As the United States seeks to expand its economy, it remains necessary that it reaches beyond its borders to buy and sell goods and services to the 95% of the global population residing outside the US. China has the second-largest economy in the world after the US, as measured by nominal GDP. Interestingly, the United States and China contribute to a third of the world’s economy. An economic pact, therefore, between these two nations is essential and its consequences not only affect them but also the majority of the world. Both the US and China have been economic partners for decades. Despite recently being marred by trade conflicts, this relationship is beneficial to both countries, more so the US as indicated by its booming economy.
Most evidently, the China-US trade deal has led to vast economic growth in the two countries. Since China’s admission to the World Trade Organization (WTO) in 2001, the United States economy rose from $125 billion to more than $700 billion in 2017 ( Meltzer & Shenai, 2019) . In 2015 for instance, the US exported goods and services worth $165 to China alone. This made up 7.3 % of its exports and close to 1% of its total economic output. This trade has, therefore, contributed to the growth of the economy in the United States.
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China is among the leading nations in innovation and technology. The United States partnership with the US has enabled it to get first-hand access to its products hence enhancing the country’s technological and scientific prowess. In the year 2018, the US imported aircraft, machinery, vehicles, optical and medical instruments, and electric machinery totaling close to $65 billion. In the race for developing and commissioning 5G technology, China seems to be on the forefront. Huawei, a Chinese tech company has been open to selling its services to firms in the US (Cao, 2019) .
Trade relationships with China undoubtedly led to the creation of job opportunities in the United States. Recent data, for instance, estimate that close to 1.8 million jobs have been created due to this deal. These jobs are in agricultural sectors, science, and technology, capital goods, and services (2019) . The US exports goods including vehicles, trucks, and semiconductors to China. These industries create employment for US nationals.
An amicable economic relationship with China has boosted the growth of local firms in the US. A pact with China has ensured products from these firms get a ready market in China while also ascertaining that they get raw materials from China. The trade deal has helped US multinational companies such as Boeing and Cargill expand their markets to China. In 2015, China purchased soybeans worth $2.9 Billion from US firms, making soybeans the top export crop to China ( Songfeng, Zhang & Yuan, 2015) ..
China emerging as an economic superpower has led to drastic improvement mostly in the quality of goods and services. A trade deal with China, created a sense of competition, putting most manufacturing companies on toes hence ensuring they better their services. In the end, the beneficiaries of this deal are the local consumer, a mere citizen of the United States, and generally its economy ( VanGrasstek, 2006).
Despite recent trends of sanctions, imposed sanctions, and general trade wars, the trade pact with China has been beneficial in the United States. This partnership has ensured the economy has grown and more job opportunities created. Local citizens, as well as firms, have also gained from the pact. The imbalance, bringing in deficits between the two countries should be cautiously dealt with to avoid stressing this partnership.
References
(2019). Retrieved 14 October 2019, from https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-chin
Cao, S. (2019). End of Tech War? China’s Huawei CEO Offers to Sell 5G Expertise to US Firm. Retrieved 14 October 2019, from https://observer.com/2019/09/huawei-founder-ren-zhengfei-sell-5g-end-us-china-trade-war/
Meltzer, J. P., & Shenai, N. (2019). The US-China Economic Relationship: A Comprehensive Approach. Available at SSRN 3357900 .
Songfeng, C., Zhang, Y., & Yuan, J. (2015). The Effects of China-US Free Trade Agreement (CHUSFTA).
VanGrasstek, C. (2006). The Benefits of US-China Trade in Services. United States Council Foundation.
