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Different economic structures cause Sino-US trade imbalance

By Luo Lan (People's Daily Overseas Edition)

15:55, March 02, 2012

Edited and translated by People's Daily Online

The United States has long been blaming China for its trade deficit. It has imputed the massive unemployment in its manufacturing sector and many other problems to its trade deficit with China, and put pressure China in various fields such as the RMB exchange rate, anti-dumping, and intellectual property rights.

However, experts noted that a main cause of China-U.S. trade imbalance is the different economic patterns of both countries. China only has nominal surplus, while the United States enjoys profits.

Asymmetrical trade pattern leads to trade imbalance

China’s comparative advantage lies in labor-intensive industries, while America’s comparative advantage lies in high-tech industries. China has fully utilized its comparative advantage to export large amounts of cheap but good products to the United States, fulfilling the demand of U.S. consumers. However, the United States has imposed tight restrictions on high-tech exports to China. This asymmetrical trading pattern has inevitably led to trade imbalance between the two countries.

During a recent visit to the United States, Chinese Vice President Xi Jinping called for the United Stated to change its economic policies, including easing restrictions on high-tech exports to China, so as to solve the trade imbalance.

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  1. Name

John at 2012-03-03113.231.246.*
China has already deplete its natural resources, pollute its environment. The air is polluted far worse than any other country,rivers are full of raw sewage and every industrial chemical made. You are pumping far more water out of the ground than can be replenished. China cannot print enough money to fix this
robert at 2012-03-0372.234.186.*
the article claims they send the US good quality products that are cheap!? You got to be kidding. the vast majority of their goods are abysmal in quality! i regularly have to return defective chinese made products to retailers. its maddening. I wished they would stop importing all that junk from over there. if there stuff isn"t downright toxic and dangerous, it will break down prematurely!
robert at 2012-03-0372.234.186.*
the article claims they send the US good quality products that are cheap!? You got to be kidding. the vast majority of their goods are abysmal in quality! i regularly have to return defective chinese made products to retailers. its maddening. I wished they would stop importing all that junk from over there. if there stuff isn"t downright toxic and dangerous, it will break down prematurely!
Reality at 2012-03-0350.137.34.*
The correct course for U.S. is not to cut consumption. That is ludicrous. That will only lead to slower economic output. The correct way to address this issue is for U.S. to increase its exports to China. However, this should not include sensitive high-tech technology. Exporting high-tech goods will result in China stealing U.S.'s advantage.
尉天君 at 2012-03-03222.18.168.*
put pressure on China ,right?
  

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