| With economic globalization, economic relation among nations is becoming closer. Each nation gives greater attention to economic benefits and to economic security. The USA and China, the most powerful countries in the world, both aspire to a new standard of communication and mutual recognition. With the development of more inter-governmental communication and openness, both countries have a strong desire to develop their economies on the basis of bilateral international trade relations. Since the USA and China established diplomatic relations in 1979, although the political relationship is not stable, the amount of bilateral trade is increasing gradually.The international trade policy of the USA is an important part of its economic strategy. Since President Bush assumed the reins of government, he has carried on the National Export Strategy, placed international trade at a more important level and adjusted trade policy accordingly. He has pursued a "fair" and "free" policy. His adjustments affect trade relationship with China, lead to some new problems and make the original problems in bilateral trade relation more pronounced, all at the same time. This article describes realistic research on how these adjustments have affected the trade relationship between the two countries and on what that trade relationship should be. The author presented this paper in five parts, as follows:The first paragraph: Some economists, Richard L. Brinkman, as their representative, animadverted on the Comparative Advantage Trade Theory put forward by David Ricardo and then retrospected to the Absolute Advantage Trade Theory put forward by Adam Smith. Detailed analysis lead to the conclusion that trade policy guided by the Static Comparative Advantage Trade Theory will lead to unilateral and non-reciprocal free trade which will bring about trade imbalances. Absolute Advantage - Dynamic Comparative Advantage is a decisive factor in economic development, but not in economic growth, in trade modes or in trade merchandise. Therefore, a country's foreign trade policy should be based on the Dynamic Comparative Advantage Theory. The making of the "new" foreign trade policy of the USA may be regarded as an example.The second paragraph: In this section there is a detailed analysis of the foreign trade policy of the USA. The Bush government has pursued a more " fair" and "free" policy, or so-called Zero to Zero policy. Under that policy each country, including the USA, has no tariff walls. This policy views the world as a Utopia. The author put forward six factors which have greatly influenced bilateral trade relations: (1) politics sometimes do not affect the economy; (2) the trend toward unilateralism to trade legislation;(3) strengthening the trade protectionism; (4) the negotiation of trade issues through the WTO system; (5) the infliction of pressure on China in the trade area; (6) continuation of the National Export Strategy.The third paragraph: Detailed analysis on how the adjustments affect the bilateral trade relationship between the USA and China. Different trade policies will lead to different characteristics in bilateral trade relationships. China, now being a member of the WTO and facing trade policy adjustments by the Bush government, finds some new problems and finds that some of the original problems become more and more significant in the bilateral trade relationship. Some examples are issues such as the American trade deficit, dumping and anti-dumping, protection of the agricultural and iron industries, copyright, restrictions of high technology exports.The fourth paragraph: Expectations for the bilateral trade relationship. The author puts forward that it is appropriate for the American strategy to further its bilateral trade relationship with China. There is a great potential to develop this relationship and to increase the assurance of mutual cooperation. Simultaneously, there is no smooth way to develop the relationship. Potential competition will be a most important characteristic in the developme...
|
PDF Full Text Request