperation.

There are structural reasons for China's export growth to the US.

In recent years, China's export surplus with the United States has increased rapidly.

Some people in the United States think that because China's RMB exchange rate is too low, China has made unfair competition, making it cheaper for the United States.

From this, some American politicians have also extended that China's export to the US has created employment pressure in the United States, and the unemployment in the United States has also been attributed to China's vigorous economic development.

However, seriously studying the global economic statistics, we can find that the US deficit and China's surplus are the result of economic globalization, which is irrelevant to the change of China's RMB exchange rate.

American enterprises have been committed to the development of global markets and important drivers of economic globalization.

With the development of globalization, the trend of American enterprises purchasing and configuring products and parts all over the world is becoming more and more obvious.

So US multinationals import their products and spare parts from their overseas companies as American imports. The US trade deficit is of course serious.

But if these "self purchase" actions are excluded, the US trade deficit will drop by about 30%.

In addition to importing products from the company's overseas branches, American multinationals also outsource the production of some products to other countries' enterprises, thereby obtaining high profits.

For example, Apple Corp, which has a very high profit in 2010, sells its IPAD in the US for 499 US dollars.

By decomposing its cost structure, it can be found that Japan or South Korea's optical touch-screen manufacturers can get $95, and the data processor manufacturers can get $26.8, and the manufacturers of memory chips can get $29.5 to $118. The Foxconn company assembled in China can get $11.2, and the rest of the profits go to Apple Corp.

Over the past 10 years, the overseas assets of US multinationals have increased by US $1 trillion and 100 billion a year. One of the important reasons is that the profits of overseas employees are even higher.

That is why China's trade surplus with the United States increased sharply when the yuan rose 20% against the US dollar in 2005~2008 years.

This shows that China's trade surplus has nothing to do with the exchange rate of the renminbi.

In order to reduce the trade deficit of the United States, the United States must reinvigorate the manufacturing sector and increase exports to balance trade.

But the United States is unlikely to return to labor-intensive low-end manufacturing.

Some of these industries will continue to stay in China while others will flow to other emerging economies such as India and Vietnam.

Therefore, the United States can not rely on currency depreciation to enhance export competitiveness, and can only earn more profits by developing and exporting more advanced manufactured products. Therefore, lifting the restriction on high technology export to China is an important measure to balance Sino US trade.

On the other hand, the trade deficit in the United States is largely due to the fact that the United States has to import large quantities of oil and other energy sources, and the rising energy prices have also contributed to the increasing trade deficit in the United States.

To reduce the trade deficit, the United States must reduce its dependence on imported energy.

In order to reduce the demand for fossil fuels, a large number of new and renewable energy sources have become a strategic choice.

In this regard, technical cooperation between China and the United States will definitely be beneficial to both sides.

Finally, in order to balance Sino US trade, the United States can open more markets to China's investment.

In fact, in recent five years, with the rapid development of China's economy, the number of Chinese enterprises investing in and developing business in the US has increased significantly. The number of Chinese funded enterprises in the US has increased from more than 900 in 2005 to more than 1300 at the end of 2010.

In the nine months from 1 to September 2010, Chinese enterprises have increased 47 thousand jobs for the United States.

As Benjamin Peggy, Professor of Northwestern University, published in the book "dancing with the Dragon: how Americans view China's rise", the average American has gained a lot of benefits in the US business with China. Therefore, although many Americans are "nervous" about the rise of China, most of them advocate cooperation between the United States and China.