Is Trading with China Good for America?

In the current society, few countries can produce everything to fulfill their domestic demand by themselves. Therefore, international trade becomes more important to numerous nations. America and China are two biggest economic giants in the world. Should they become trade partners? The U.S. Trade Representative Officers report that “U.S. goods and services trade with China totaled $410 billion in 2007” (“U.S.-China Trade Facts” 1). Do Americans and Chinese gain mutual benefits from their trades? America should take advantage of trading with China due to three factors: China’s potentially enormous consumption market, numerous Chinese investments in the U.S., and “Buy American” is bad for America.

China’s enormous consumption market is supposed to draw our attention to trade with China. The U.S. has many highly skilled technicians to help it lead the electronics supply market. China has the fastest growing market for electronic products in the world. Andrew Leonard, a commentator from Salon.com, indicates that “The United States is at the top of the food chain in both chip design and chip-making equipment, and China is potentially its largest growth market” (Leonard 1). If U.S. can keep selling chips to China, it will help China to manufacture more high-tech devices, such as computers and DVD players to maximize Chinese consumers’ satisfaction. The more chips produced, the more workers need to be hired in the U.S.

Similarly to chips, Chinese also have high demand for Internet service since their income and standard of living have been enhancing. Wayne M. Morrison, a specialist in International Trade and Finance Foreign Affairs, Defense, and Trade Division, gives statistics that “The number of Chinese internet users rose from 111 million at the end of 2005, to 137 million in 2006, to 210 million users at the end of 2007” (Morrison 9). The rapid growth rate of Internet users spurs the competition between Chinese Internet companies and foreign Internet companies. The U.S. has various famous Internet service companies—EarthLink, MSN, and so on. The population of China is approximately 1.3 billion. If the U.S. government can permit these secure companies to export internet services to Chinese consumers, Americans will make more profits and bail themselves out from the financial crisis. For instance, as a well-known internet service, email is becoming a more popular contact tool in the modern informational world. MSN, as one of the largest email companies in the United States, recently invented a 25 GB sky drive and provided a 5 GB space for its users. Compared to MSN, Wang Yi, which has more than 250 million Chinese users, only has a 1GB online drive and a 3 GB space. If the U.S. government can help MSN enter the potential Chinese email market, it will be able to catch more Chinese attention on the U.S. products through putting advertisements on the main page of users’ emails. Then, more Chinese will be willing to buy the competitive U.S. goods, and Americans will have more job opportunities.

Besides exporting electronic products to China, the U.S. government also can consider participating in the vast Chinese steel market. Associate director of Center for Trade Policy Studies Daniel T. Griswold points out that “China has displaced the United States as the world’s top importer of steel” (Griswold par. 13). He also says “While America’s total exports to the rest of the world were falling in 2002, our exports to China rose 14 percent” (Griswold par. 13). Chinese enlarged the order of steel from the U.S. because of the huge demand for national construction. For example, China’s government has been devoting itself to strengthen the basic construction in its rural areas in order to improve the standard of living for Chinese farmers. Although China has plentiful metal resources to smelt steel, metal is not renewable. If Americans extract too many metals now, it will hurt availability of resources of future Chinese generations. Unlike China, America is a developed country whose rural areas have already been well constructed; therefore, it has less demand for steel but more steel production surplus. In short, entering China’s steel market reduces the U.S. steel producers’ surplus and brings economic profits to the U.S. exporters, so they can hire more labors to extract resources to mass smelt steel and transfer them to China.

The enormous Chinese electronic product and steel markets are not the only reasons that attract the U.S. to trade with China because numerous Chinese investments in America stimulate the U.S. economy. Griswold demonstrates that China will use the profits gain from trading with U.S. to reinvest in America to maintain our domestic interest rates in a lower case and reduce our budget deficit. (Griswold par. 14). As the domestic interest rate remains low, the capital return of national bonds is low whereas their risks also become smaller. Non-risk takers would like to buy more national bonds from the U.S. government. Afterward, our government will save more funds to support health care systems, educational institutions and so forth.

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