America And China Essay

1138 words - 5 pages

National economics are often adversarial in nature, a global contest where countries seek to gain advantage over their neighbors, all in the name of wealth and gain. America is no stranger to the game; the U.S. has been the world’s economic leader for the better part of a century. China, however, is the leading contender for the economic top-spot (), and America continues playing directly into China’s hand. America’s current trading posture with China is drastically skewed in China’s favor; if America is going to preserve its position as the leading economic power, existing U.S.-Chinese trading agreements will need to be revised, and additional regulations must be introduced to promote ...view middle of the document...

International trade is generally an economic boon, and mutually beneficial for those involved. Supporters of China’s entry into the World Trade Organization originally predicted several benefits for the U.S., including increased exports, creation of jobs, and reduction of America’s trade deficit (Scott). In reality, however, trade with China has economically compromised America. Unfair trading has caused U.S. exports to China to diminish, cost the U.S. millions of jobs, and caused the U.S.’s trade deficit to grow to record levels (Scott). Even balanced deals quickly bias to China’s favor through China’s market manipulation strategies. Free-trade, it seems, is neither fair nor impartial when one of the parties is not actually free, as in China’s case. Assuming China will not simply adopt a free-market to level the playing field while it is tilted in their favor, controlled trade should be introduced between the two countries in order to provide a balanced venue and mitigate the impact of state-controlled influence on the free market.
At the heart of these issues is one disturbing fact: China does not play by the rules. China’s market is largely a state controlled participant in the otherwise free markets (Dorn 78). The situation has not gone completely unnoticed, in 2012 President Obama announced the creation of a Trade Enforcement Unit, specifically citing unfair trading practices in China (“Obama Announces”). Despite America’s first-steps toward economic defense, the speed at which American wealth migrates to China continues to increase (U.S. Census Bureau).
Ostensibly U.S.-beneficial trades can be shifted to China’s favor by the deliberate manipulation of the value of the dollar to yen. As of 2010 China owned about $1.2 trillion dollars of American debt in the form of treasury securities (Sheng and Yan 52). With such a large amount of American debt, China is able to exercise influence dollar’s value (Scott). With outright control over their own currency and significant influence over the value of the dollar, China manipulates exchange-rates as an economic and political tool, ultimately ensuring China’s gain – and America’s loss (Scott).
Another product of globalization: much of America’s manufacturing base has shifted to China, taking advantage of China’s much lower cost of labor (Scott). This brand of outsourcing can be a tempting proposition for profit-driven companies seeking to optimize net gains by minimizing expenses. With current trade...

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