Ｓｉｎｏ－ＵＳ Ｔｒａｄｅ Ｄｅｖｅｌｏｐｓ ｉｎ Ｉｎｔｅｒｄｅｐｅｎｄｅｎｃｙ

China and the USA have decided to start up the third round of negotiationon the textile issue in the recent future. Maybe there is some activesignificance to start up this round of negotiation in such an occasion， forChina's central bank has launched a reform on the RMB exchange rate in Julyand appreciated RMB for 2%. In the meantime， Hue Jianguo， head of theDepartment of Foreign Trade， Ministry of Commerce， revealed that the tradesurplus with the USA is expected to exceed US$90 billion this year.

Wang Zihong， Head of Division of Economic Research， Institute ofAmerican Studies， Chinese Academy of Social Science， gave his answerson the question when interviewed by China's Foreign Trade.

Tightly Tied Interdependency Seenin the Bilateral Trade

\"The Sine-US trade relations will betightly tied， meaning that the bilateraleconomic and trade relations between thetwo countries will be developed on thesolid base of interdependency， no mat-ter whatever consequence will bereached in this round of negotiation.\"Wang said.

\"After all， we can predict that it is lesspossible to see any substantial changes onthe Sine-US textile issue， although RMB'srate has been appreciated for 2%， accord-ing to my individual idea， \"Wang said.

My stance can be illustrated by thefollowing points， Wang said.

The prices of Chinese textile prod-ucts is tied with the costs of production，and it is a structural issue. The sales ofChinese textile products have a long his-tory of low price because China's laborforces are always cheap. This is an ad-vantage that the US industry doesn'thave. Hence， no matter whatever a con-cession China makes in the negotiation，it'll be very difficult to reach any sub-stantial change on the Sine-US textileissue.

However， the Sine-US traderelations will still develop on the tracktoward a more and more tightly tiedinterdependency.

At first， China's economy is mn in aspeedy development which has triggereda quick increase on the demand ofimport， especially the high-tech productsfrom the USA. Hence， the USA's exportto China will inevitably be improved.

The second factor is that China's ex-port performs a main impetus role in theChinese economy. On the other hand，with the development of the USA economy，its market will be more heavily relied onthe import. Actually， the low-price andhigh-quality Chinese products arewarmly welcomed in the USA.

Thirdly， importing more low-priceChinese products will be helpful to curbthe possible inflation.

On one hand， the US domestic oilprice is not stable and is possible to causea cost-accelerated inflation; on the otherhand， the Bush government's policy ofreducing the taxes will possibly causemore investment and consumption，theoretically， it will trigger an inflation.With regard to this condition， the FederalReserve will attach great importance tocurbing the inflation. Hence， it will be in-evitable to import more Chinese low-priceproducts.

The fourth factor is that the devel-opment of the USA's economy will es-calate an improved demand of import-ing more Chinese products， in themeantime， its export to China will causean important impact to the nationaleconomy of the USA although its exportto China just takes a low proportion inthe total. Its export to China will be help-ful in creating more investment andemployment. Thus， the two countries'economy are run in gear， and the inter-dependence of the both countries'economy will be improved inevitably.

China and the USA are mutuallyimportant trade partners for each other

According to China's statistics， theUSA is the No.1 export market of China.In 2004， China realized a total export ofUS$124.95 billion to the USA， taking21.1% of China's total export. The USAis also the No. 6 import market of China，taking 8% of the total import volume ofUS$44.68 billion. In China's list of thetop ten trade partners， the USA is rankedNo.2 with USS 169.63 billion realized in2004， next to the EU. Wang said.

In the meantime， According to therelevant prediction China is possible tosurpass Canada and become the No.1trade partner of the USA in 2005. Ac-cording to the statistics of the USA， in2004， the USA realized a total import ofUSS 196.7 billion， taking 13.4% of its to-tal import， just next to Canada's t7.4%.

Although China is the largest deficit-maker of the USA， we should take it as ausual phenomenon. The import of theUSA is less than 15% of its GDP， amongstwhich the import from China is more less.Hence， the deficit will not cause a greatimpact to the USA's economy.

However， China can take some effec-tive and pragmatic measures to improvethe export price of Chinese products， forinstance， to improve the content oftechnology， and to strengthen the environ-ment-keeping in the process of production，and to improve the labor conditions. Bydoing so， a higher price will be realized inthe export， and a greater profits will beearned as well. Wang said.