Talking Points, August 12-26, 2009
August 12 - 26, 2009
|U.S. Trade Representative Ron Kirk and Chinese Minister of Commerce Chen Deming (USTR photo)|
International trade was hammered in the last months of 2008. U.S. exports and imports have gradually edged up since April, but many export-oriented factories in China remain shuttered. Chinese exports in 2009 are 22% lower than they were at this time last year. Of course, Chinese exports, especially since the country entered the World Trade Organization (WTO) at the end of 2001, have done much to power China’s rise. Their rapid expansion can be seen in the chart below.
By 2000, China was the world’s 8th largest exporter of goods, but only accounted for 4% of the world’s exports. The U.S. was the top exporter, with about 12% of the world’s exports. By the end of last year, however, China had passed the U.S. in the export of goods and was just behind Germany. Both countries exported about 9% of the world’s goods. While total U.S. goods exports have risen a great deal, the American share of world exports shrank to 8%.
Meanwhile, Americans eagerly bought what Chinese and others had to sell. U.S. imports more than doubled between 2000 and 2008. Because others increased at a still faster rate, the American share of total world goods imports fell from 18% to 13%, still number one by far.
In 2008, the U.S. imported $865 billion more in goods than it exported. From China alone, the U.S. bought $268 billion more in goods than it sold. China’s trade surplus with the entire world, including the U.S. was $295 billion.
The U.S. does excel in the export of commercial services. These include travel, transportation, and telecommunications. In 2008, the U.S. exported $158 billion more in services than it imported. China’s 2008 services figures are not yet available, but in 2007, it imported slightly more services than it exported.
Significant disputes have accompanied this massive shift in trade fortunes. The most enduring of these concerns the value of China’s currency. U.S. officials have argued that China’s government kept the value of the yuan artificially low to aid exporters and to make it more expensive for Chinese to buy imported goods. Chinese officials denied this, but a couple years ago decided to peg the value of their currency to a basket of currencies, including the U.S. dollar, instead of just the dollar. As a result, the value of China’s currency appreciated dramatically until last summer. The table below documents the appreciation and shows that this rise in value stopped as the government began to worry about the economic downturn.
|Oct. 1998/ June 2005||8.28|
Although candidate Barack Obama complained that the Chinese government needed to allow the yuan to rise in value, President Obama and his officials have not pushed the issue. Wanting Chinese cooperation on key issues and sensitive to Chinese grumbling about the security of their investments in U.S. government debt, the administration has scarcely mentioned the issue in public.
Other disputes, however, have continued. The U.S. recently argued that Chinese firms sell tires at artificially low prices so as to secure market share. The Chinese have just filed formal WTO complaints regarding U.S. restrictions on Chinese poultry sales and have argued that unilateral American decisions to impose “anti-dumping” tariffs on Chinese steel pipe and other products violate agreements and must be removed. And U.S. officials now contend that China’s government has restricted foreign purchase of various mineral resources such as manganese and zinc to aid its own manufacturers.
In 2009, WTO panels ruled in favor of the U.S. in two disputes. In those cases, the U.S.
persuaded regulators that Chinese laws and enforcement failed to adequately protect American intellectual property and that the Chinese government violated its WTO pledges by restricting American firms’ ability to distribute books, music, and films. The image to the right lists formal U.S.-China WTO disputes since 2002. Click on it to download a pdf version of the list.
These are only the most formal of many U.S.-China disputes. Leaders in both countries have spoken out against economic nationalism, but they are under pressure from important groups to act quickly to preserve industries and to find a way to put millions back to work. Some analysts think the worst of the recession is over, but others worry China’s lending-driven boom in real estate and other markets and the return of Americans to car showrooms may just be temporary.
China’s leaders are being forced to embrace a central lesson of the economic meltdown – depending too much on foreign markets is a gamble. While that bet paid off handsomely for a long time, leaders are now scrambling to stimulate domestic consumption to make up for diminished foreign demand. Such restructuring won’t be quick or easy, just as American debt addiction has left us staggering with a ferocious hangover.
The USC Global Conference in Taipei October 29-31 will address many of these issues. Discounted early bird registration ends soon, so click here to learn more. USC U.S.-China Institute presentations will explore these critical issues as well. Specialists will look at China’s population challenges, at Chinese investments abroad, and at what globalization has meant for Chinese workers. In the meantime, please visit US-China Today to see articles about an American-style law school in China, about Wen-mania, and one of the first “Confucius Classrooms” in America.
Pacific Asia Museum
46 North Los Robles Avenue Pasadena, CA 91101
Time: 8:00PM - 10:00PM
The Pacific Asia Museum presents this screening as part of the Chinese Film Festival.
08/18/2009: The Employee after Chinese Public Institutional Reform: The Changing Employee-Organizational Relationship
University of California, Berkeley
Numata Seminar Room, 2223 Fulton Street, 6th Floor , Berkeley, CA
Time: 12:00PM - 1:00PM
Chang Li will examine the changes in employee-organizational relationships resulting from Chinese Public Institutional Reform.
08/20/2009: Autumn Gem
Pacific Asia Museum
46 North Los Robles Avenue, Pasadena, CA 91101
Phone: (626) 449-2742
This project explores the extraordinary life of the Chinese revolutionary heroine and women’s rights activist Qiu Jin (1875 – 1907).
08/16/2009 - 11/29/2009: Steeped in History: The Art of Tea
The Fowler Museum at UCLA presents an exhibition on the history of tea in Asia, Europe, and America through art.
11/03/2008 - 11/03/2009: Ancient Arts of China: A 5000 Year Legacy
2002 North Main Street, Santa Ana, California 92706
Bowers Museum presents a collection that portrays the evolution of Chinese technology, art and culture.
11/14/2008 - 11/14/2009: Chinese Art: A Seattle Perspective
Seatle Asian Art Museum
1400 East Prospect Street , Volunteer Park , Seattle, WA 98112–3303
The Seattle Asian Art Museum presents an opportunity to see a collection with representative works from each dynastic period.
11/15/2008 - 11/15/2009: Masters of Adornment: The Miao People of China
2002 North Main Street, Santa Ana, California 92706
The Bowers Museum presents a collection of exquisite textiles and silver jewelry that highlights the beauty and wealth of the Miao peoples of southwest China.
02/12/2009 - 02/12/2010: Art of Adornment: Tribal Beauty
2002 N. Main, Santa Ana, CA
An exhibit featuring body adornments from indigenous peoples around the world
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Michael Meyer talks to USCI about his new book "In Manchuria," which presents unique profile of China's legendary northeast territory.