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The Chinese Economic Area Embracing Relations with the USA

Free essayRecent years’ China has developed rapidly. This event has attracted the attention of all countries. China’s rapid development led to different debates between China and the international community. These debates include the aspects of expanding influence, growing demand for energy supplies and military forces. It is essential to understand the path toward the greatest development and achievements of China. Nowadays, the development of China is of a great importance for all countries in the world. It majorly depends on the fact that China takes the largest part in world’s trade. Since the economy of China was started up and reformed, the average China’s economy had approximately 9.5 percent of annual GPD growth. It turned out to be the highest growth rate in the world’s economy. In 1978, the total China’s foreign trade was $20.6 billion. Admittedly, this amount accounted only one percent of the total world’s economy. Currently, China accounts about $850 billion of foreign trade. It is the third national economy in the world. Moreover, China’s national economy accounts 4 percent of the world economy. China has got a name of the most rapidly developing country in the world. Foreign investments have had the greatest impact on China’s development that accounts hundreds of billions of dollars. Additionally, more than trillion dollars of nonpublic investments have made the other input in national development.

Nowadays, China provides mobile service and manufacture for almost every country in the world. A dozen years ago, China had poor mobile/telecommunication service. Today, China cooperates with more than 300 million mobile subscribers.

As the matter of fact, Chinese economy benefits majorly from integration by means of liberalization of trade policies. The USA and Chinese economies have met an opportunity costs related to the USA’s isolation from East Asia. There exist an opportunity that politically stable and economically integrated Chinese economic area is in a great strategic interest of the USA. Over two last decades, China became the major player in the world’s economy. Moreover, Chinese integration into the world’s economy turned out to be the greatest of recent events. According to the Wall Street analysts, the emergence of China is proclaimed to be the event of the decade. There is a presumption that, since 2040, China will overtake the USA as the biggest economy in the world. Goldman Sachs has been investigating the development of Chinese economy over the past years. As a result, an aggressive strategy to enter China was implemented. Goldman Sachs is the USA global investment based national bank that started its business in the Asia-Pacific region. A headquarter of the bank is located in Hong-Kong. There are opinions that Chinese capitalism is not based on law, free markets and respect for property rights. This essay investigates the trade impact of China on the basis of global scale and China’s emergence as a global player. China, as a global trade player, is exceptional in terms of its depth and speed. Comparing China to most emerging markets, China has more open economy. In 2005, the total amount of imports and exports of services and goods reached 70 percent of GDP while the figure in the United States is less than 30 percent. United States and China are two biggest and economically stable countries in the world. They both compete for a leading position. This essay investigates the part of the USA in China’s economic rapid development and China’s impact on the USA.

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Description

Investigating American-Chinese relations, my working thesis is that on the international trade scales the countries are mutually dependent. They friendly coexist in the economic conditions they were creating for a long-time.

The subject to determine is China’s emergence and its implementation as for the USA policy. The USA has just started to understand the whole significance as for what is going on in China. It is evident that America has already understood the value and meaning of China as a global player. As the matter of fact, China has appeared in different events of American history during the last fifty years. The USA-China relations continue for a long time. From 1949 to 1971 China was expected to be the totalitarian behind the Bamboo Curtain. After that, China and America were allies during the Cold War. Therefore, it is seen that the China’s enter in the western and world’s economy was welcomed (Rodrigues, Blazquez & Santiso, 2006). However, the appearance of China in the world trade market was considered by America as a one-flow relation. The USA accepted this process as ideas and goods that were flowing in China in order to transform the life in the country. All that services have massively transformed Chinese life. The USA and Chinese economies have met an opportunity costs related to the USA isolation from East Asia.

The next period in American-Chinese relations lies in the period starting from 1989 to 1995. The American attention was primary focused on the Chinese human rights record (Harding, 1992). Later, American attention was paid to the earthquake in the Chinese economy, prompted by the rapid reforms in marketization and acceleration. China, as a global trade player, is exceptional in terms of its depth and speed. Comparing China to most emerging markets, China has a more open economy. During that time, America has kept interest in how such changes would affect Chinese prosperity, development and liberation of ordinary people daily lives. The development in China between skeptics and admirers prompted a debate in the USA. They were arguing as for whether socio-economic liberalization would lead to personal and political liberalization. Debates in the USA did not refer an impact of China on the world trade. Due to American-Chinese relations, China has been accepted as the junior partner of America in conflict regions.

However, the perception of China today reflects some other transformations related to serious economic events. During the last century, Chinese economic performance has rapidly grown. Therefore, China has got an enormous impact on the world’s market. American corporations have invested in Chinese economy over $50 billion (Li, 2013). However, while investing money in China’s development, American investors bothered about their benefits to shareholders and their profitability. Generally, American and Chinese economies are extremely complimentary. They can compete in relatively small numbers of economic areas. China exports goods to America. The export helps USA to keep the inflation rate and ease burdens for poor and middle-class American consumers. On one side, America ran $200 billion trade deficit with China last year. On the other side, the violation of intellectual property rights have threaten the American producers of entertainment products, chemicals, automobile parts, and other manufacture with billion dollars annually. China created its particular open economy. If compare the Chinese economy to the Japans’, it would be seen that China’s economy is 20 times as high as Japans. This fact majorly depends on the event that Japans economy was essentially closed to the world’s economies till the late 1970s. Nowadays, China’s trade income is 80 percent of GDP. Several years ago, American government did look at China’s development through the length of what the USA meant for China. Nowadays, American government is investigating what China means to the United States.

Chinese-American partnership has created some mixture of worrisome and positive effects. The long time partnership with China has brought America both advantages or disadvantages. As the matter of fact, advantages majorly overweight disadvantages. Essentially, China is the fastest market of growing export for America. This market has got up 300 percent of annual trade last decade. The other benefit is that the Chinese export to the USA is 5 times higher than to the rest countries of the world (Li, 2013). American corporations have invested over $50 billion dollars in China’s development. In turn, China has purchased $200 billion dollars in treasury investments. Therefore, such kind of investment gives Americans an opportunity to keep interest rates low and finance their debts. During the last decade, China was expected to be the biggest exporter to the USA. Only last year, China has exported goods and products for a sum over $15 billion to Wal-Mart. Even though Chinese and American economies can be competitive in several areas, they are largely complementary.

The worrying side of American-Chinese interaction includes some events, as well. In 2005, the USA ran $200 billion trade deficit with China. It was the largest amount of trade deficit in the world. The USA excels in the value chain of products manufacture. However, each year China becomes an increasingly competitive partner. Contradictory, Chinese workers majorly earn from 5 to 10 percent of Americans’ workers income. Moreover, America cannot compete with China in footwear, electronic goods, and scale-textiles production. From recent time, the same competition refers to other sectors of manufacture, such as automobile manufacture. In result, the question about the value of renminbi has become a doubtful issue. The other disadvantage of China’s rough development is the fact that the country has a great appetite for imported oil and energy. China’s appetite for energy resources is growing faster than in the rest of the world. Such oil demand has contributed to the crude oil prices in the world. Admittedly, there were consequences (Wang & Schuh, 2002). According to the past decades’ changes, the American economy is interpreted in different ways. However, the balance sheet means that debts and benefits of China’s economic rapid development will be the subject of debates for decades. Eventually, with debates bouts of protectionism, trade fictions and actions, and calls for trade wars will come.

The USA had a similar situation with Japan in the 1980s. However, Chinese-American relations have some particularity that changes the picture and makes it different. Economic terms determine China as not just country in Asia. Economically, China is the center of an unprecedented and remarkable integration of the economy in East Asia. Moreover, China’s trade with South and East Asia has grown in bounds and leaps. China’s trade with countries of South and East Asia (Japan, Taiwan, Korea, Malaysia, Singapore, Philippines, Thailand, and India) has grown from 250 percent (Japan) to 1025 percent (India). The trade with all these countries is providing a massive balance of trade surpluses with China. Therefore, Southeast Asia is exporting commodities, goods and products, energy resources to China. These countries feed China’s exploding manufacturing sector. This sector is selling goods and products to the USA and Europe while pulling up huge trade surpluses. Relating to these flows, the alterations in China’s investment patterns were made.

The Chinese economy rapid development leads to changes in the world economy, as well. Therefore, there are several changes that should understand policymakers. The USA policy deficit comes from Asia-Pacific. The percentage of trade deficit has not risen for a decade. The origin of the deficit was simply moved from South and East Asia to China. The USA interaction with China is also reflected in this process. It means that any trade action that America acts can strike China. Moreover, such American actions will be able to destroy countries with China intertwined economies. It majorly depends on the fact that China is the biggest trade partner of Korea, Taiwan, and Japan. American-Chinese relations are not simple. These countries depend on each other. China manufactures products and goods for American citizens, because of low priced working resources (Friedberg, 2005). Poor Chinese people are able to work 10 or 20 times cheaper than American people do. The USA has supported China in the period of decline, invested money in its development, and left the right to control all actions taking place in national trade market of China.

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China’s Security Concerns Related to the USA

Contradictory, the impact of China on the USA is marked and real, and it increases every year. The impact of China on American national security cannot be felt by common citizens. However, the USA government and security specialists paid attention to it. During the last 10 years, China’s military capabilities were observed in DDQDR (Defense Department’s Quadrennial Defense Review). In the review, China is considered to have a huge potential to compete with the USA. Moreover, China can field disruptive technologies, which will be able to offset traditional USA military advantages over time. Alternatively, The USA keeps investing funds in development of Chinese advanced military technologies such as unmanned aerial vehicles, cruise and ballistic missiles, strategic nuclear strike capabilities, and advanced submarines. The military planning of China is mainly directed at one target. China is going to use a force to prevent a formal Taiwan independence (Saunders, 2000). In the foreseeable future, Chinese government has no intention to retake Taiwan by force. Moreover, China does not intend to use the force unless Taiwan rules out the possibility of reunification or asserts independence.

Additionally, China has other security concerns that do not press other territorial ambitions. China has settled the border dispute with central Asia states, India and Russia. There are also cool disputes and competing claims in the South Asia Sea. Recently, Admiral Blair stated that China is not expected to be able to conduct any military campaigns. It depends on the fact that China could not have the ability to hold or take Taiwan, any inhabited Japanese island, or pieces of territories from Russia or India. It goes without saying that China possesses enough reasons to not undertake foreign adventures. The remaining challenges that China faces are daunting while its economic achievements are truly impressive. Japan is expected to achieve the level of GDP that China had in 2004 only in 2020. Even after Japan would achieve the level of China’s GDP, China still would leave Japan at 10 percent of GDP per capita. There is an array of internal problem in Japan, which can destroy even the most stable leadership. Statistics prove that approximately 13 percent of people have moved to urban from rural areas (Zhou & Leydesdorff, 2006). The Chinese Party leadership must concentrate on solving its internal problems if they meet its key priorities such as maintenance of stability, power and economic growth. China considers these priorities to be the key elements of assuring national success.

After a rocky start, the Bush administration has mainly pursued sound and pragmatic approach to relations with China. Additionally, the USA government has kept the Taiwan issue from escalating. This event mainly relates North Korea Nuclear negotiation. Moreover, Japan had a desire to expand trade relations with bearable fictions. In turn, Japan got a modest support from China in the war on terror. Recently, China has provided $80 million for Afghanistan reconstruction aid. Five months ago, it was articulated that China-American relations have gotten a new principle. This happened because China became a responsible shareholder in the world market and the international community. This fact helps China to strengthen and sustain the international system from which China benefits itself. There are benchmarks to measure how China has gotten a status of a responsible shareholder. The international community considers Bush Administration to deserve the highest mark for handling its relations with China on diplomatic and leadership level. Generally, there is a common opinion that the USA is a soft power in relations with China. They say it happens because of national American values, ideas, and desire of other people to live the American life style. In the last 60 years, these values help America to impact the rest of the world. American ideas made people able to understand what is good, what is best, what is trivial, what is ordinary, and what is not good for the USA. Later in 1979, China has adopted American values. However, the process of adoption turned out to be a forceful engine for national transformation. Nowadays, according to interviewing, American-Chinese cooperation on private sector does not find hostility but admiration for the United States of America. The modest admiration of Chinese people does not reflect to those in time of Bush Ist and Clinton, when politicians were talking about the language of freedom, human rights protection and respectful international system. It worth noting if economic reforms in China can either support American economic or wave it. Anyway, it is a transient phenomena that deeply troubles the USA as an indicator of political reforms in China.

Unquestionably, China has reached its rise, popularity and prestige in the areas compared to the USA. It has partly appeared as a result of commercial and political ties, and partly as the consequences of the general decline in respect to America. Admittedly, these short-term developments of long-term tendencies are threatening to American interests in the region. Understanding the American-Chinese relation, it is wrong to say that they are engaged in the zero-sum game. Both countries have benefits and worries. China has now a goal to create a series of states in its own image. China did not plan to damage or to harm the USA alliances in the region. Moreover, it is compulsory to understand that American presence is the greatest counterbalance to risen Chinese presence in the international community.

American participation in the development of Asian countries brings different opinions. However, there is a positive opinion that the USA is able to maintain sizable and strong presence in the region because it is a balance of power, support and opportunities that Asian countries need. As the matter of fact, many countries of Asian region do not want to built tie relationships with China because of their relations with America (Bader, 2006). China has grown as a huge military power. Therefore, America continues to play a strategic role in East Asia development. It is the reason of why it is impossible to create a balance of power in the Asian region. The clear understanding of long-term national interests will outlast the short-term weakness of the USA image in the Asian region.

The information presented in the essay proves that American-Chinese relations are extremely complicated. They continue for a long period. However, if one investigates all interaction that took place during the long time of American-Chinese cooperation, it would be obviously seen that either the USA or China has its hidden interests and benefits due to this partnership. Moreover, the time of cooperation lead countries to mutual dependence on all sides of social, political and economic life. Nowadays, the situation in the Asian region is doubtful and unstable. There are opinions that America has lost their power in Asia because the power of China has risen. However, one should not forget about the fact that the USA was the main investor in China’s development as the largest international trade player.

Conclusion

There are widespread fears related to China’s political stature and rapidly growing economy. However, China remains to commit its peaceful economic rise. During the short time, China has coped with poverty, embraced economic globalization, and improved relations with the rest of developed countries in the world. China’s council on foreign relations commented that the further China’s development directly depends on world peace. Chinese economy has grown approximately 10 percent for a quarter century. In 1977, China took the thirty position in the list of advanced trading countries in the world. Nowadays, China holds a deserved third position in the world’s trade countries. The GDP of China has increased four times from 1980 to 2000. During the past 25 years, 400 ordinary people were lifted out of poverty. The disadvantage of China’s rough development is the fact that the country has a strong appetite for imported oil and energy. China’s appetite for energy resources is growing faster than in the rest of the world. This fact helps China to strengthen and sustain the international system from which China benefits itself. Moreover, China became the largest recipient of foreign investment in Asia, and the second largest recipient in the world. Foreign exchange reserves accumulated by China accounts $820 billion. The current account of world economic surplus was $148 billion last year. China became the greatest trade partner of the USA and a world known manufacture of goods and products due to its open economy. The Bush administration has mainly pursued sound and pragmatic approach to relations with China. Recently, China became a responsible shareholder in the world market and the international community. The international community considers Bush Administration to deserve the highest mark for handling its relations with China on diplomatic and leadership level. The economic reforms in China can either support American economic or wave it. Anyway, it is a transient phenomena that deeply troubles the USA as an indicator of political reforms in China. Understanding American-Chinese relations, it is wrong to say that they are engaged in the zero-sum game. Both countries have benefits and worries. American presence is the greatest counterbalance to risen Chinese presence in the international community.

Source Evaluations

Bader, J.A. (2006). China’s Emergence and its implications for the United States. Brookings. The author investigates the rapid development of China and makes readers understand its relations with America and other countries of the Asia-Pacific region. Dr. Barden brings the light on how the United States improved China’s development and what was the reason for American input. He provides analysis, dialogues, cutting-edge researches and publications that are focused on China’s rapid development and American participation in this process. He also investigates the implications for the two countries, China’s neighbors and the rest of the world. Dr. Barden addresses variety of critical issues related to modernization of China. Admittedly, he also discovers national domestic, trade, economic challenges and political policies.

Li, C. (2013). US-China relations and the Obama-XI meetings. Brookings. In his work, Cheng Li examines the meeting between Chinese President Jinping and President Obama. The author of the article focuses the main attention either as the Presidents did, on the economic situation of both countries. Li also represents the opinion that the slowdown of Chinese economy has a negative impact on the USA. The author also observes long-term trade relations between two countries and positive sides of cooperation. He seeks ways to produce high quality and strong impact policy investigation in areas of vital importance for China development and ongoing American-China relations.

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