extent of contemporary relations between the United States of America and the People’s Republic of China determined by economic interests

extent of contemporary relations between the United States of America and the People’s Republic of China determined by economic interests

Introduction

On January 1^st, 1979, China and the United States formally established diplomatic relations, ending 30 years of abnormal conditions. (Edward, 2009) This is a landmark event in the history of bilateral relations, thus opening a new chapter in bilateral relations. Meanwhile, it has exerted a significant and far-reaching influence on the international situation and world pattern. In the contemporary world, the fundamental relationship between countries is one of interest. “A country does not have permanent friends, only permanent interests.” (Cuiping, 2017) This sentence was used to describe the relationship between countries, which now has become a fundamental principle of state-to-state relations. This essay will discuss the extent of contemporary relations between the United States of America and the People’s Republic of China determined by economic interests.

Overview of the impact of China-US relations

China is the largest developing country in the world with abundant labor resources, cost advantages, a broad market, and unlimited development potential. Even though China has always been a country with the highest population in the world, with an approximate of 1.4 billion people, it has low costs of manufacturing. In 2019, China’s annual import and export volume reached a new high of 31.54 trillion yuan. (China.org.cn, 2020) The United States is the world’s largest developed country and the world’s only superpower, with the most substantial economic and technological strength in the world. The USA in 2019 reached 24.8% of world GDP, almost a quarter of the world’s economy. Meanwhile, the United States has such a strong spirit of technological innovation that virtually all the essential technology products in the world are inseparable from the United States. (reference) The US has sought to lead the world economy toward open markets, relatively free trade and investment, trade agreements that expand those norms, and flexible exchange rates. (Bergsten,2018) Therefore, the relationship between China and the United States has had a direct impact on the development of the world economy (Zhao & Liu, 2009).

The relationship between China and the United States

Driven by economic globalization, China-US economic and trade relations have further been developed in the 21st century. The growth rate and amount of the bilateral economic and trade ties have far exceeded the scope of bilateral economic and trade relations and have an increasingly global impact. (reference) In recent years, the relationship between China and the United States is complicated, and there are frequent frictions between the two countries. This is caused by the differences and competition in politics, economy, military, and culture between China and the United States. During the eight years of the Obama administration, China-US relations have generally maintained steady development. The two countries have maintained close dialogue, expanded cooperation, and Shared interests to an unprecedented degree. However, the mutual trust between China and the United States has been severely damaged by his “Asia-Pacific rebalancing” strategy and his actions that undermine China’s interests on issues such as economy and trade, arms sales to Taiwan, Tibet and human rights. (reference) The Asia-pacific rebalancing strategy is to use the doubts of individual countries around China about China’s development to reinforce the strategic position of the United States. The “Asia-pacific rebalancing strategy” is seen as a further step towards us pivot to the region.

In recent years, relations between China and the United States have reached a freezing point, and the main reason is the trade war between China and the United States. Since China joined the WTO in 2001, the total volume of imports and exports has been increasing year by year, so China’s export-oriented economy, which is one of the growth poles, has been developing rapidly. (reference) This is due to the trade agreements among relevant WTO members, which further enhance the competitive advantage of China’s export products in the international market. The United States has run a trade deficit in recent years, and China has been one of its largest trading partners in the past years. To conform to the domestic popular tide, Trump initiated the trade war first. On March 22, 2018, US President Donald Trump signed a memorandum of understanding on trade with China at the White House. Trump announced on the spot that he would likely impose tariffs on 60 billion dollars of goods imported from China and restrict Chinese companies from investing and purchasing in the United States, sparking a trade war between China and the United States. Trade disputes mainly occur in two aspects: one is China’s comparative advantage in the export sector; The other is the area of imports and technical knowledge where China has no power. (reference) Trump’s start of the trade war will indeed have a tremendous negative impact on the relations between China and the US. The same interests are at the heart of the relationship between the two countries. It is intolerable for the attention of the country to be damaged. In a trade war between China and the United States, neither side will benefit, and both economies will lag. In the new international situation, China and the United States share common interests on many major global and regional issues and enjoy a broad basis for cooperation. However, the United States believes that China’s rise is a challenge to its hegemony because, with China’s reform and opening-up, China’s economy and various aspects of the rapid development, the United States felt the pressure from China, so the United States gave up the common interests of the two countries, economic sanctions against China.

Politics as a determinant of China-US relations

In addition to economic interests, some people also believe that political factors determine the relationship between China and the United States. There is an obvious example that China and the United States began a confrontation in the south China sea in 2016. The Xisha Islands are China’s inherent territory, and the uNITED sTATES once again sent a warship to enter China’s territorial waters of the Xisha Islands without authorization, which violates Chinese law and relevant international law, seriously infringing upon China’s sovereignty and undermining peace, security and good order in suitable waters. (reference) China expresses its strong dissatisfaction and firm opposition to the proper U.S actions and strongly urges the U.S to immediately stop such provocative operations that violate China’s sovereignty and threaten China’s security. Since Trump took office one year ago, the South China Sea issue has become a bargaining chip in his China policy. The Trump administration continues to get involved in the south China sea issue with a steady hand. The southern China sea region has become the starting point for the U.S to increase its military deployment. The south China sea issue has become the most critical issue in China-US relations.

The South China sea is not only part of China’s territory, but it is also a source of its economy. China’s primary strategic direction is to take economic construction as the center and gradually build a healthy China. The south China sea is one of the diplomatic channels for China’s economic development. China declares that it will never make any concessions on the South China Sea issue and will not give the U.S the slightest opportunity to infringe on China’s interests. (reference) Because of the South China Sea issue and the trade war between China and the United States, the economic development in both countries has been hit to varying degrees. The trade war between China and the United States is not over yet, but the relationship between China and the United States has changed dramatically. The position of major trading partners has changed, China has reduced its imports and exports to the United States, and ASEAN has surpassed the United States to become China’s second-largest trading partner.

Conclusion

To conclude, it seems clear that the contemporary relationship between China and the United States is still primarily determined by economic interests in today’s complex world. China and the United States should strengthen cooperation and complement each other’s strengths, which is the most conducive to human development.

Reference

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Xinbo, W., 2019. US Competitive Policy toward China and the Transformation of China-US Relations. China Int’l Stud., 77, p.14.

García, J.G., Cota, J.E.M. and Juanjuan, Z., 2018. The impact of China on Mexico-USA relations: Economic evolution and strategic possibilities. Revista Análisis Económico, 30(75), pp.29-43.

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