Chinese School - Sino-US trade benefits all

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BIZCHINA / Review & Analysis

Sino-US trade benefits all

(China Daily)
Updated: 2007-09-06 09:14

Sino-US trade will benefit both countries as well as the world, says an
article in the overseas edition of People's Daily. The following is an
excerpt:

Last year, the Sino-US trade volume was US$262.68 billion and China's
trade surplus was US$144.26 billion.

Commenting on the trade imbalance, Minister of Commerce Bo Xilai said:
"China has the trade surplus while the United States has the profits."
This is because of the characteristics of the Sino-US trade.

First, the trade relations between China and the United States are
complementary rather than competitive. The customs statistics show that
China had a trade surplus of US$229.18 billion from 1996 to 2003.
According to statistics provided by Morgan Stanley, Chinese products had
saved more than US$600 billion for US consumers in the eight-year period,
cut costs for US manufacturers and helped control inflation.

Second, China's foreign trade is mainly in the processing sector. The
sector accounted for 63.3 percent of the total products exported to the
US in 2006. According to an article in Washington Post by Susan L. Shirk,
nearly two-thirds of Chinese exports are produced by foreign companies,
mainly Japan and the United States. For every Barbie doll priced at
US$20, only 35 cents stays in China.

Third, there is much more US investment in China than the other way
round. Up to the end of last year, US direct investment in China exceeded
US$54 billion while Chinese investment in the US was only US$957 million.
The more than 50,000 US companies in China have gained much profit.

Statistics show that of the total sales of US companies in China in 2003,
71 percent was to the Chinese market, 11 percent to the US and 15 percent
to other countries and regions. Last year, US companies in China had
total sales of US$80 billion in China's domestic market with the profit
of about $10 billion.

According to a survey by the American Chamber of Commerce in China, 73
percent of US companies in China think they are making profits here and
37 percent think their profit rates in China are higher than their global
profit rates. Thus 51 percent of these companies list China as their No 1
investment destination in the next five years.

(For more biz stories, please visit Industry Updates)

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