China and Us RelationsJoin now to read essay China and Us RelationsGETTING THE FACTS RIGHTChinas rapid development has attracted worldwide attention in recent years. The implications of various aspects of Chinas rise, from its expanding influence and military muscle to its growing demand for energy supplies, are being heatedly debated in the international community as well as within China. Correctly understanding Chinas achievements and its path toward greater development is thus crucial.
Since starting to open up and reform its economy in 1978, China has averaged 9.4 percent annual GDP growth, one of the highest growth rates in the world. In 1978, it accounted for less than one percent of the world economy, and its total foreign trade was worth $20.6 billion. Today, it accounts for four percent of the world economy and has foreign trade worth $851 billion — the third-largest national total in the world. China has also attracted hundreds of billions of dollars of foreign investment and more than a trillion dollars of domestic nonpublic investment. A dozen years ago, China barely had mobile telecommunications services. Now it claims more than 300 million mobile-phone subscribers, more than any other nation. As of June 2004, nearly 100 million people there had access to the Internet.
In 1996, the People’s Republic of China was a regional power. In 1999, it acquired the Guangdong Straits and the Inner and Trans-Siberian islands in the South China Sea for $1 billion, plus $1.8 billion in cash.
China entered into a partnership with the International Monetary Fund in 1997, and in 2004 the US entered into a joint program with China Under Foreign Investment Initiative to help address some of the nation’s financial and economic challenges. Over a dozen Chinese companies received more than $10 billion from the IMF between 1997 and 2003, mostly to address China’s financial and economic needs. In 2005 the IMF announced the creation of a Global Financial Stability Board. In 2006, China was awarded the Nobel Peace Prize and the G20 and the United Nations in 2009. The G20 is chaired by Japan’s President Abe. The G20 is scheduled for its first meeting July 9-16.
The US has been trying for decades to reform the economy in the name of saving, but for the past decade, most Western countries have not done so. They have tried to raise prices, but they still don’t raise productivity. On the other hand, China is still the world’s leader in gross domestic product. The US is also pursuing reforms that will boost domestic Chinese exports, reduce the influence of China as a leading economic power, and improve productivity.
More often than not, international trade matters. In many countries, China is among only one of many industrialized nations — the world’s fifth largest by population and GDP — that compete for the right to choose who to promote, and most of these countries want the right to establish their own economic sectors. At home the United States and other allies are pushing for better regulation and economic development. Europe and Japan are pursuing market-oriented strategies to reduce the influence of China and its economic dominance on their economies. In North America, trade with China is growing rapidly and in the most important economies is expected to increase by more than $20 trillion in the year 2010. A comprehensive economic analysis by the IMF found that China’s trade volumes in advanced economies are projected to exceed US$90 trillion by 2010, and that China’s share of the world’s manufacturing output in the US increased by 10% between 1980 and 1998.
The United States and other members of the European Union and some European countries have done more to bolster U.S. trade with China and increase its share of the international market. These measures include a U.S.-Chinese trade surcharge on goods imported to China, increased tariffs on Chinese products imported from the European Union and the United Arab Emirates, new rules for the Export-Import Bank, investment restrictions on Chinese goods from some suppliers in many member countries, and an accelerated return on investments to U.S. businesses. Since 2004 the U.S. dollar has remained the world’s primary source of exports to China.
China has also initiated the largest investment in agriculture in history. In 1999, China bought more than $20 billion in new agricultural equipment. Since 1997 and 2004 the Chinese government has been encouraging European producers to expand production by 50% to 80%. Agriculture is now valued internationally at $11,200
Indeed, China has achieved the goal it set for itself in 1978: it has significantly improved the well-being of its people, although its development has often been narrow and uneven. The last 27 years of reform and growth have also shown the world the magnitude of Chinas labor force, creativity, and purchasing power; its commitment to development; and its degree of national cohesion. Once all of its potential is mobilized, its contribution to the world as an engine of growth will be unprecedented.
One should not, however, lose sight of the other side of the coin. Economic growth alone does not provide a full picture of