The trade relations between China and the U.S - Essay Example

College U.S. - China Trade Relations Trade between China and the U.S has changed over time since China underwent strategic changes in the political-economic sphere in 1979. U.S. –China economic ties in the last three decades have shown signs of growth with the countries boosting ties despite significant differences that would be discussed later. For instance, In 1979 U.S. - China trade was $2 billion, which has since grown tremendously to $562 billion in 2013. Currently, China is the second largest trade partner, third-largest market for exports and the largest single source of imports for U.S. (Morrison 4).

Currently, China’s market for U.S products is estimated to be worth $300 billion judging from the exports from U.S to China and the total sales of U.S firms based in China (Morrison 8). As such, U.S-China trade ties have defied all the odds to remain strong with prospects of increase in trade despite the differences between the two trading partners. One aspect that makes trade between China and U.S interesting phenomena is the growing trade ties despite the complex relationships marked by major tensions.

One of the major challenges that results in these tensions, in the trade is the difference in the market economies of the two countries, which though significant has been overlooked in the developing trade ties between the two countries. While U.S is a capitalist country that favors free economy policies, China has adamantly resisted the move to shift to a free economy market despite the growing pressure from the global markets (Morrison 26). As such, the country still imposes policies that lead to distortion of trade and investments.

Some of the areas that have resulted in trade tensions include China’s poor policies in the management of intellectual property rights (Morrison 28). Others as Morrison explains are an increasing tendency where some Chinese firms are involved in cyber espionage against many U.S firms, a move that had threatened relations between the two countries. As such, the growing trade between the two countries has defied such tensions, which may suggest the two counties hold resources of strategic impotence in international trade, which overshadows the existing tensions.

Government intervention in the Chinese market is another concept that affects the trade ties between the two countries, and impacts negatively on U.S. Some of the political factors include the reluctance of China to meet its obligations as set out by the World Trade Organization, use of market policies that force foreign firms to transfer technology and other skills to the local firms in exchange of market access (Morrison 36). The major reason behind these Chinese policies is to ensure the government controls the types of businesses that have to develop at the expense of others and to protect these industries from foreign competition.

While these policies may negatively affect U.S and may have contributed to job losses, China shows no signs of abandoning such government controlled market policies to the detriment of U.S firms. A study by the Chinese IPR observed that the U.S suffered a loss of approximately $240 billion annually over several years due to these Chinese policies. Therefore, the trade relationship between the two countries is biased towards China due to government protectionism and market intervention in the market.

However, these policies have been overshadowed by increasing trade as the statistics above shows, which makes the trade between the two countries an interesting phenomenon in understanding global markets. Therefore, U.S –China trade ties show signs of progress with this growth prospected to increase in the future. However, the increasing growth in trade occurs under biased trade policies that favor Chinese firms at the expense of the American firms. Considering the U.S. has a free trade market, which China has embraced sparingly, shows glaring differences in trade and economic policies between the two countries.

However, trade has defied these differences by registering continued growth, which makes understanding of the trade ties between the two countries an interesting phenomenon to study in the global markets analysis.Work CitedMorrison, M. Wayne. China- U.S. Trade Issues. Congressional Research Paper 7-5700. February 10, 2014. https://www.fas.org/sgp/crs/row/RL33536.pdf. March 26, 2014.