Submitted By hanhhailey
Words: 830
Pages: 4


The United Stated and China have traded on good terms for over thirty years; these two countries are the glue that holds the economic trading system together. U.S.-China trade rose rapidly after the two nations established diplomatic relations in January of 1979. Trade between two countries has increased since that time, growing from $4.8 billion in 1980 to $147.2 billion in 2002. China has been growing at a phenomenal rate and recently became the second largest economy in the world. Moreover, China holds the positions of being the second largest U.S. trading partner, third largest export market, and the biggest source of imports. With a large population and a rapidly expanding economy, China is a huge market for U.S. exporters and investors. China exports count for U.S. $287.8 billion in zinc, nickel, lumber, oil equipment and mining. The United States' trade deficit with China was $232.5 billion in 2006, up 125 percent from 2002. The U.S. gains much from the economic relationship. American consumers and companies chose to spend $400 billion in 2011 on goods made in China. The advantage of trade between China and the United States benefits both sides. Mutual trade utilizes available resources on both sides. Trade with China allows United States companies to take part in an expanding economy. The China economy offers a large and rapidly expanding market to export oriented service industries such as express delivery (the UPS case), information technology (the EDS case), and the banking (the Citigroup case). Access to the China market benefits not only these firms, but also their partners in the United States. Their presence in China connects U.S. companies to producers that operate in China, also to an emerging Chinese middle class. From the perspective of U.S. services exporters, the most significant development is the emergence of China's middle class. Those consumers are eager purchasers of U.S. exports. It's being said, China continues to be a key contributor to U.S. economic growth. In 2013, U.S. exports to China reached $120 billion, making it the third-largest export market for U.S. goods behind Canada and Mexico. "Imagine a computer company started manufacturing computers in the U.S. that were comparatively expensive because of the cost of labor. The company eventually began making them in China, thus bringing down the computers' retail cost so more people now could own a computer, and companies could put a computer on every employee's desk. This required more training for people to use this technology. Companies had to hire teachers. Computers had to be maintained-hence, companies had to hire whole departments to help employees and fix computers." These examples show how opening more doors between China and the U.S. can increase jobs and no decrease them in the long run. Right now China has a comparative advantage when it comes to savings. The U.S. is suffering from too much consumption without enough real income. The ever strengthening connection between the U.S. and Chinese economies is a good thing for both countries, as long as trade is not interrupted. With China producing cheap producing products, it gives the consumers more money to spend. The United States and China are big investors in one another. The United States is