There is probably no more complex or broadly contentious issue in the U.S.-China economic relationship than that of trade. The main tensions in the U.S.-China trade relationship revolve around American critics blaming China’s huge trade imbalance with the United States for the loss of American manufacturing jobs, an imbalance made possible, critics say, by a host of “unfair trade practices” such as currency manipulation, protectionism, and intellectual property rights infringement.
China, which sees itself as a developing socialist economy that needs time and leeway to progress, accuses the Americans of hypocrisy of trying to contain China’s growth while benefiting from it, and of scape-goating China for America’s domestic economic problems and for Americans’ insatiable appetite for cheap goods. Reality, of course, is much more complex, but such complexities and nuances are often beyond the interests of a sound-bite driven media or an American public trying to cope with the very real dislocations and fears caused by job losses.
As the U.S. and China have become the world’s largest and 3rd largest trading economies (of individual countries), and each other’s second largest trading partners, it is imperative that we understand the details of how thoroughly interdependent the two countries have become. The stakes are too high to do otherwise.