US-China trade and investment links have benefited the two countries and the governments of both should broaden their bilateral relations, said Karan K. Bhatia, deputy U.S. trade representative Tuesday.
Bhatia said in his address entitled "US-China Trade Relations" at the Shanghai Institute of Foreign Trade (SIFT) that there was not a more important bilateral trade relationship today than the one between the United States and China.
He said the dramatic growth of US-China economic ties is the result of a historic transformation in China. Beginning in the late 1970s China's introduction of market-oriented economic reforms and its encouragement of export-led growth had greatly influenced the country's economy, he said.
Bhatia listed a group of statistics to illustrate the changes. In 1981 China was the United States' 16th largest export market but only its 27th largest supplier of imports ranking behind countries like Malaysia, Indonesia, Australia and South Africa. There was actually no U.S. direct investment in China at that time nor was there any Chinese investment in the United States.
In 2005 bilateral trade volume was more than 50 times that of 1981. "China has grown from our 16th to our 4th largest goods export market," said Bhatia. He added that US direct investment in China in 2004 reached an impressive US$15.4 billion.
Both countries had benefited from the growth in trade and investment, Bhatia said, noting that US consumers today had access to an enormous range of Chinese-made goods at competitive prices.
He said US companies have enhanced their global competitiveness through their access to China's manufacturing base and China has also fueled its economic development through access to the US market.
The growing trade relationship between the US and China marked the convergence of two great economic forces and the US should regard China as a "responsible stake holder", Bhatia said. He noted that the US and China along with Asian countries were the engines of growth in the world today.
With regards to trade frictions, Bhatia, who is in charge of US trade policy with China, said difficulties could arise even between the closest of partners. He said although there had been frictions no trade war would break out so long as the two sides settle their disputes using mechanisms established by the WTO.
He pointed out that in a mature international relationship these frictions are dealt with as individual issues while the broader relationship continues to flourish.
The deputy trade representative remained excited by the potential of US-China trade relations adding that the United States would strengthen its investment and trade in the Asian region.
Bhatia visited the Philippines, Malaysia, Singapore, Japan and other Asian countries before arriving at Shanghai. He arrived in Beijing on Wednesday.
(Xinhua News Agency March 22, 2006)