China and US relationship

U. S and China trade relation has evolved energetically over last three decades. The relation got a new size with signing of bilateral trade agreement in July 1979 to make sure mutual most-favored (MFN) treatment from 1980. The two-way trade between two countries, which grossed an amount less than US $1billion in 1978, has reached $387billion in 2007. China is now the biggest source of U.S. imports and 2nd biggest U S trading associate. China is also third largest export market for US $50billion of paid up capital has been invested till date in more than 40 thousand programmes in China.

U. S. Exports to China

The U.S. exports to China principally consist of airplanes and its spare pieces, electronic element and semiconductors, grains and oilseeds (principally soybean), waste and scrap, resins, synthetic rubbers and fibers. China is also a large market for U.S. exporters of agricultural products. Agricultural exports in 2007 were US $ 8.3billion, which has increased by 24 percent over last year. U.S. exports to China accounted for 5.6 percent of absolute U.S. exports in 2007, which come to US $ 65.2 billion, preserving a yearly increase of 18 percent. China is now third largest market for U.S. exports. During the first half of 2008, U.S. exports had grown by 24 percent in comparison to the identical period last year. During 2001-2007 U.S. exports to China had grown by a whooping 240 percent. China has been increasing with an average of 9% in terms of GDP. Economic growth has increased the buying power of people. American Exporters are increasingly feeling convenient in doing business with China. China has the biggest mobile phone network with an

Estimated user base of 600 million as on July 2007, and it is hourly increasing. Besides a widely covered network acts as necessary impetus to the communication infrastructure. Boeing Corporation hopes China to be the hugest market for trading air travel outside U.S. In the nearest two decades, by 2025, China is supposed to purchase 3400 aircrafts valued at $ 340 billion. China is now the second biggest market for new cars. Chinese government hopes the new car sales to rise by 20.7 million units per annum by 2020. This gives excellent possibility for U.S. exporters engaged in automobile exports. On the other hand there is an increasing business relation among U.S. exporters that China is forming its policy in such a manner as to impose limitation on the imports of finished products, which in turn will constrain the American manufactures to invest in manufacturing facilities in China. This is obvious from the fact that most of the Chinese imports from U.S. are raw materials utilized to create finished goods for exports.

U.S. Imports from China

China has been the hugest source of U.S. imports in 2007, with a yearly increase of 11.7 percent; the import bill rose to $ 321.5 billion, accounting for 16.5% of total U.S. imports (in comparing to 6.5% in 1996). The main U. S. imports from China contain computer and its parts, communication equipments, mixed manufacturing articles (toys, games etc), apparel and audio video equipments. During the last two decades, items exported by China exporters were chiefly labor-intensive low valued products, such as toys and games, footwear and consumer electronic products. Nowadays more technologically advanced products such as computers have now overtaken it. During the period 2003 ”“ 2007 import bills of computer equipments have increased to $ 45.5 billion from $ 18.7 billion, succeeded by $ 34.8 billion in mixed manufacturing articles from $ 21.8 billion. At the same period import of communication equipments and apparels have grown to $ 23 billion each, from about $ 9 billion.

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