The U.S. and China -- mutually beneficial economic partners
The U.S.-China strategic and economic dialogue in Beijing this week will have a major bearing on the sustainable and healthy development of our economic relationship.
Since the United States and China established diplomatic relations, bilateral trade volume has grown nearly 120-fold. U.S. direct investment in China has topped $63.1 billion, and China's direct investment in America has also grown rapidly, in tandem with indirect investment in Treasury bonds and other American assets. Simply put, the United States imports from China, and China increases investment in the United States. This relationship has supported low inflation and high growth in the United States for many years. At the same time, such economic cooperation has promoted China's reform and opening up; scaled up employment, growth, industrialization and urbanization; and injected vitality into the Chinese economy. Such a close economic relationship indicates that the countries complement and depend on each other.
The American and Chinese peoples benefit: "Made in China" labels -- which indicate high quality and favorable price -- increase American families' disposable income. Meanwhile, such American brands as Buick, Motorola and Wal-Mart have become part of modern life in China.
Entrepreneurs in both countries benefit: In 2008, American exports of goods and services to China were $87.3 billion, and revenue of U.S. companies in China reached $218.9 billion. In 2009, exports from foreign-invested companies accounted for 56 percent of China's export volume.
Of course, differences on some issues are unavoidable. It is essential that both countries keep in mind the mutually beneficial nature of this relationship and handle problems through dialogue and consultation on an equal footing, keeping strategic perspective. It is important to safeguard and expand common interests as well as to promote sound economic development.
China and the United States are in different stages of development and will be for a long time. Over recent decades, the American industrial structure has been upgraded toward high-end manufacturing and modern services, while its traditional manufacturing industry has gradually shifted to other countries. China and the United States should seize the opportunities brought by economic globalization. The essence of international trade is to complement each other's advantages through exchange. China's exports to the United States are mainly medium- and low-end products such as garments, footwear, toys and electronics, little or none of which is produced in America. The U.S. industrial advantage lies in high-end manufacturing products that are greatly needed in the Chinese market. If the United States can loosen its export controls on civilian high-tech products to China, its export competitiveness can be further improved. This would also help it balance trade with China.
The two countries should take a holistic view of the interdependence of their interests. Yes, a large portion of exports from American companies with direct investment in China has turned into China's trade surplus with the United States. But a significant part of China's trade surplus has become its investment in Treasury bonds and other dollar assets, shoring up the long-term stability of the U.S. economy. This economic relationship is one of mutual benefits.
Today, the common interests of our countries are expanding. Space for new cooperation is open in the bilateral and global spheres in at least three ways.
First, China and the United States must focus on global economic stability and recovery, which is threatened by the European sovereign debt crisis. China and the United States should work with the international community to maintain stability, strengthen coordination on global economic policies and consolidate the recovery's momentum.
Second, both countries are transforming their economic development patterns. China is expanding domestic demand and pursuing scientific development. The United States is altering its growth model of high debts and low savings to make its economic development more sustainable. The two should support each other's structural adjustment; expand cooperation in areas such as clean energy, energy conservation, emission reduction and environment improvement; and explore potential advantages in mutually developing infrastructure, scientific and technological innovation, urbanization and modern services.
Third, China and the United States are key stakeholders in the establishment of an equitable, open and fair international economic order. They should jointly promote open trade and investment, fight trade protectionism, continue to advance the reform of international financial institutions, strengthen global financial regulations, and safeguard the stable international monetary environment.
In the upcoming dialogue, topics will include promoting a strong recovery and more sustainable, balanced growth; promoting mutually beneficial trade and investment; financial market stability and reform; and reform of international financial architecture. We in China look forward to expanding cooperation, narrowing differences, injecting new vitality into China-U.S. economic relations and making contributions to advance our comprehensive bilateral relationship in the 21st century.
The writer is finance minister of the People's Republic of China.