Custom «International Trade between USA and China» Essay Paper Sample

For the last three decades the economical tie ups between the USA and China have grown in a healthy scale. Statistically speaking, according to Export.gov (2011), the trade relations between the two countries have raised from $ 2 billion in 1979 to $ 479 billion in 2010. Presently, China is the second largest trading partner of the United States of America and the third largest export market. China is the second largest importer of products from the United States of America.

According to Kastner (2007) the incomplete transition of China to a free market economy and the use of the economic policies, sometimes causing distortion, have directly contributed to the growth of trade friction with USA. There are different opinions to as to the most effective way of dealing with China on different major economical issues. As per the Trade Stats Express and USA Trade Online, there are reports and details of United States businesses with different countries (Export.gov, 2011). It is believed by Abraham and Hove (2005) that USA backed trade policies are directed to encourage Chinese investors to invest in United States rather than blocking the United States based companies for various socio-political reasons.

Eichengreen (2007) noted that there are a number of criticisms that are based on the current FDI policies of China as they mainly focus on mergers and acquisitions which mainly boost the potentials of the Chinese Firms working with USA based companies. It is directly linked to the Chinese Government for the overall development of the country. According to Bergstrand and Egger (2006) the rapid economic growth of China have made it a new economic power and USA has to convince China on the fact that China is a strong factor in the international trading system and the further economical developments will only increase the possibilities of China in the World market. Still there are a number of opinions about the most effective way of China to deal in the economical sector but with the involvement of both USA and China, it is expected that these two countries will be benefited together.