China-U.S. trade offers mutual benefit: Vice Premier

Source: Xinhuanet | 05-18-2007 08:46

The China-U.S. business and trade relations are of win-win in nature and the two countries should address bilateral economic and trade problems in an active and pragmatic way, Chinese Vice Premier Wu Yi has said.

"Mutual benefit and win-win progress: These are what China-U.S. business and trade relations are all about, and these intrinsic qualities have made our trade ties strong and vibrant," the vice premier said in an opinion article published in The Wall Street Journal on Thursday.

"China's exports brings incontrovertible economic benefits to the U.S.," Wu said, citing a recent report, "China: The Balance Sheet," jointly published by two major American think tanks -- the Center for Strategic and International Studies and the Institute for International Economics.

According to the report, the rapid growth of the Chinese market boosts U.S. exports; China's exports to the U.S. and its investments in American financial assets help restrain U.S. inflation and interest rates, and thus permit faster economic growth and more job creation.

The win-win nature of this relationship is amply demonstrated by the rapid growth of bilateral trade, Wu said. According to U.S. statistics, bilateral trade has registered a 144-fold increase, or 20.2 percent annual growth, from the beginning of diplomatic relations in 1979 to 2006.

Since joining the World Trade Organization, China has become America's fourth-largest export market. Over the same period, the growth rate of U.S. exports to China was 3.7 times that of U.S. exports to other countries.

Mutually beneficial business and trade relations also mean good returns on investment made by companies of both sides, Wu added.

Between 1979, when the policy of reform and opening up was adopted in China, and the end of this March, 52,887 American investment projects were undertaken in China, with paid-in investment reaching 54.7 billion U.S. dollars.

American companies have steadily expanded market share in China through investment, with sales in China exceeding 75 billion dollars in 2004. A survey conducted by the American Chamber of Commerce in China shows that in 2005, sales of American companies in China reached 61.1 billion dollars, and 47.6 billion dollars of American products made in China were exported.

China-U.S. business and trade relations also increase the well-being of the two peoples, create many jobs and give consumers more choices in both countries, Wu said.

She cited Morgan Stanley as saying that four to eight million American jobs are closely associated with trade with China, and China's exports have saved American consumers 600 billion dollars over the past decade and nearly 100 billion dollars alone in 2004.

According to Wu, business and trade relations between China and the United States have also contributed to the growth and transition of their respective economies. Labor-intensive Chinese exports have enabled the U.S. to focus on developing capital and advanced technology-intensive products.

A report issued by the U.S.-China Business Council in early 2006 shows that the expansion of trade with and investment in China has caused U.S. manufacturing employment to drop, but helped create more in financial, redistribution and service sectors. U.S. employment data also shows that although the U.S. lost three million manufacturing jobs between 1996 and 2005, the service sector created 15 million new jobs over the same period.

While stressing that China-U.S. business and trade relations are cooperative in nature, Wu also acknowledged that problems, differences and even disputes have arisen in the course of the rapid expansion of bilateral relationship.

However, the vice premier insisted that mutual benefit and win-win progress remain the defining feature of bilateral business and trade ties. "This is the larger picture that no problem can overshadow."

China and the U.S., both being stakeholders and constructive partners, should address their differences and disputes in a coolheaded, objective and responsible way, she added, noting that "attempts to politicize trade issues should be resisted."

Noting trade deficits are caused by a number of factors associated with economic globalization such as savings and investment correlations, the international division of labor and investment relocation, Wu said the U.S. trade deficit with China in goods is a reflection of these macroeconomic factors.

It does not reflect the overall and genuine movement of interests in China-U.S. business and trade relations, she stressed.

The vice premier said that China does not seek a trade surplus and has set as a basic goal of sustaining economic growth and promoting balance in international payment and macroeconomic stability by expanding domestic demand and particularly, consumption demand.

She urged the U.S. sides to give full play to its comparative advantage as a global leader in science and technology, enhance mutual trust and relax export controls to boost the competitiveness of American companies, reverse the trend of dwindling market share of American high-tech products in China, and reduce its trade deficit with China.

Talking about the upcoming Second China-U.S. Strategic Economic Dialogue scheduled to be held in Washington next week, Wu said the forum is an important platform for growing bilateral business and trade relations and the promotion of the sound and steady growth of constructive and cooperation relations between the two countries.

The vice premier, who will head the Chinese delegation for the forum, called on both sides to increase mutual understanding and trust, overcome the interference of noneconomic factors, and resolve the problems in bilateral economic and trade ties in an active and pragmatic way.

Wu said she believed as long as the two sides continue to maintain an open dialogue and cooperation in accordance with the principle of consultation on an equal footing and for mutual benefits, China-U.S. business and trade relations will have an even brighter future and bring greater benefits to their peoples.

The First China-U.S. Strategic Economic Dialogue was held in Beijing in December. The dialogue was jointly launched by Chinese President Hu Jintao and U.S. President George W. Bush in September last year.

Editor:Du Xiaodan